Judge: Douglas W. Stern, Case: 22STCV33413, Date: 2023-04-05 Tentative Ruling
Case Number: 22STCV33413 Hearing Date: April 5, 2023 Dept: 68
May Ali, PA-C vs. Zein Obagi, M.D., et al., 22STCV33413
Demurrer to First Amended Complaint
MOVING PARTIES: Defendants Zein Obagi, M.D.; Makayla Hendrickson; Noelle Denlinger; and Erica Connor
I. BACKGROUND
A. Basic Background
Plaintiff’s First Amended Complaint (FAC) alleges several employment-related causes of action against Defendants for Wrongful Termination, Retaliation, Unfair Business Practices, Negligent Hiring and Supervision, Violation of the Labor Code, among other causes of action.
Plaintiff worked for ZO Skin Health as a Physician Assistant-Certified. Defendant Dr. Obagi owned the clinic, and Defendants Connor, Hendrickson, and Denlinger worked for the clinic. Plaintiff alleges in her FAC that all of the Defendants were engaged in unlawful business practices, and that they failed to provide her with meal and rest periods and accurate wage statements, among other things. She also claims that Defendants’ actions subjected her to emotional distress. Further, Plaintiff alleges that as a result of her complaints, Defendants retaliated against her and wrongfully terminated her. Plaintiff has also brought a battery claim against Defendant Connor, due to Defendant Connor giving Plaintiff a gummy containing THC when Plaintiff complained of a headache.
B. Procedural
This action was originally filed by Plaintiff on October 12, 2022. Demurrers were filed and Plaintiff elected to file a First Amended Complaint. Plaintiff filed a FAC on January 19, 2023. Defendants filed their Demurrers to Plaintiff’s FAC on February 22, 2023. No opposition has been filed.
It is generally a very poor practice to not respond to a demurrer. It suggests that Plaintiff agrees that the demurrer is well taken. It that inference is unjustified, then it deprives the Court of the benefit of the analysis of the Plaintiff.
ALTHOUGH THE TENATIVE RULING IS TO ALLOW PLAINTIFF LEAVE TO AMEND MANY OF THE CLAIMS, PLAINTIFF SHALL EXPLAIN WHY THAT IS AN APPROPRIATE OUTCOME, AS THE ALLEGATIONS APPEAR TO BE INCAPABLE OF BEING CURED.
II. ANALYSIS
A. The Demurrer
As a general matter, in a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer tests the pleading alone, and not the evidence or facts alleged.” (E-Fab, Inc. v. Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) As such, the court assumes the truth of the complaint’s properly pleaded or implied factual allegations. (Id.) The only issue a demurrer is concerned with is whether the complaint, as it stands, states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.)
Where a demurrer is sustained, leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) The burden is on the plaintiff to show the court that a pleading can be amended successfully. (Id.; Lewis v. YouTube, LLC (2015) 244 Cal.App.4th 118, 226.) However, “[i]f there is any reasonable possibility that the plaintiff can state a good cause of action, it is error to sustain a demurrer without leave to amend.” (Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240, 245).
1. Third Cause of Action for Unfair Business Practices
All four Defendants demur to Plaintiff’s FAC on the basis that it fails to state facts sufficient to maintain a cause of action for Unfair Business Practices in Violation of Cal. Business and Profession Code §§ 17200 et seq.
Defendants demur to this cause of action on the grounds that there is no vicarious liability under the UCL for individuals based on the purported unfair business practices of an entity. (See Emery v. Visa Int’l Serv. Ass’n (2002) 95 Cal.App.4th 952, 960 (“‘The concept of vicarious liability has no application to actions brought under [the UCL].’…A defendant’s liability must be based on his personal ‘participation in the unlawful practices’ and ‘unbridled control’ over the practices that are found to violate [the UCL] …” (quoting People v. Toomey(1984) 157 Cal.App.3d 1, 15)).)
While Plaintiff’s FAC alleges that Defendants “failed to lawfully store and sell prescription medicine” and “failed to implement procedures to lawfully store and sell prescription” (FAC § 169), Plaintiff does not allege that the individual Defendants had unbridled control over these processes. Instead, Plaintiff’s FAC lumps the individual Defendants in with their employer, Defendant ZO. Because Plaintiff has not alleged that the individual Defendants had unbridled control over these processes, Plaintiff cannot maintain a cause of action for Unfair Business Practices against these Defendants.
Defendants’ Demurrer to Plaintiff’s Third Cause of Action is SUSTAINED with leave to amend.
2. Fifth Cause of Action for Negligent Hiring and Supervision
Defendant Dr. Obagi demurs to this cause of action on the basis that Plaintiff has failed to plead facts sufficient to maintain a cause of action for negligent hiring and supervision.
“California case law recognizes the theory that an employer can be held liable to a third person for negligently hiring, supervising, or retaining an unfit employee.” (Doe v. Capital Cities (1996) 50 Cal.App.4th 1038, 1054.)
While Defendant Dr. Obagi was the founder of Defendant ZO, according to Plaintiff’s FAC, he, in his individual capacity, was not Plaintiff’s employer. Defendant ZO was Plaintiff’s employer. (See FAC ¶¶ 28, 30, 131, 150.) Because Plaintiff has not alleged that Dr. Obagi was her employer, she cannot maintain a cause of action for negligent hiring and supervision against Dr. Obagi.
Defendant Dr. Obagi’s demurrer to Plaintiff’s Fifth Cause of Action is SUSTAINED with leave to amend.
3. Sixth Cause of Action for Violation of Labor Code
All four Defendants demur to Plaintiff’s FAC on the basis that Plaintiff fails to state facts sufficient to maintain a cause of action for Violations of Labor Code §§ 200 et seq. and § 1194.
Section 558.1 provides that “(a) [a]ny employer or other person acting on behalf of an employer, who violates, or causes to be violated, any provision regulating minimum wages or hours and days of work in any order of the Industrial Welfare Commission, or violates, or causes to be violated, [Labor Code sections] 203, 226, 226.7, 1193.6, 1194, or 2802, may be held liable as the employer for such violation. [¶] (b) For purposes of this section, the term ‘other person acting on behalf of an employer’ is limited to a natural person who is an owner, director, officer, or managing agent of the employer, and the term ‘managing agent’ has the same meaning as in subdivision (b) of Section 3294 of the Civil Code.”
However, for an individual to “cause” for the Labor Code claims at issue here, that person “must have engaged in some affirmative action beyond his or her status as an owner, officer or director of the corporation, . . . [and] had some oversight of the company’s operations or some influence on corporate policy that resulted in Labor Code violations.” (Espinoza v. Hepta Run, Inc. (2022) 74 Cal.App.5th 44, 59; see also Usher v. White(2022) 64 Cal.App.5th 883, 896-97 (holding that member of company was not personally liable for wage and hour violations because he did not have any responsibility for payroll, did not participate in employee classification decisions, and was not “personally involved” in the alleged violations).)
To qualify as a managing agent, a person must have “substantial discretionary authority over vital aspects” of the business. (White v. Ultramar, Inc. (1999) 1 Cal.4th 563, 577.)
Plaintiff has not alleged any facts showing that Defendants Connor, Denlinger, and Hendrickson had any direct oversight or influence on corporate policy that resulted in the violations that Plaintiff is alleging. Nor has Plaintiff alleged facts sufficient to show that these three were managing agents.
As for Dr. Obagi, in her FAC Plaintiff states that he “was less in charge, and more like a trophy, with less control over what was transpiring clinically in the offices.” (FAC ¶ 40.) While he was owner of the business, Plaintiff has not alleged facts showing that he had much oversight over the company’s operations or that he was responsible for the policies that resulted in the violations. She has also not alleged facts showing that he was a managing agent.
Defendants’ Demurrer to Plaintiff’s Sixth Cause of Action is SUSTAINED with leave to amend.
4. Seventh Cause of Action for Failure to Provide Accurate Wage Statements
All four Defendants demur to Plaintiff’s FAC on the basis that Plaintiff fails to state facts sufficient to maintain a cause of action for Failure to Provide Accurate Wage Statements.
The same arguments that apply to Plaintiff’s Sixth Cause of Action also apply to this cause of Action. Plaintiff has not alleged facts sufficient to show that Defendants were directly responsible for providing her with accurate wage statements. Additionally, none of the individually named Defendants were Plaintiff’s employer. Plaintiff’s FAC alleges that “ZO failed to provide May with accurate itemized wage statements” (FAC ¶ 197), and “as a proximate result of ZO’s conduct…” (FAC ¶ 198.) Plaintiff does not allege that the individual Defendants failed to provide her with the wage statements. As such, she cannot maintain a cause of action for failure to provide accurate wage statements against them.
Defendants’ Demurrer to Plaintiff’s Seventh Cause of Action is SUSTAINED with leave to amend.
5. Eighth Cause of Action for Waiting Time Penalties
All four Defendants demur to Plaintiff’s FAC on the basis that Plaintiff fails to state facts sufficient to maintain a cause of action for Waiting Time Penalties.
Once again, the same argues that apply to Plaintiff’s Sixth and Seventh Causes of Action apply to this one. Demurring Defendants were not Plaintiff’s employer. Further, Plaintiff has not alleged that the individual Defendants were responsible for the waiting time. Her FAC states that “ZO failed to pay all of May’s earned wages immediately upon termination.” (FAC ¶ 201.) She does not allege how the individual Defendants were responsible for this failure. As such, Plaintiff cannot maintain a cause of action for waiting time penalties against them.
Defendants’ Demurrer to Plaintiff’s Eighth Cause of Action is SUSTAINED with leave to amend.
6. Ninth Cause of Action for Intentional Infliction of Emotional Distress
All four Defendants demur to Plaintiff’s FAC on the basis that Plaintiff fails to state facts sufficient to maintain a cause of action for Intentional Infliction of Emotional Distress (IIED).
Workers’ Compensation Act
“Physical and emotional injuries sustained in the course of employment” are “preempted by the workers’ compensation scheme and generally will not support an independent cause of action.” (Yau v. Allen(2014) 229 Cal.App.4th 144, 161 (citing Cole v. Fair Oaks Fire Prot. Dist. (1987) 43 Cal.3d 148, 160).) As case law demonstrates, “emotional injuries caused by workplace discipline, including termination, fall within this rule.” (Yau, supra, 229 Cal.App.4th at 161 (citing Shoemaker v. Myers (1990) 52 Cal.3d 1, 7).) That is because “when the misconduct attributed to the employer is actions which are a normal part of the employment relationship, such as demotions, promotions, criticism of work practices, and frictions in negotiations as to grievances, an employee suffering emotional distress causing disability may not avoid the exclusive remedy provisions of the Labor Code by characterizing the employer’s decisions as manifestly unfair, outrageous, harassment, or intended to cause emotional disturbance.” (Cole, 43 Cal.3d at 160.) The California Supreme Court has held that “‘severe emotional distress’” arising from “‘outrageous conduct’” that occurred “at the worksite, in the normal course of the employer-employee relationship,” is the type of injury that falls within the exclusive province of workers’ compensation. (See Miklosy v. Regents of Univ. of Cal. (2008) 44 Cal.4th 87, 902; see also id. at 902-03 (holding that no exception to the workers’ compensation exclusivity rule allows for a “distinct cause of action, not dependent upon the violation of an express statute or violation of fundamental public policy”).)
Plaintiff has not alleged any facts that would put her cause of action for IIED outside of the purview of the Workers’ Compensation Act. Her claims were related to her employment at ZO or the actions of her fellow employees at ZO. (FAC ¶¶ 206-213.)
As such, Plaintiff may not maintain a cause of action for IIED against Defendants.
Adequate Facts
While it is unnecessary for the Court to address this since Plaintiff’s cause of action fails due to the Workers’ Compensation Act, it is worth noting that Plaintiff has also not pled facts with sufficient specificity to maintain this cause of action.
Defendant’s Demurrer to Plaintiff’s Ninth Cause of Action is SUSTAINED without leave to amend due to the Workers’ Compensation Act preemption.
7. Tenth Cause of Action for Battery
Defendant Connor demurs to this cause of action on the basis that Plaintiff fails to state facts sufficient to maintain a cause of action.
Defendant Connor demur on two bases (1) that Plaintiff’s cause of action for battery is barred by the Workers’ Compensation Act, and (2) that Plaintiff has failed to allege facts sufficient to support the cause of action.
Workers’ Compensation Act
Battery claims may be barred by the exclusivity provisions of the Workers’ Compensation Act (Lab. Code § 3600 et seq.). A claim may be barred if it does not allege that a defendant proximately caused injury by a willful or unprovoked physical act of aggression, and if it does not allege that any of a defendant’s actions were “intended to convey an actual, present, and apparent threat of bodily injury.” (Torres v. Parkhouse Tire Service, Inc. (2001) 26 Cal.4th 995, 1102.)
Plaintiff’s FAC alleges that Defendant Connor offered her a gummy candy when Plaintiff told her that she had a headache. (FAC ¶ 216.) While Plaintiff states that Connor did not tell her that it was a THC gummy (FAC ¶ 217), Plaintiff does not allege any facts indicating that Connor’s actions were intended to convey a threat of bodily injury. As such, Plaintiff’s cause of action for battery would be barred by the Workers’ Compensation Act exclusivity rule.
Adequate Facts
Plaintiff also does not allege facts sufficient to maintain a cause of action for battery. She does not allege facts sufficient to show that Connor intended to harm her by giving her the gummy, nor does she allege facts showing that she did not consent to taking the gummy.
Accordingly, Defendant Connor’s Demurrer to Plaintiff’s Tenth Cause of Action is SUSTAINED without leave to amend due to the Workers’ Compensation Act preemption.
III. ORDER
1. Defendants’ Demurrer to Plaintiff’s Third, Fifth, Sixth, Seventh, and Eighth Cause of Action is sustained with leave to amend.
2. Defendants’ Demurrer to Plaintiff’s Ninth and Tenth Causes of Action is sustained without leave to amend.
3. Plaintiff is given twenty days from the date of this order to file an amended complaint.