Judge Gail Killefer, Case 22STCV26668 2023-04-05 Tentative Ruling

MOTION: Defendants’ Demurrer to the Third Amended Complaint; Defendants’ Motion to Strike Portions of Third Amended Complaint

MOVING PARTIES: Defendant California Horse Racing Board (individually referred to as “CHRB”), Defendant Dr. Gregory L. Ferraro (“Ferraro”), Defendant Scott Chaney (“Chaney”), Defendant Oscar Gonzalez (“Gonzalez”), Defendant Dennis V. Alfieri (“Alfieri”), Defendant Damascus Castellanos (“Castellanos”), Defendant Brenda Washington Davis (“Davis”), Defendant Thomas C. Hudnut (“Hudnut”), and Defendant Wendy Mitchell (“Mitchell”)

TENTATIVE: Defendants’ demurrer is sustained. Defendants’ motion to strike is moot. Plaintiff is granted 30 days leave to amend. Defendants are to give notice.

This action arises out of the work by Richard Baltas (“Plaintiff”) as a horse trainer, licensed by the CHRB. Defendant CHRB is charged with administering the California Business & Profes-sions Code § 19400, et seq., and the California Horse Racing Rules, (“CHRB Rules”).

The complaint alleges that on May 8, 2022, one of Plaintiff’s employees was seen on videotape administering an oral dose syringe into the mouth of Noble Reflection, one of the horses trained by Plaintiff, before a horse race at Santa Anita Park. On May 10, a representative of the owner of Santa Anita Park notified Plaintiff that he was prohibited from entering any horses at Santa Anita. The CHRB thereafter mandated Plaintiff not enter any horses at any track in California from May 8, 2022, through the present date.

On June 21, 2022, the CHRB filed a Complaint against Plaintiff, alleging violations of CHRB Rules 1843.5, 1887(a), and 1902. The Board of Stewards of the CHRB held hearings regarding these complaints in September and October 2022. The Board of Stewards issues their ruling on December 2, 2022, finding violations against Plaintiff. On January 11, 2023, Plaintiff appealed the Board of Stewards’ decision. No final decision has been made on appeal.

Plaintiff’s operative Third Amended Complaint (“FAC”) alleges two causes of action: (1) violation of the Bane Act, Civil Code § 52.1; and (2) declaratory and injunctive relief.

Defendants now demur to each cause of action of the TAC and moves to strike portions of the TAC. Plaintiff opposes both motions.

Defendants request that the court take judicial notice of the following in support of its demurrer to the TAC:

1. The CHRB’s Administrative Complaint, Case No. 22SA0092, dated June 21, 2022 (Exhibit 1);

2. Richard Baltas’s Verified Petition for Writ of Mandate filed June 29, 2022 in the Richard Baltas v. California Horse Racing Board matter, Los Angeles County Superior Court, Case No. 22STCP02434 (Exhibit 2);

3. The Declaration of Darrell J. Vienna filed in support of Richard Baltas’s Ex Parte Application For Stay of CHRB Decisions and Exhibit H to said Declaration, filed June 29, 2022 in the Richard Baltas v. California Horse Racing Board matter, Los Angeles County Superior Court, Case No. 22STCP02434 (Exhibit 3);

4. The Ex Parte Application For Stay of CHRB Decisions filed June 29, 2022 in the Richard Baltas v. California Horse Racing Board matter, Los Angeles County Superior Court, Case No. 22STCP02434 (Exhibit 4);

5. The December 2, 2022 Ruling and January 1, 2023 Statement of Decision of the Board of Stewards on the CHRB’s Administrative Complaint, Case Number 22SA0092 (Exhibit 5);

6. Motion for Leave to Amend Petition filed January 18, 2023 in the Richard Baltas v. California Horse Racing Board, Los Angeles County Superior Court, Case No. 22STCP02434 (Exhibit 6)

Plaintiff requests judicial notice of the following in support of his opposition:

7. Notice of Decision Not to Adopt Proposed Decision and Order Directing Preparation of the Record, Case No. SAC 22-0021, before the California Horse Racing Board of the State of California (Exhibit 3).

Defendants request further judicial notice of the following in support of their reply:

8. The CHRB’s Notice of Decision Not To Adopt Proposed Decision And Order Directing Preparation Of The Record, Case No. SAC 22-0071, dated March 20, 2023 (Exhibit 1).

The parties’ requests are granted. The existence and legal significance of these documents is a proper matter for judicial notice. (Evid. Code § 452(h).)

A demurrer is an objection to a pleading, the grounds for which are apparent from either the face of the complaint or a matter of which the court may take judicial notice. (CCP § 430.30(a); see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The purpose of a demurrer is to challenge the sufficiency of a pleading “by raising questions of law.” (Postley v. Harvey (1984) 153 Cal.App.3d 280, 286.) The court “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. . . .” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525 (Berkley).) “In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” (CCP § 452; see also Stevens v. Sup. Ct. (1999) 75 Cal.App.4th 594, 601.) “When a court evaluates a complaint, the plaintiff is entitled to reasonable inferences from the facts pled.” (Duval v. Board of Trustees (2001) 93 Cal.App.4th 902, 906.)

The general rule is that the plaintiff need only allege ultimate facts, not evidentiary facts. (Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550.) “All that is required of a plaintiff, as a matter of pleading, even as against a special demurrer, is that his complaint set forth the essential facts of the case with reasonable precision and with sufficient particularity to acquaint the defendant with the nature, source and extent of his cause of action.” (Rannard v. Lockheed Aircraft Corp. (1945) 26 Cal.2d 149, 156-157.) “[D]emurrers for uncertainty are disfavored and are granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond.” (Mahan v. Charles W. Chan Ins. Agency, Inc. (2017) 14 Cal.App.5th 841, 848, fn. 3 (Mahan), citing Lickiss v. Fin. Indus. Regulatory Auth. (2012) 208 Cal.App.4th 1125, 1135.) In addition, even where a complaint is in some respects uncertain, courts strictly construe a demurrer for uncertainty “because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616.)

Demurrers do not lie as to only parts of causes of action where some valid claim is alleged but “must dispose of an entire cause of action to be sustained.” (Poizner v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 119.) “Generally it is an abuse of discretion to sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment.” (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.)

“Exhaustion of administrative remedies is a jurisdictional prerequisite to resort to the courts.”¿ (Johnson v. City of Loma Linda (2000) 24 Cal.4th 61, 70.) A civil action must be brought “within one year after the filing of a complaint” with the DFEH.¿ (Gov. Code § 12965.)¿ A DFEH complaint must be filed within one year of the alleged wrongful conduct.¿ (Gov. Code § 12960(d).)¿

A party making an administrative complaint must “set forth the particulars” of the alleged unlawful practices.¿ (Gov. Code § 12960(b).) “After the filing of any complaint alleging facts sufficient to constitute a violation of any of the provisions of this part, the department shall make prompt investigation in connection therewith.”¿ (Gov. Code § 12963.)¿ The purpose of the charge is to supply fair notice of the facts, sufficient to permit investigation.”¿ (Hobson v. Raychem Corp. (1999) 73 Cal.App.4th 614, 630 disapproved of on other grounds by Colmenares v. Braemar Country Club, Inc. (2003) 29 Cal.4th 1019.)¿

“[U]nder the Tort Claims Act, all governmental tort liability is based on statute.” (Lopez v. Southern Cal. Rapid Transit Dist. (1985) 40 Cal.3d 780, 795.) Pursuant to Gov. Code § 815(a), “except as otherwise provided by statute,” “a public entity is not liable for an injury, whether such injury arises out of an act or omission of the public entity or a public employee or any other person.” Pursuant to Gov. Code § 815.2(b), “except as otherwise provided by statute, a public entity is not liable for an injury resulting from an act or omission of an employee of the public entity where the employee is immune from liability.” Additionally, “[e]xcept as otherwise provided by statute, a public employee is not liable for an injury resulting from his act or omission where the act or omission was the result of the exercise of the discretion vested in him, whether or not such discretion be abused.” (Gov. Code § 820.2.)

Except as provided in Sections 946.4 and 946.6, no suit for money or damages may be brought against a public entity on a cause of action for which a claim is required to be presented in accordance with Chapter 1 (commencing with Section 900) and Chapter 2 (commencing with Section 910) of Part 3 of this division until a written claim therefor has been presented to the public entity and has been acted upon by the board, or has been deemed to have been rejected by the board, in accordance with Chapters 1 and 2 of Part 3 of this division.¿ (Gov. Code, § 945.4.)

The claim presentation requirement is “is not merely procedural, but is a condition precedent to maintaining a cause of action and, thus, is an element of the plaintiff's cause of action.” (Perez v. Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1236.) A party suing a public entity must allege compliance with this requirement, or that a recognized exception exists. (Gong v. City of Rosemead (2014) 226 Cal.App.4th 363, 374. A party may allege compliance with this requirement by including a general allegation that “he or she timely complied.” (Id.) “If the plaintiff fails to include the necessary allegations, the complaint is subject to attack by demurrer.” (Id.)

Defendants contend that all causes of action in the TAC fail because Plaintiff has failed to exhaust his administrative and judicial remedies and further, fails to allege compliance with the Government Tort Claims Act. (Demurrer, 11-16, 22.) Defendants first contend that the “CHRB is charged with adjudicating controversies under the Horse Racing Law And rules,” where the Board of Stewards:

“hears controversies under a delegation of power from the CHRB and utilizes its own set of procedures (see Business and Professions Code section 19440, subdivision (b)); the Board of Stewards have general authority and supervision over all licensees and other persons attendant on horses and have the authority to suspend licenses (see Cal. Code Regs., tit. 4, §§1527-1529); and, when revocations are at stake, the CHRB proceedings must be conducted in accordance with Government Code sections 11500 to 11529 (see Business and Professions Code section 19461) and not Government Code sections 11460.10 as Plaintiff contends. Following a decision by the stewards, an appeal can be taken and any decision on appeal must be in writing and is subject to review by a court with jurisdiction. (See Cal. Code Regs., tit. 4, §§1761, 1763.) It is without question that statutory and lawful regulations exist which establish a quasi-judicial administrative tribunal to adjudicate statutory remedies. Only after a determination has been made at the administrative level and said determination is made final can Plaintiff seek judicial review via mandamus under Code of Civil Procedure section 1094.5 (“Section 1094.5”). Business and Professions Code section 19463 requires a party to commence a legal action challenging any final administration action of the CHRB within 30 days of the board's action. (See San Luis Rey Racing, Inc. v. California Horse Racing Bd. (2017) 15 Cal.App.5th 67, 80; see also Capitol Racing, LLC v. California Horse Racing Bd. (2008) 161 Cal.App.4th 892, 900 [concluding § 19463 governs challenges to administrative orders of the CHRB].) Thus, this Court may act ‘only to review the final administrative determination,’ for which none has been made.” (Dem., 11-12.)

Defendants explain that the “CHRB decision as to whether Plaintiff did in fact violate CHRB Rules is not finalized.” (Dem., 12-13.) Further, Defendants contend Plaintiff has failed to exhaust judicial resources before filing this suit since

“Plaintiff is presently pursuing a judicial challenge by writ of mandate to the CHRB's decisions to refuse entry of his two horses and suspend his license. Plaintiff is even seeking tort damages under the Banes Act from his writ petition. (See Richard Baltas v. California Horse Racing Board (Super. Ct. Los Angeles County, 2022, No. 22STCP02434); accord RJN, Ex. 6.) Therefore, until Plaintiff prevails on his writ petition, he is precluded from filing the present Third Amended Complaint against the CHRB relating to said decisions.

Plaintiff cannot avoid the fact that the gravamen of his claims are confined to the hearing process and writ process thereafter. Accordingly, Plaintiff’s failure to exhaust judicial remedies bars all of his claims. (See, e.g., Chevlin v. Los Angeles Community College Dist., 212 Cal.App.3d 382, 391 (Cal. App. 1989) [proper forum for student to assert constitutional violations was in mandamus litigation].)” (Dem., 13-14.)

Alternatively, Defendants contend the court should abstain from adjudicating Plaintiff’s claims in the TAC since

“granting Plaintiff’s requested relief would require the trial court to assume the function of the CHRB and this Court in the parallel writ proceeding, and would interfere with the function of the CHRB in administrating and enforcing rules and regulations affecting horse racing. No final decision has been reached in the CHRB administrative complaint against Plaintiff. Further, no harm would befall Plaintiff if the Court exercised its discretion and abstained from adjudicating these claims as Plaintiff would not have lost his “day in court” since he is challenging the administrative decisions in his writ proceeding. Plaintiff proceeding with his tort claims here, before the CHRB issues its final administrative decision and before the Court adjudicates his writ petition, would run afoul of what the law requires.” (Dem., 16.)

In opposition, Plaintiff makes the conclusory contention that he has exhausted his administrative remedies since he “has pled that the results are predetermined and that waiting further would be the ultimate act of futility.” (Opp., 6.) Plaintiff provides no support for this contention. Plaintiff contends he was not required to exhaust administrative remedies at all since “the CHRB already determined the outcome of the hearing before the hearing ever took place.” (Opp., 7; citing Foster v. Sexton (2021) 61 Cal.App.5th 998, 1025; Brown v. City of Los Angeles (2002) 102 Cal.App.4th 155, 168.) Plaintiff again provides no support for his contention that the appeal process has been futile or that the challenged procedures have been the source of any alleged damages to Plaintiff. Plaintiff also contends that the “[e]xhaustion of judicial remedies is inapplicable” here since the raising issues allegedly could not be decided by the administrative hearing. (Opp., 7-8.) Plaintiff again fails to provide support for such a conclusory contention.

In reply, Defendants repeat that as “there is no underlying decision to be challenged and no decision has effectively been rendered or adopted, Plaintiff is before this Court prematurely...” (Reply, 1-2.) Defendants correctly explain “Plaintiff cannot positively state or even pretend to positively state what the outcome of the underlying administrative hearing will be as the matter and decision remain pending,” and, therefore, arguments regarding the futility of the appeals process are themselves futile. (Reply, 2-3.)

“Plaintiff is actively litigating the exact same claims at the administrative level which are at issue in this civil lawsuit. The ultimate decision of the Board at the administrative level will directly [sic] whether Plaintiff can bring a civil suit outside of the writ of mandamus process. That the Bane Act may be brought independent of any other claims is not dispositive of the fact that Plaintiff failed to exhaust judicial remedies before filing this suit.” (Reply, 4.)

Lastly, Defendants further contend the claims are also prohibited under the Litigation privilege since most of the “alleged acts or omissions forming the basis of Plaintiff’s claims arise out of protected acts under Civil Code § 47, which include: (1) Defendants’ investigation of Plaintiff’s horses and the actions of Plaintiff and his employees; (2) determining Plaintiff’s actions violated the aforementioned CHRB Rules; (3) preparing and serving the administrative complaint for the violations of the aforementioned CHRB Rules, (4) litigating in a quasi-judicial setting (the administrative hearing) the administrative complaint, which litigation included the taking of testimony, presentation of evidence, and argument; (5) rendering the final decision; and (6) appealing the final decision by the Plaintiff.” (Reply, 10.)

Judges have immunity from civil suit in the exercise of their judicial functions, even when their acts are alleged to have been done maliciously and corruptly. (Frost v. Geernaert (1988) 200 Cal.App.3d 1104, 1107.) “Judicial immunity is a principle of common law which is necessary for the welfare of the state and the peace and happiness of society. [Citation.]” (Id. at 1107–1108.) Immunity is extended to the employees of the Superior Court when they are acting within the course and scope of their employment that includes an integral part of the judicial process or is intimately associated with it (quasi-immunity). (Falls v. Superior Court (1996) 42 Cal.App.4th 1031, 1043–1044.) Civil Code § 47 is a codification of the litigation privilege that protects communications related to judicial proceedings. These communications are “absolutely immune from tort liability.” (Tom Jones Enterprises, Ltd. V. County of Los Angeles (2013) 212 Cal.App.4th 1283, 1294.)

Civil Code § 47(b) provides an absolute privilege for communications made in any legislative proceeding, in any judicial proceeding, in any other official proceeding authorized by law, or in the initiation or course of any other proceeding authorized by law. (See Civ. Code, § 47(b); Hagberg v. California Federal Bank FSB (2004) 32 Cal.4th 350, 360 (Hagberg).) Section 47(b) bars all tort causes of action except malicious prosecution. (Hagberg, supra, 32 Cal.4th at 360.) Section 47(b) only applies to communicative acts, not tortious conduct. (Buchanan v. Maxfield Enterprises, Inc. (2005) 130 Cal.App.4th 418, 423.) “The threshold issue in determining whether the litigation privilege applies is whether the defendant’s conduct was communicative or noncommunicative.” (Id.)

Liberally construing the allegations of the TAC in favor of Plaintiff, the court finds that the TAC fails to sufficiently show an exhaustion of administrative and/or judicial remedies, compliance with the Government Claims Act, and inapplicability of the Litigation Privilege. As discussed above, Plaintiff’s conclusory contentions regarding the futility of administrative remedies or exhaustion thereof hold little water since there is no underlying decision from which to appeal to this court for review. Plaintiff asks this court to render a decision concurrently with an administrative body charged with hearing such claims, as well as a writ petition regarding the same issues. The court will not engage in a further complicating of the web of claims here, as the administrative body charged with hearing these claims is first empowered to render their appellate decision. Thus, the TAC does not sufficiently allege exhaustion of administrative remedies and the court will sustain Defendants’ demurrer on this basis.

[1] Defendants submit the declaration of their counsel, Kevin Y. Kanooni (“Kanooni”), in support of the instant demurrer and motions to strike. Kanooni attests that on February 13, 2023 counsels telephonically met and conferred regarding the issues raised here and were unable to reach an agreement. (Kanooni Decl. ¶ 2, Ex. A.) The Kanooni Declaration is sufficient for purposes of CCP §§ 430.41 and 435.5.