Judge: Gregory Keosian, Case: 23STCV07993, Date: 2023-08-10 Tentative Ruling
Case Number: 23STCV07993 Hearing Date: August 10, 2023 Dept: 61
Defendants
Streamland Media, Inc., William Romeo, and Cara Sheppard’s Demurrer to the
Complaint is SUSTAINED with leave to amend as to the fifth and sixth causes of
action for conversion and receipt of stolen property, and OVERRULED as to the
third cause of action for failure to pay wages upon termination.
I.
DEMURRER
A demurrer should be sustained only where the defects appear
on the face of the pleading or are judicially noticed. (Code Civ. Pro., §§
430.30, et seq.) In particular, as is
relevant here, a court should sustain a demurrer if a complaint does not allege
facts that are legally sufficient to constitute a cause of action. (See
id. § 430.10, subd. (e).) As the Supreme Court held in Blank v. Kirwan (1985) 39 Cal.3d 311:
“We treat the demurrer as admitting all material facts properly pleaded, but
not contentions, deductions or conclusions of fact or law. . . . Further, we
give the complaint a reasonable interpretation, reading it as a whole and its
parts in their context.” (Id. at
p. 318; see also Hahn. v. Mirda
(2007) 147 Cal.App.4th 740, 747 [“A demurrer tests the pleadings alone and not
the evidence or other extrinsic matters. Therefore, it lies only where the
defects appear on the face of the pleading or are judicially noticed.
[Citation.]”)
“In determining whether the complaint is sufficient as
against the demurrer … if on consideration of all the facts stated it appears
the plaintiff is entitled to any relief at the hands of the court against the
defendants the complaint will be held good although the facts may not be
clearly stated.” (Gressley v. Williams (1961) 193 Cal.App.2d 636, 639.)
“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.)
A demurrer should not be sustained without leave to amend if
the complaint, liberally construed, can state a cause of action under any
theory or if there is a reasonable possibility the defect can be cured by
amendment. (Schifando v. City of Los Angeles, supra, 31 Cal.4th at p.
1081.) The demurrer also may be sustained without leave to amend where the
nature of the defects and previous unsuccessful attempts to plead render it
probable plaintiff cannot state a cause of action. (Krawitz v. Rusch
(1989) 209 Cal.App.3d 957, 967.)
Defendants Streamland Media, Inc., William Romeo, and Cara
Sheppard (Defendants) demurrer to the Complaint of Plaintiff Michael Polito
(Plaintiff) on the following grounds. They demurrer to the third cause of
action for failure to pay wages due at termination under Labor Code § 558.1, as
asserted against Romeo and Sheppard, on the grounds that the Complaint does not
contain sufficient facts to conclude that these individuals are managing agents
under that statute. (Demurrer at pp. 5–6.) Defendants further argue that the
fifth cause of action for conversion fails because Plaintiff alleges merely a
contractual right of payment from Defendants, not the conversion of funds
belonging to him. (Demurrer at pp. 6–7.) Defendants demurrer to the sixth cause
of action for receiving stolen property under Penal Code § 496 for the same
reason. (Demurrer at p. 7.)
Defendants’ first argument as to
Labor Code § 558.1 is without merit. Liability for failing to pay wages owed
may be asserted against an employer or “a natural person who is an owner,
director, officer, or managing agent of the employer.” (Lab. Code § 558.1,
subd. (b).) The Complaint here alleges that Defendants Romeo and Sheppard are
respectively the CEO and President of Streamland and its “Pictureshop”
division, and in these capacities are both managing agents who directed that Streamland
not pay Plaintiff the monies owed him under his contract. (Complaint ¶¶ 12–13.)
An allegation of agency is one of ultimate facts that is sufficient against a demurrer.
(Kiseskey v. Carpenters' Trust for So. California (1983) 144 Cal.App.3d
222, 230.) Moreover, while Defendants object to Plaintiff’s failure to plead
specific facts showing the individual defendants’ job responsibilities, as well
as how specifically they had a role in Plaintiff’s alleged injury, “[l]ess
specificity [of pleading] is required when ‘it appears from the nature of the
allegations that the defendant
must necessarily
possess full information
concerning the facts of the controversy.” (Rossberg v. Bank of America, N.A.
(2013) 219 Cal.App.4th 1481, 1500.) Here, Streamland’s internal organization,
Defendants’ respective places within that organization, and their roles in
causing Plaintiff’s alleged injury, are better known to them than to Plaintiff.
Having pleaded the ultimate facts of their managing-agent status and their role
in causing Plaintiff’s harm, further allegations are not required. The demurrer
is therefore OVERRULED as to the third cause of action.
Defendants’ arguments as to the conversion and stolen
property claims, however, are more persuasive. The elements of a conversion
claim are “(1) the plaintiff's ownership or right to possession of personal
property; (2) the defendant's disposition of the property in a manner that is
inconsistent with the plaintiff's property rights; and (3) resulting damages.”
(Regent Alliance Ltd. v. Rabizadeh (2014) 231 Cal.App.4th 1177, 1181.) A
conversion claim may be had as to money, but the plaintiff must prove
interference with “plaintiff's possessory interest in a specific,
identifiable sum.” (Voris v. Lampert (2019) 7 Cal.5th 1141, 1151,
italics in original.) “[A] mere contractual right of payment, without more,
will not suffice” to state a conversion claim. (Plummer v. Day/Eisenberg,
LLP (2010) 184 Cal.App.4th 38, 45.) “[T]o put the matter simply, a
plaintiff has no claim for conversion merely because the defendant has a bank
account and owes the plaintiff money.” (Voris, supra, 7 Cal.5th
at p. 1152.)
Here, Plaintiff does not plead a possessory interest in a
specific sum of money, such as a lien upon a specific fund. Rather, Plaintiff
specifically alleges only a contractual right to severance pay: “By refusing to
pay the owed severance, Defendants wrongfully converted Plaintiff’s contractual
right.” (Complaint ¶ 54.) Such allegations do not constitute conversion.
The same logic requires the same conclusion as to
Plaintiff’s sixth cause of action under Penal Code § 496 for receiving stolen
property. “The elements of the offense of receiving stolen property are (1)
that the property has been stolen; (2) that the accused received, concealed or
withheld it from its owner; and (3) that the accused knew the property was
stolen.” (People v. Stuart (1969) 272 Cal.App.2d 653, 656.) But here,
the severance payments were not “stolen” from Plaintiff; they simply were not
paid to him pursuant to an alleged contractual obligation. This does not
suffice to state a claim under Penal Code § 496. (See Lacagnina v.
Comprehend Systems, Inc. (2018) 25 Cal.App.5th 955, 971 [holding that there
was no section 496 claim where the plaintiff “received a contractually
agreed-upon salary, and had a dispute with his employer about the amount of
commissions and other compensation due him on termination”].)
The demurrer is therefore SUSTAINED with leave to amend as
to the fifth and sixth causes of action, and OVERRULED as to the third cause of
action.