Judge Holly J. Fujie, Case Number: 24STCV22134, Date: 2025-01-07 Tentative Ruling

MOVING PARTY: Defendants Rotten, Inc. and Michael Fisher (“Fisher”) (collectively, “Defendants”)

This is a harassment and wrongful termination action. On August 29, 2024, Plaintiff filed the operative complaint (the “Complaint”) against Defendants and Does 1 through 10 alleging causes of action for: (1) unlawful harassment [Government Code (“Gov. Code”) § 12940(j)]; (2) unlawful retaliation [Gov. Code § 12940(h)]; (3) failure to take reasonable steps to prevent and/or correct harassment and retaliation [Gov. Code § 12940(k)]; (4) wrongful discharge in violation of public policy; and (5) breach of contract.

On October 21, 2024, Defendants filed the instant demurrer (“Demurrer”) to each of the five causes of action stated in the Complaint on the grounds that they fail to state facts sufficient to constitute a cause of action, or in the alternative, are uncertain. On December 23, 2024, Plaintiff filed an opposition (“Opposition”) to the Motion and on December 30, 2024, Defendants filed a reply (“Reply”).

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747; see Code of Civil Procedure (“CCP”) § 430.10, subd. (e).)

To sufficiently allege a cause of action, a complaint must allege all the ultimate facts—that is, the facts needed to establish each element of the cause of action pleaded. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 212, superseded by statute as stated in Branick v. Downey Savings & Loan Assn. (2006) 39 Cal.4th 235, 242.) “[E]ach evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.” (C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.)

In testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-67.) Courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228, disapproved on other grounds, Jones v. Lodge at Torrey Pines Partnership (2008) 42 Cal.4th 1158, 1162.) A demurrer, however, “does not admit contentions, deductions or conclusions of fact or law.” (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.)

A demurrer for uncertainty lies where the pleading is uncertain, ambiguous, or unintelligible. (CCP, § 430.10, subd. (f).)

“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 California, Inc. (1993) 14 Cal.App.4th 612, 616, disapproved on other grounds in Quelimane Co. v. Stewart Title Guar. Co. (1998) 19 Cal.4th 26, 46 [holding claims for unfair business practices need not be pled specifically, impliedly disapproving Khoury].) As a result, a special demurrer for uncertainty is not intended to reach failure to incorporate sufficient facts in the pleading but is directed only at uncertainty existing in the allegations already made. (People v. Taliaferro (1957) 149 Cal.App.2d 822, 825, disapproved on other grounds in Jefferson v. J.E. French Co. (1960) 54 Cal.2d 717, 719-720 [statute of limitations question].)

Where a complaint is sufficient to state a cause of action and to apprise a defendant of issues he is to meet, it is not properly subject to a special demurrer for uncertainty. (Gressley v. Williams (1961) 193 Cal.App.2d 636, 643 [“A special demurrer [for uncertainty] should be overruled where the allegations of the complaint are sufficiently clear to apprise the defendant of the issues which he is to meet”].)

Government Code section¿12940 subdivision (j) governs harassment of employees under the Fair Employment and Housing Act ("FEHA"). "Harassment of an employee, an applicant, an unpaid intern or volunteer, or a person providing services pursuant to a contract by an employee, other than an agent or supervisor, shall be unlawful if the entity, or its agents or supervisors, knows or should have known of this conduct and fails to take immediate and appropriate corrective action." (Gov. Code, § 12940, subd. (j)(1).) Quid pro quo harassment occurs when a term of employment is conditioned upon submission to unwelcome sexual advances. (Hughes v. Pair (2009) 46 Cal.4th 1035, 1043.) To state a cause of action on a quid pro quo theory under FEHA, “it is sufficient to allege that a term of employment was expressly or impliedly conditioned upon acceptance of a supervisor’s unwelcome sexual advances.” (Mogilefsky v. Superior Court (1993) 20 Cal.App.4th 1409, 1414.)

Defendants argue that Plaintiff has failed to state facts sufficient to show that Fisher made a sexual advance or that Fisher communicated that Plaintiff’s employment was conditioned on acceptance of an advance. (Demurrer, Memo of Points and Auths., p. 4.) The Complaint alleges that in April 2024, Fisher booked separate hotel rooms for each male and female employee to attend a week-long convention but “informed Plaintiff that he would not receive his own hotel room, but that he would be sharing a room with Fisher.” (Compl. ¶ 24.) The Complaint alleges that “via slack, Fisher asked Plaintiff to inform him if that was an issue” and that “Plaintiff responded, that yes, he had an issue with that, and that he did not want to share a room with Fisher.” (Compl. ¶¶ 25-26.) Plaintiff alleges that in May 2024, “Fisher suddenly informed Plaintiff that he would not be attending [the convention] and that this was Plaintiff’s last day at the company.” (Compl. ¶ 29.)

This is insufficient to state a cause of action for harassment. In the Opposition, Plaintiff cites to Myers v. Trendwest Resorts, Inc. (2007) 148 Cal.App.4th 1403, 1425, for the assertion that asking a subordinate to share a hotel room can constitute FEHA sexual harassment. In Myers, however, the request to share a hotel room was one incident in a series of unwanted advances from the plaintiff’s supervisor, including an assault, that occurred over a two-year period. (Myers, supra, 148 Cal.App.4th at 140) In this case, Fisher stated that he and Plaintiff would be sharing a hotel room, asked Plaintiff if he was okay with that, and Plaintiff responded that he was not. Plaintiff does not present any case law that suggests this alone is sufficient to state a cause of action for sexual harassment. Thus, Plaintiff has not stated facts sufficient to allege a cause of action for harassment.

Accordingly, the Demurrer to the first cause of action is SUSTAINED, with leave to amend.

Under California case law, “to establish a prima facie case of retaliation under the FEHA, a plaintiff must show (1) he or she engaged in a ‘protected activity,’ (2) the employer subjected the employee to an adverse employment action, and (3) a causal link existed between the protected activity and the employer's action. [Citations.]” (Yanowitz v. L’Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1044.) Specifically, section 12940 subdivision (h) makes it an unlawful employment practice “[f]or any employer ... to discharge, expel, or otherwise discriminate against any person because the person has opposed any practices forbidden under this part or because the person has filed a complaint, testified, or assisted in any proceeding under this part.” (Gov. Code § 12940 subd. (h).)

As alleged, the FEHA retaliation claim is based on Plaintiff’s resistance to sharing a hotel room with Fisher. (Compl. ¶¶ 43-52) As discussed above, the Court does not find that Fisher’s proposition to share a hotel room constitutes harassing conduct under FEHA and thus does not constitute “practices forbidden under this part” as used in Gov. Code section 12940 subdivision (h). Accordingly, Plaintiff’s opposition to sharing a room to is not a protected activity for which he could be subject to retaliation. Thus, Plaintiff has not stated facts sufficient to allege a cause of action for retaliation.

Accordingly, the Demurrer to the second cause of action is SUSTAINED, with leave to amend.

Third Cause of Action – Failure to Take Reasonable Steps to Prevent and/or Correct Harassment and Retaliation [Gov. Code § 12940(k)]

Gov. Code section 12940 subdivision (k) provides that it is an unlawful employment practice “[f]or an employer, labor organization, employment agency, apprenticeship training program, or any training program leading to employment, to fail to take all reasonable steps necessary to prevent discrimination and harassment from occurring.” (Gov. Code, § 12940, subd. (k).) To establish this claim, a plaintiff must establish the defendant’s legal duty of care, breach of duty, legal causation, and damages to the plaintiff. (Trujillo v. North County Transit District (1998) 63 Cal.App.4th 280, 286-287.)

Because the Court has sustained the Demurrer as to the harassment and retaliation causes of action, the Demurrer to the third cause of action for failure to prevent harassment and retaliation is SUSTAINED, with leave to amend, as well.

The elements of a claim for wrongful discharge in violation of public policy are: (1) an employer-employee relationship, (2) the employer terminated the plaintiff’s employment, (3) the termination was substantially motivated by a violation of public policy, and (4) the discharge caused the plaintiff harm. (Nosal-Tabor v. Sharp Chula Vista Medical Center (2015) 239 Cal.App.4th 1224, 1234-35.) A discharge is actionable as against public policy if it violates a policy that is: (1) delineated in either constitutional or statutory provisions; (2) public in the sense that it inures to the benefit of the public rather than serving merely the interests of the individual; (3) well-established at the time of discharge; and (4) substantial and fundamental. (Id. at 1238-39.)

Similarly, because the Court does not find that Plaintiff has sufficiently pled causes of action for harassment or retaliation under FEHA, the Demurrer to the fourth cause of action for wrongful termination is SUSTAINED, with leave to amend.

“To establish a cause of action for breach of contract, the plaintiff must plead and prove (1) the existence of the contract, (2) the plaintiff’s performance or excuse for nonperformance, (3) the defendant’s breach, and (4) resulting damages to the plaintiff. [Citation.]” (Maxwell v. Dolezal (2014) 231 Cal.App.4th 93, 97-98.) “If the action is based on an alleged breach of a written contract, the terms must be set out verbatim in the body of the complaint or a copy of the written agreement must be attached and incorporated by reference.” (Harris v. Rudin, Richman & Appel (1999) 74 Cal.App.4th 229, 307.)

In the Complaint, Plaintiff alleges that he “entered into a written employment agreement by which Plaintiff agreed to perform work duties for Defendant Rotten, and Defendants agreed that “Subject to approval by the Company’s Board of Directors and to the extent permitted by applicable law, the Company anticipates granting you an incentive stock option to purchase 110,742 shares of the Company’s common stock at the fair market value as determined by the Board as of the date of grant.” (Compl. ¶ 75) Plaintiff alleges that he “was not able to execute his equity options that had matured, and which was earned compensation for the work that he had performed through his termination date.” (Compl. ¶ 31.)

Defendants argue that Plaintiff has not sufficiently alleged a contractual agreement between the parties because the terms of the agreement, which was specifically “subject to approval” and “anticipates granting you an incentive stock option,” lack sufficient certainty to form the basis of a contract. (Demurrer pp. 6:25-7:15.) The Court finds that Plaintiff has plead facts sufficient to state a cause of action for breach of contract. Plaintiff alleges that there was an employment agreement between the parties, which included certain terms for stock options. Plaintiff alleges that he is entitled to those options and that Defendants failed to fulfill this obligation. Whether the conditions for the equity component of the employment contract were met, thereby entitling Plaintiff to the stock options, is a matter of discovery more appropriately addressed at the summary judgment stage.

The Demurrer to the first through fourth causes of action is SUSTAINED, with 20 days leave to amend. The Demurrer to the fifth cause of action is OVERRULED.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Hon. Holly J. Fujie

Judge of the Superior Court