Judge Mark H. Epstein, Case Number: 23SMCV01272, Date: 2023-09-21 Tentative Ruling

Judge: Mark H. Epstein, Case: 23SMCV01272, Date: 2023-09-21 Tentative Ruling

Case Number: 23SMCV01272 Hearing Date: December 18, 2023 Dept: I

The demurrer is SUSTAINED WITHOUT LEAVE TO AMEND, but if evidence comes to light that would cause plaintiff to seek to re-add these defendants, plaintiff may seek leave to do so. The motion to strike is MOOT.

Plaintiff filed this sexual assault action against a number of defendants. According to the operative First Amended Complaint (FAC), plaintiff checked into The Hills to treat an addiction problem and while there she was sexually assaulted by defendant Young. According to plaintiff, defendants were aware of the assailant’s danger to patients but employed him anyway and put him in a position to attack plaintiff. In addition to The Hills, plaintiff sues entities that are affiliated with The Hills through corporate ownership ties.

The affiliated defendants demurred to the original complaint on the ground that they were not liable. Even if The Hills were liable, they argued, absent some allegation as to why the corporate affiliates can be sued, they had to be dismissed. The court agreed and sustained the demurrer with leave to amend. The court stated that it was not sufficient to include the stock allegation that everyone is everyone else’s alter ego (even if followed by the Witkin definition of alter ego) and that everyone is everyone’s agent and that everyone conspired together. Some more particularized factual assertion was needed to expand liability beyond Young and The Hills.

Plaintiff filed the FAC to cure this problem. Defendants, however, say that the problem still persists and that they need to be dismissed. They demur on that basis and on grounds of uncertainty. The uncertainty demurrer lacks merit. Such demurrers are disfavored and succeed only where the allegations are so disjointed that the defendant cannot figure out what is being alleged. (Butler v. Sequeira (1950) 100 Cal.App.2d 143.) The real issue is not uncertainty in that technical sense, but rather a failure to allege facts as to what the demurring defendants (Centered Health, LLC and Los Angeles Outpatient Center, LLC) did that would place them within the zone of potential liability.

At this, the pleading stage, plaintiff need not allege much. But all that is alleged is shared ownership and a common address and that is not enough. If it were, then the corporate veil would always be pierced until trial or summary judgment, and such is not the law. Of course, if plaintiff can allege in good faith that The Hills was in fact undercapitalized by its owner and that these entities are the owners, that might be enough. Or if plaintiff can allege in good faith that the demurring defendants used The Hills’ assets as their own (for example, paying bills from The Hills accounts that did not relate to The Hills), or something similar, that would be enough. Or if plaintiff could allege in good faith that the policies that allowed Young to be transferred rather than fired or placed on leave after the first allegation of sexual assault were policies put in place by these defendants rather than The Hills, that would be enough. But right now, there is nothing other than a very vague allegation. Instead, plaintiff just alleges that all defendants should be viewed together (FAC at ¶ 6), that each is the agent or alter ego of the other (id., at ¶ 7), or that everyone ratified everything that anyone did or that Young did (id., at ¶ 8), or a combination of the above (id., at ¶ 9). In the section entitled “Piercing the Corporate Veil,” plaintiff does not do better. There is an allegation without any detail that the demurring defendants “conducted their businesses, exercising complete control and dominance of such businesses to such an extent that” there was no separateness between them and The Hills. (Id., at ¶ 10.) Or that (on information and belief) that the demurring defendants were alter egos of The Hills because there was “a unity of interest and ownership between Defendants such that any separateness between them has ceased to exist.” (Id., at ¶ 12.) True, plaintiff claims that these entities share legal counsel in this case (id., at ¶ 14), and that there is a conflict of interest as a result (id., at ¶¶ 15-16). And plaintiff alleges that these entities share a common address. (Id., at ¶ 18.) But that is all. Those sorts of generalized and boilerplate allegations are not sufficient, even at the pleading stage.

Because this appears to be the best plaintiff can do, there is no point in granting leave to amend. Further, because the court has ruled on the ground set forth above, the court need not, and does not, comment on any of defendants’ other arguments.

However, and this is important, if plaintiff discovers some meat to put on those bones through the course of discovery, plaintiff is free to move for leave to amend and re-add these defendants. Leave to amend is freely given, and (again) not a whole lot of detail is required. The court also notes that it is a proper topic of discovery to attempt to ascertain facts that would bring these defendants back in the case. Such is plainly relevant to the subject matter of the suit and is reasonably calculated to lead to the discovery of admissible evidence, at least if the request is reasonable. This includes a reasonably deep dive financially into the fiscal ties between and among the parties and their corporate affiliates. Thus, while for now plaintiff has not even alleged enough, that could very well change and the court will not hesitate to allow an amendment if it does. Nor would the court anticipate that any such amendment would delay the trial. Given the fact that all of these defendants do share counsel, and given that the liability of these defendants would be indirect (most likely), meaning it would be through The Hills, the court would not be inclined to continue the trial if plaintiff moves with diligence.