Judge: Maurice A. Leiter, Case: 20STCV04582, Date: 2022-08-15 Tentative Ruling

Case Number: 20STCV04582    Hearing Date: August 15, 2022    Dept: 54

Hearing Date: August 15, 2022

Department 54, Judge Maurice A. Leiter

Motion for Summary Judgment, or in the alternative, Motion for Summary Adjudication

Moving Party: Defendants Los Angeles Turf Club, Incorporated and Los Angeles Turf Club II, Inc.

Responding Party: Plaintiff George Sharp

T/R:     DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT IS DENIED.

DEFENDANTS TO NOTICE.

If the parties wish to submit on the tentative, please email the courtroom at¿SMCdept54@lacourt.org¿with notice to opposing counsel (or self-represented party) before 8:00 am on the day of the hearing.

The Court considers the moving papers, opposition, reply, and supplemental briefing requested by the Court.

BACKGROUND

            On February 24, 2020, Plaintiff George Sharp filed a first amended complaint against Defendants Santa Anita Park, The Stronach Group, Los Angeles Turf Club, Inc. and Los Angeles Turf Club II, Inc., asserting causes of action for (1) breach of contract; (2) fraud; (3) negligent misrepresentation; (4) violation of Bus. & Prof. Code § 17200; (5) violation of Bus. & Prof. Code § 17500; and (6) intentional infliction of emotional distress. On September 16, 2020, the Court sustained the demurrer of Defendants Los Angeles Turf Club, Inc. and Los Angeles Turf Club II, Inc. to the second, third, fourth, fifth and sixth causes of action with leave to amend.

On October 16, 2020, Plaintiff filed a second amended complaint, adding a seventh cause of action for negligence. On March 22, 2021, the Court sustained Defendants’ demurrer in part and overruled it in part. Plaintiff filed the operative third amended complaint on April 22, 2021, asserting causes of action for (1) breach of contract; (2) violation of Bus. & Prof. Code § 17200; (3) violation of Bus. & Prof. Code § 17500; and (4) negligence.

Plaintiff alleges that Defendants improperly “scratched” Plaintiff’s horse, League of Shadows (Shadow), from the January 18, 2020 California Cup Sprint race. Plaintiff claims the racing veterinarian did not perform an examination in conformity with the rules of the California Horse Racing Board (CHRB) before recommending to the steward that Shadow be scratched. The steward decided to scratch Shadow.

EVIDENCE OBJECTIONS

“In granting or denying a motion for summary judgment or summary adjudication, the court need rule only on those objections to evidence that it deems material to its disposition of the motion.” (CCP § 437c(q).) The evidence to which the parties objected was not material to the disposition of this motion.

ANALYSIS

“The purpose of the law of summary judgment is to provide courts with a mechanism to cut through the parties' pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) Trial judges are required “to grant summary judgment if all the evidence submitted, and ‘all inferences reasonably deducible from the evidence’ and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.)

As to each claim as framed by the complaint, the defendant moving for summary judgment must satisfy the initial burden of proof by presenting facts to negate an essential element, or to establish a defense. (CCP § 437c(p)(2).) Once the defendant has met that burden, “the burden shifts to the plaintiff to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto.” (Id.)  To establish a triable issue of material fact, the party opposing the motion must produce “substantial responsive evidence.” (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 166.) Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)

Defendants move for summary judgment or, in the alternative, summary adjudication of Plaintiff’s causes of action.

A. Failure to Exhaust Administrative Remedies

            Defendants argue all of Plaintiff’s claims are barred because Plaintiff failed to exhaust administrative remedies. California courts have held that “where an administrative remedy is provided by statute, relief must be sought from the administrative body and this remedy exhausted before the courts will act.” (Abelleira v. Dist. Ct. of Appeal, Third Dist. (1941) 17 Cal.2d 280, 292.)

Defendants assert that Plaintiff was required to appeal the steward’s decision to scratch Shadow to the CHRB within 72 hours of the decision. Defendants cite to CHRB Rule 1761, which provides,

(a) From every decision of the stewards, except a decision concerning the disqualification of a horse due to a foul or a riding or driving infraction, an appeal may be made to the Board.

(b) Appeals shall be made in writing, stating the reason or reasons for the appeal, and shall be signed by the appellant, appellant's attorney, or appellant's representative. Appeals shall be received by a Board employee at any of its offices, not later than seventy-two (72) hours from the date of the decision of the stewards unless the Board for good cause extends the time for filing.

(c) An appeal shall not affect a decision of the stewards until the appeal has been sustained or dismissed or a stay order issued by the Chairman.

(4 CCR § 1761.)

Business & Professions Code § 19517 sets forth the CHRB Board’s authority to overrule a steward’s decision. It states, in pertinent part,

(a) The board, upon due consideration, may overrule any steward's decision other than a decision to disqualify a horse due to a foul or a riding or a driving infraction in a race, if a preponderance of the evidence indicates any of the following:

(1) The steward mistakenly interpreted the law.

(2) New evidence of a convincing nature is produced.

(3) The best interests of racing and the state may be better served.

(Bus. & Prof. Code § 19517(a).

Defendants argue that Plaintiff’s failure to appeal the steward’s decision bars the complaint. In opposition, Plaintiff contends that the doctrine of exhaustion of administrative remedies does not apply to this case.[1]

            Several cases address the issue of exhaustion of administrative remedies in the context of horse racing. Those cases include Youst v. Longo (1987) 43 Cal.3d 64; Horsemen's Benevolent & Protective Assn. v. Valley Racing Assn. (1992) 4 Cal.App.4th 1538; and Glen Hill Farm, LLC v. Cal. Horse Racing Bd. (2010) 189 Cal.App.4th 1296.

            Plaintiff relies on Youst and Horsemen’s to assert that Plaintiff was not required to exhaust administrative remedies before bringing this lawsuit for damages. Youst involved a dispute between a racehorse owner and a competing driver. The owner alleged the competing driver interfered with the owner’s horse during a race; the owner sued the driver for negligent and intentional interference with prospective economic damages. The driver argued that the owner was required to exhaust administrative remedies under the CHRB rules and statutes before filing the lawsuit. The driver cited general provisions that vested CHRB with power “necessary and proper to enable it to carry out fully and effectually the purposes of this chapter.” The California Supreme Court held that the owner was not required to exhaust administrative remedies because the broad CHRB rules cited by the driver are regulatory in nature and do not vest the power to award tort damages between private parties. (Youst, supra, 43 Cal.3d at 81-83.)

            In Horsemen’s, a horsemen’s association sued a racing association to enforce the parties’ purse agreement. The racing association argued that the horsemen’s association was required to exhaust administrative remedies with the CHRB, citing CHRB Rule 2043. That rule provides, “A complaint regarding any violation or alleged violation of any provision of an agreement between a horsemen's organization and a racing association may be filed with the Board by either of the contracting entities….The stewards or a referee may, after hearing the matters alleged, order compliance with the terms of the contract if within their authority to do so.” The Court of Appeal, relying on Youst, found that Rule 2043 did not confer authority on the CHRB to award contract damages, so the horseman’s association was not required to exhaust administrative remedies. (Horsemen’s, supra 4 Cal.App.4th at 1551-1554.)

            In Glen Hill, relied on by Defendants, the owner of a second-place horse sued the CHRB for declaratory relief, asserting that the first-place horse should have been disqualified and the purse redistributed because the winner’s trainer injected their horse with a banned substance. The CHRB argued the action was barred because the Plaintiff had failed to protest the outcome of the race to the stewards within 72 hours of the race, as required by Rule 1759. The Court of Appeal agreed, finding the plaintiff “could have protested to any stewards in session,” but failed to do so. (Glen Hill, supra 189 Cal.App.4th at 556.)

Defendants argue that this Court should follow Glen Hill. They emphasize that requiring exhaustion of administrative remedies “lighten[s] the burden of overworked courts when effective administrative remedies are available, (Duffy v. State Bd. of Equalization (1984) 152 Cal. App. 3d 1156, 1163); and give[s] administrative tribunals an opportunity to exercise judgment and discretion on matters within their area of expertise without prior judicial interference (Duea v. County of San Diego (2012) 204 Cal. App. 4th 691, 701–702).” (Defs’ Supplemental Brief at 3.)

            Here, Plaintiff alleges that Defendants breached a contract, and committed UCL violations and negligence, by scratching Shadow. Plaintiff seeks damages for this alleged wrong. Consistent with the case law and the relevant CHRB rules, the CHRB could not award money damages or the other relief sought in this lawsuit; exhaustion of administrative remedies was not required. Defendants do not provide authority showing the CHRB may award damages or that a party must appeal to the CHRB before filing suit for damages. Defendants have failed to meet their burden of establishing that Plaintiff’s claims are barred.

B. Qualified Immunity

            Defendants also argue Plaintiff’s claim are barred by the doctrine of qualified immunity. Defendants assert Dr. Stead is a quasi-public employee and is entitled to discretionary immunity. Discretionary immunity does not apply to the day-to-day decisions of public employees. (See e.g. Johnson v. State of California (1968) 9 Cal.2d 782, 796.)

C. Breach of Implied Contract

“The standard elements of a claim for breach of contract are: ‘(1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) damage to plaintiff therefrom.’” (Wall Street Network, Ltd. v. New York Times Co. (2008) 164 Cal.App.4th 1171, 1178.) “A cause of action for breach of implied contract has the same elements as does a cause of action for breach of contract, except that the promise is not expressed in words but is implied from the promisor’s conduct.” (Yari v. Producers Guild of America, Inc. (2008) 161 Cal.App.4th 172, 182.) 

Defendants assert that Plaintiff cannot state a cause of action for breach of implied contract because no implied contract exists. Plaintiff alleges that Defendants’ acceptance of Shadow’s nomination and entry into the race in exchange for Plaintiff’s entry fees created a contract under which Shadow would be permitted to participate in the race and Defendants would abide by CHRB Rule 1561. (TAC ¶ 50.) CHRB Rule 1561 sets forth the duties of the racing veterinarian, stating in pertinent part that “they shall examine any horse when there is a question as to the physical condition of such horse.” Plaintiff alleges that Defendants’ employee, veterinarian Dana Stead, did not comply with Rule 1561 by failing to examine Shadow before recommending that the horse be scratched.

Defendants present evidence that competitors, upon entry, are subject to the terms of the Santa Anita Park Entry Form. (UMF ¶ 7; Decl. Lym.) This form states that competitors agree to be bound by the acts and decisions of the CHRB and racing officials. (UMF ¶ 8.) CHRB Rule 1580 provides that entries are under the supervision of stewards, and the stewards may refuse the entry of any person. Defendants assert that they do not supervise entries and declarations. (UMF ¶ 15.) Defendants also argue there is no guarantee that all horses who are entered into a race may participate in the race. (UMF ¶ 12.)

This is insufficient to establish as a matter of law that no implied contract exists. Plaintiff’s complaint seeks redress for the acts of Plaintiff’s employee in failing to conduct an examination before recommending that the horse be scratched. That the parties agreed to be bound by the CHRB Rules and decisions does not negate these allegations.

D. Violation of Bus. & Prof. Code § 17200

California Business and Professions Code section 17200 prohibits “any unlawful, unfair or fraudulent business act or practice.” (Bus. & Prof. Code § 17200; see Clark v. Superior Court (2010) 50 Cal.4th 605, 610.)  

Defendants assert that the claim for UCL violations fails because Plaintiff’s cause of action for breach of contract fails. For the reasons discussed above, this argument fails.

E. Negligence

The elements for negligence are: (1) a legal duty owed to the plaintiff to use due care; (2) breach of duty; (3) causation; and (4) damage to the plaintiff. (County of Santa Clara v. Atlantic Richfield Co. (2006) 137 Cal.App.4th 292, 318.)  

Plaintiff alleges that Defendants owed a duty of care to Plaintiff, pursuant to CHRB Rule 1561, “to ensure that if SHADOW appeared to be under duress, that the horse be examined by the racing/track veterinarian, STEAD to confirm or deny the cursory diagnosis.” Defendants argue that Defendants did not breach this duty because Shadow was not fit to race. In opposition, Plaintiff asserts that, based on his observations, Shadow did not display any behavior that would indicate he was unfit to race. This is sufficient to create a triable issue of fact.

Defendants’ motion for summary judgment or summary adjudication is DENIED.