Judge: Michael E. Whitaker, Case: 21STCV38224, Date: 2022-10-24 Tentative Ruling

Case Number: 21STCV38224    Hearing Date: October 24, 2022    Dept: 32

PLEASE NOTE:   Parties are encouraged to meet and confer concerning this tentative ruling to determine if a resolution may be reached.  If the parties are unable to reach a resolution and a party intends to submit on this tentative ruling, the party must send an email to the Court at sscdept32@lacourt.org indicating that party’s intention to submit.  The email shall include the case number, date and time of the hearing, counsel’s contact information (if applicable), and the identity of the party submitting on this tentative ruling.  If the Court does not receive an email indicating the parties are submitting on this tentative ruling and there are no appearances at the hearing, the Court may place the motion off calendar or adopt the tentative ruling as the order of the Court.  If all parties do not submit on this tentative ruling, they should arrange to appear in-person or remotely (which is highly encouraged).  Further, after the Court has posted/issued a tentative ruling, the Court has the inherent authority to prohibit the withdrawal of the subject motion and adopt the tentative ruling as the order of the Court. 

TENTATIVE RULING

MOTION

Plaintiff Ashot Galstyan (Plaintiff) sued Defendants Omar Antonio Gonzalez; Absolute Transportation, Inc.; 3 LP Trucking Inc.; and Absolute Movers Inc. for negligence and violations of Labor Code sections 3706 and 3709.  Defendants Absolute Transportation, Inc.; 3 LP Trucking Inc.; and Absolute Movers Inc. (collectively, Moving Defendants) demur to the first and second causes of action in Plaintiff’s Complaint.  Plaintiff opposes the demurrer.  Moving Defendants reply.

ANALYSIS

1. DEMURRER

    

   “It is black letter law that a demurrer tests the legal sufficiency of the allegations in a complaint.”  (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.)  In ruling on a demurrer, the court must “liberally construe[]” the allegations of the complaint.  (Code Civ. Proc., § 452.)  “This rule of liberal construction means that the reviewing court draws inferences favorable to the plaintiff, not the defendant.”  (Perez v. Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1238.)   

1. INSUFFICIENT FACTS TO CONSTITUTE A CAUSE OF ACTION

    

   1. First Cause of Action  ¿  Negligence

       

      Moving Defendants demur to the first cause of action for negligence in the Complaint for failure to alleges facts sufficient to constitute a cause of action.  “The elements of a cause of action for negligence are well established. They are (a) a legal duty to use due care; (b) a breach of such legal duty; [and] (c) the breach as the proximate or legal cause of the resulting injury.” (Evan F. v. Hughson United Methodist Church (1992) 8 Cal.App.4th 828, 834 [cleaned up].) 

                 

                  Moving Defendants argue that Plaintiff has failed to properly plead a causal connection between the alleged negligence of Moving Defendants and Plaintiff’s injury. The Complaint alleges “Defendants negligently entrusted, managed, and maintained the vehicle operated by GONZALEZ on October 26, 2019.”  (Complaint, ¶ 32.)  However, as Moving Defendants note in the instant demurrer, Plaintiff fails to plead additional facts which indicate a relationship or connection between Defendant Gonzalez and Moving Defendants.  Because the allegation is a conclusion of law, the Court will not consider it when judging the sufficiency of the complaint. (C&H Foods Co. v. Hartford Ins. Co. (1984) 163 Cal.App.3d 1055, 1062.) 

       

      The Complaint additionally alleges Plaintiff’s injuries occurred while he was in the course and scope of his employment with Moving Defendants, and thus Moving Defendants “had a duty to provide insurance coverage to Plaintiff and to compensate Plaintiff for all of the injuries he sustained.” (Complaint, ¶ 33.)  However, Plaintiff fails to allege the causal connection between Moving Defendants’ failure to secure insurance coverage and Plaintiff’s physical and mental sustained injuries.  (Complaint, ¶ 34.)  Instead, Plaintiff again asserts a general legal conclusion: Plaintiff sustained damages “[a]s a direct and proximate cause of the negligence of Defendants.”  As is discussed above, the Court will not consider legal conclusions when judging the sufficiency of the complaint.  (C&H Foods Co. v. Hartford Ins. Co, supra, 163 Cal.App.3d at p. 1062.)

       

      In opposition, Plaintiff contends that due to Moving Defendants’ alleged failure to carry workers’ compensation insurance, Plaintiff does not need show that Moving Defendants were at fault for the underlying motor vehicle accident to sue them for injuries sustained from the accident which occurred during the course and scope of employment.  The Court acknowledges this is the case in a cause of action brought under Labor Code Section 3706. (See Valdez v. Himmelfarb (2006) 144 Cal.App.4th 1261, 1269-1270 [“As a general rule, an action brought under Labor Code section 3706 differs markedly from a common law negligence action”]; see also Hollingsworth v. Heavy Transport, Inc. (2021) 66 Cal.App.5th 1157, 1173.)  However, Plaintiff fails to advance authorities indicating this same presumption is applicable when asserting a common law negligence cause of action.   

       

   2. Second Cause of Action  ¿  Violations of Labor Code

       

      Moving Defendants demur to the second cause of action for violations of Labor Code Sections 3706 and 3709.  Moving Defendants argue that Labor Code Section 3706 is not an independent basis for a cause of action.  Moving Defendants are incorrect.

       

      “Labor Code section 3700 requires every employer to secure the payment of compensation in one or more of the following ways: (a) By being insured against liability to pay compensation by one or more insurers or (b) By securing from the Director of Industrial Relations, a certificate of consent to self-insure. Absent compliance with one of these alternatives an employee is not subject to the exclusive remedy of workers' compensation but may bring a claim before the [workers’ compensation appeals board] and a tort action against the uninsured employer.”  (Valdez v. Himmelfarb, supra, 144 Cal.App.4th at p. 1268 [cleaned up].)  The Court of Appeal further noted that “[i]n an action brought under Labor Code section 3706 an employer's liability is determined under rules of pleading and proof, which differ significantly from those of a common law personal injury action.  For that reason we conclude section 3706 creates a statutory cause of action for personal injuries . . . .”  (Ibid.) 

       

      Thus, the Court finds Plaintiff has properly alleged a cause of action for violations of Labor Code sections 3706 and 3709. 

       

   3. Alter Ego Liability

       

      Moving Defendants demur to the allegations of the Complaint on the grounds that Plaintiff has not stated sufficient facts to support allegations under an alter ego theory of liability.  The two general requirements for alter ego liability are: “(1) that there be such unity of interest and ownership that the separate personalities of the corporation and the individual no longer exist and (2) that, if the acts are treated as those of the corporation alone, an inequitable result will follow.”  (Mesler v. Bragg Mgmt. Co. (1985) 39 Cal.3d 290, 300 (hereafter Mesler).)   

       

      The Complaint alleges payment for Plaintiff’s work for Defendant Absolute Transportation was “made to Plaintiff by various entities including Defendants ABSOLUTE TRANSPORTATION, 3 LP, ABSOLUTE MOVERS.” (Complaint ¶ 13.)  The Complaint further pleads Moving Defendants “are alter egos of one another and are using their separate corporate form as a mere shell, instrumentality, or conduit for a single venture.” (Complaint ¶ 14.)

       

      Here, Moving Defendants rely upon case authorities which address claims of alter ego liability under circumstances unrelated to the procedural process of a demurrer.  The case authorities are inappositely applied to the pleading requirements to state a cause of action against individual defendants on an alter ego theory and thus do not control. 

       

      In a complaint, a plaintiff need only allege ultimate facts, not evidentiary facts.  (Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550.)  While Plaintiff will be required to prove his alter ego allegations with evidence at a later stage of the proceedings, such as at trial, these allegations of ultimate fact are sufficient to “set forth the essential facts of the case with reasonable precision and with sufficient particularity” to acquaint the Moving Defendants with “the nature, source and extent of his cause of action.”  (Rannard v. Lockheed Aircraft Corp. (1945) 26 Cal.2d 149, 156-157.) 

       

      CONCLUSION AND ORDER

       

      Therefore, the Court sustains Moving Defendants’ demurrer to the first cause of action with leave to amend, and overrules Moving Defendants’ demurrer as to the second cause of action.  Plaintiff shall file and serve an amended complaint within 20 days of notice of the Court’s rulings.

       

      Moving Defendants shall provide notice of the Court’s rulings and file a proof of service of such.