Judge: Michael Shultz, Case: 24STCV5169, Date: 2025-01-31 Tentative Ruling

DEPARTMENT 40 - MICHAEL J. SHULTZ  - LAW AND MOTION RULINGS
The Court issues tentative rulings on certain motions.The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) email Dept 40 by 8:30 a.m. on the day of the hearing (smcdept40@lacourt.org) with a copy to the other party(ies) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no email is necessary and all parties should appear at the hearing in person or by Court Call. 



Case Number: 24STCV5169    Hearing Date: January 31, 2025    Dept: 40

24STCV5169 Abigail Beckett v. The Big Fix, LLC, dba The Craftsman Bar & Kitchen, et al.  

Friday, January 31, 2025

 

[TENTATIVE] ORDER OVERRULING DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT BY DEFENDANT, JOHN GRONDORF

[TENTATIVE] ORDER DENYING MOTION TO STRIKE PORTIONS OF PLAINTIFF’S FIRST AMENDED COMPLAINT BY DEFENDANT, JOHN GRONDORF

 

                                                                                              I.         BACKGROUND

      The first amended complaint (“FAC”) alleges that Defendant, The Big Fix (“Big Fix”), employed Plaintiff in August 2022 as a server for Craftsman Bar and Kitchen (“Craftsman”) alleged to be a dba of Big Fix. Defendant, John Grondorf (“Grondorf”) is alleged to be an owner and member of Big Fix and Restaurant manager of Craftsman. Plaintiff alleges that Big Fix is the alter ego of and controlled by Grondorf. Plaintiff alleges she was subject to sexual harassment by Grondorf and employees of Big Fix, which Plaintiff reported. Plaintiff alleges she was constructively terminated on April 9, 2023, in retaliation for her complaints. Plaintiff alleges the following tort claims and claims in violation of the Fair Employment & Housing Act (“FEHA”), and the Unruh Civil Rights Act:

1.     Sexual battery

2.     Sexual harassment

3.     Constructive discharge

4.     Failure to prevent harassment

5.     Retaliation

6.     Whistle-Blower Retaliation

7.     Unruh Civil Rights violations

8.     Negligent hiring, supervision, and/or retention

9.     Aiding and abetting

 

                                                                                               II.        ARGUMENTS

      Grondorf demurs to three of the nine causes of action alleged on grounds he is not liable for any sexual harassment because he did not commit any of the alleged wrongful acts, nor did he employ any of the Plaintiff’s co-employees, and therefore, bears no liability for their wrongful conduct.

      Grondorf separately moves to strike the alter ego and conspiracy allegations and the prayer for punitive damages as the allegations are insufficient to support the first two theories of liability, and the FAC does not support recovery of punitive damages.

      In opposition, Plaintiff argues that the authority on which Grondorf relies does not apply because Plaintiff does not allege Grondorf is a “second-tier” manager, but rather an owner and restaurant manager.  Grondorf improperly introduces new facts not contained in the pleading but rather disputes pleaded facts which must be accepted as true. Grondorf is an “employer” and is liable under FEHA. Plaintiff also alleges Grondorf participated in the misconduct. The alleged facts support all elements of the claim. Discovery may reveal other theories of liability which supports denying leave and supports not dismissing the action.

      Plaintiff argues that if the court is inclined to sustain demurrer, Plaintiff will propose attaching a copy of an unsolicited email from a retired judge describing Grondorf’s business practices. The court should order that an amended pleading does not open up the defaults already entered against individual defendants.

      Plaintiff opposes the motion to strike on grounds the alter ego allegations are sufficient and must be accepted as true. Grondorf is directly liable for his own misconduct. Punitive damages are properly pled and are appropriate.

      In reply to Plaintiff’s oppositions to both motions, Grondorf disputes the allegation that he engaged in any sexual harassment and contends he did not employ plaintiff. Even if he did, an owner and or shareholder of an employer is not an “employer” under FEHA. The motion to strike should be granted.  

                                                                                       III.       LEGAL STANDARDS

      A demurrer tests the sufficiency of a complaint as a matter of law and raises only questions of law. (Schmidt v. Foundation Health (1995) 35 Cal.App.4th 1702, 1706.) In testing the complaint’s sufficiency, the court must assume the truth of the properly pleaded factual allegations as well as facts that can be reasonably inferred from those expressly pleaded facts. The court may also consider matters properly subject to judicial notice. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

      The court may not consider contentions, deductions, or conclusions of fact or law. (Moore v. Conliffe (1994) 7 Cal.4th 634, 638.) Plaintiff is required to allege facts sufficient to establish every element of each cause of action. (Rakestraw v. California Physicians Service (2000) 81 Cal.App.4th 39, 43.) Where the complaint fails to state facts sufficient to constitute a cause of action, courts should sustain the demurrer. Code Civ. Proc., § 430.10(e); Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126.)

      Sufficient facts are the essential facts of the case “with reasonable precision and with particularity that is sufficiently specific to acquaint the defendant with the nature, source, and extent of his cause of action.” (Gressley v. Williams (1961) 193 Cal.App.2d 636, 643-644.)  Whether the Plaintiff will be able to prove the pleaded facts is irrelevant. (Stevens v. Superior Court (1986) 180 Cal.App.3d 605, 609–610.)

      A demurrer may also be sustained if a complaint is “uncertain.” Uncertainty exists where a complaint’s factual allegations are so confusing, they do not sufficiently apprise a defendant of the issues it is being asked to meet. (Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2; Code Civ. Proc., § 430.10(f).)

      A pleading is required to assert general allegations of ultimate fact. Evidentiary facts are not required. (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal. 4th 26, 47; Lim v. The.TV Corp. Internat. (2002) 99 Cal. App. 4th 684, 690.) However, unlike federal courts, California state courts are not a notice pleading jurisdiction, and notice alone is not a sufficient basis for any pleading. California is a fact pleading jurisdiction. Merely putting an opposing party on notice is not sufficient. (Bach v. County of Butte (1983) 147 Cal.App.3d 554, 561; see Diodes, Inc. v. Franzen (1968) 260 Cal.App.2d 244, 250.)

      A motion to strike is limited to matters that appear on the face of the pleading or on any matter of which the court can take judicial notice. (Code Civ. Proc., § 437.) The court may strike out any irrelevant, false, or improper matter inserted in any pleading; or strike all or any part of the pleading not drawn or filed in conformity with the laws of California, a court rule, or an order of the court. (Code Civ. Proc. §436 subd. (a)-(b).)

                                                                                                IV.       DISCUSSION

A.     Demurrer to the second cause of action for sexual harassment in violation of FEHA is OVERRULED.

The ”fundamental foundation” for FEHA liability is the existence of an employment relationship between the parties. (McCoy v. Pacific Maritime Assn. (2013) 216 Cal.App.4th 283, 301.) In establishing whether a person is liable there must be a reasonable inference that can be drawn from the alleged facts to support the type of relationship covered by the statute.” (Judd v. Weinstein (9th Cir. 2020) 967 F.3d 952, 958 [“A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged."].)

The FAC alleges that Grondorf is an Owner and Member of Defendant, Big Fix, a dba of Craftsman as well as restaurant manager of Craftsman (FAC ¶¶ 1-2). Plaintiff alleges she was an employee of Big Fix and Grondorf. (FAC ¶ 3.) Plaintiff alleges Grondorf’s liability as an alter ego of Big Fix.

Plaintiff alleges that Grondorf “participated in and approved” other employees’ sexual misconduct “by laughing along with these Defendants as they made coarse, off-color, sexual comments about Plaintiff’s breasts and buttocks.” (FAC, ¶ 31.) Accordingly, Grondorf’s liability here is direct as an actual participant. (Gov. Code, § 12940 subd (j) [It is an unlawful employment practice for an employer to harass an employee.].)

An employer is also liable for harassment by a non-supervisor employee  if the employer “knows or should have known of the conduct and fails to take immediate and appropriate corrective action.” (Gov. Code, § 12940 subd. (j)(1).)  Plaintiff alleges that other employees who engaged in physical and unwanted touching were the bouncer and kitchen staff.  (FAC, ¶¶ 21, 24.) Plaintiff alleges she reported the incidents to Grondorf who claimed another employee denied the incidents although Grondorf allegedly reviewed surveillance footage that recorded one alleged interaction. (FAC, ¶ 23.) Grondorf protected his cooks, told employees to leave them alone, and to refrain from complaining about them. (FAC, ¶ 28.) Plaintiff alleges Grondorf refused to discipline the cooks, and displayed a callous attitude toward female employees, disregarded their complaints, and showed willingness to go along and participate in the verbal sexual harassment of Plaintiff and others. (FAC, ¶ 32.)

Plaintiff alleges Grondorf is also the restaurant manager of Craftsman, Big Fix’s dba. (FAC, ¶ 2.) Agents or supervisors of employers are liable for sexual harassment of employees if the agent or supervisor "knows or should have known of the conduct and fails to take immediate and appropriate corrective action. " (Gov. Code, § 12940 subd. (j)(1); Fiol v. Doellstedt (1996) 50 Cal.App.4th 1318, 1328, [“Under section 12940, subdivision (h)(3)(A), any person acting as an agent of the employer is an employer for purposes of the FEHA.”].)

Even if the alter ego allegations are discounted, Plaintiff has alleged other bases for liability against Grondorf. Grondorf’s denial of these allegations are extrinsic to the complaint and irrelevant, because the court accepts the alleged facts as true for purposes of a demurrer.

B.     Demurrer to the eighth cause of action for negligent hiring/supervision, and/or retention is OVERRULED.

 

      An employer can be liable to a third person for negligently hiring, supervising, or retaining an unfit employee if the employer knew or should have known that hiring the employee created a particular risk or hazard and that particular harm materializes. (Doe v. Capital Cities (1996) 50 Cal.App.4th 1038, 1054.) Grondorf denies being Plaintiff’s employer, and therefore, he cannot be liable for negligent supervision. Grondorf argues that it is undisputed that he did not employ Plaintiff; she was employed by Craftsman. (Dem. 6:4.)  Plaintiff alleges she was employed by Big Fix dba Craftsman (FAC, ¶ 19.) Big Fix is Grondorf’s alter ego. (FAC, ¶ 1.) And as previously discussed, agents are employers for purposes of FEHA. Plaintiff has adequately alleged liability against Grondorf for this claim.  

C.     Demurrer to the ninth cause of action for aiding and abetting is OVERRULED.

      While Defendant’s notice includes demurrer to the ninth cause of action, the points and authorities do not assert a basis for demurrer.

D.     Motion to strike

1)     The alter ego allegations are well pled.

      Liability based on an alter ego theory is not itself a claim for substantive relief, but rather a procedural claim “to disregard the corporate entity as a distinct defendant and to hold the alter ego individuals liable on the obligations of the corporation where the corporate form is being used by the individuals to escape personal liability, sanction a fraud, or promote injustice." (Hennessey's Tavern, Inc. v. American Air Filter Co. (1988) 204 Cal.App.3d 1351, 1359.)

      The procedural claim does not require specific factual allegations in order to raise the issue as it is not a substantive claim for relief." (Id. at 1358.) It can be raised affirmatively in the complaint or negatively in the answer. (Id.) Even when not affirmatively alleged, the issue may be resolved at trial, or at a separate hearing to determine the true identity of the judgment debtor. (Id.; (Los Angeles Cemetery Ass'n v. Superior Court of Los Angeles County (1968) 268 Cal.App.2d 492, 494, [  "… still it is the law of California that that issue may be raised by a simple allegation that the defendant sought to be charged had made the contract involved [citation omitted]. Had petitioner elected to proceed by such a conclusionary but permissible allegation, its right thereafter to seek by discovery the facts by which that allegation might be proved would have been beyond question.”].)  Additionally, Plaintiff can allege alter ego in a conclusory fashion. (Id.)

      Other case authority supports that two general requirements must exist in order to pursue an alter ego theory. There must be “such a unity of interest and ownership between the corporation and its equitable owner that the separate personalities of the corporation and the shareholder do not in reality exist. Second, there must be an inequitable result if the acts in question are treated as those of the corporation alone.” (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538, 99 Cal.Rptr.2d 824; Shaoxing County Huayue Import & Export v. Bhaumik (2011) 191 Cal.App.4th 1189, 1198.)

      The theory of alter ego and facts supporting its application are alleged in 16 paragraphs of the FAC. In sum, Plaintiffs allege that Big Fix is undercapitalized, is an instrumentality and conduit of Grondorf’s pursuit of plans to open restaurants and bars, Grondorf uses his assets and resources to transact Big Fix business, and Big Fix does not observe corporate formalities, among other factors, none of which are required to be alleged, but are considered relevant factors to consider when determining whether the theory should be applied. (Cam-Carson, LLC v. Carson Reclamation Authority (2022) 82 Cal.App.5th 535, 550.)

      Plaintiff also alleges there is a unity of interest and ownership between Grondorf and Big Fix and that adherence to the fiction of separateness would permit an abuse of the corporate privilege, sanction fraud, and promote injustice.  (FAC, ¶ 11.A through 11.P.)

2)     The prayer for punitive damages is supported by the specific facts alleged.

      A plaintiff may recover on a claim for exemplary damages where the defendant is guilty of oppression, fraud, or malice. (Civ. Code, § 3294 subd. (a).) The predicate acts to support the claim must be intended to cause injury or must constitute “malicious” or “oppressive” conduct as defined by statute. “Malice” is defined as “conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.” (Civ. Code, § 3294 subd. (c)(1); College Hospital Inc. v. Superior Court (1994) 8 Cal.4th 704, 725 ["malice involves awareness of dangerous consequences and a willful and deliberate failure to avoid them"].) "Oppression" is defined as “despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights.” (Civ. Code, § 3294 subd. (a) subd. (c)(2).)

      The specific allegations described in the court’s ruling on demurrer establish in sum that Grondorf knew of the harassment, participated in and approved of the harassment, protected the alleged perpetrators, laughed at Plaintiff, failed to address her complaints, refused to discipline the alleged perpetrators, and ultimately retaliated against her by cutting Plaintiff’s hours and taking away her work shifts causing Plaintiff to lose income. (FAC ¶¶ 28, 29, 31, 85.)     

      These facts may support a finding that the conduct was despicable, intended to cause injury, and/or carried out with a conscious disregard of Plaintiff’s rights or safety.

                                                                                               V.        CONCLUSION

      Based on the foregoing, demurrer to Plaintiff’s first amended complaint is OVERRULED. The motion to strike is DENIED. Defendant is ordered to answer within 30 days.