Krystal Merlin v. Mania Topanga Mall, LLC, et al.

DEMURRER TO FIRST AMENDED COMPLAINT

 

MOVING PARTY: Defendant Mania Topanga Mall, LLC

RESPONDING PARTY(S): Plaintiff Krystal Merlin

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

Plaintiff Krystal Merlin brings this action against Defendants Mania Topanga Mall, LLC, Elior Perez, and Moar Ben Shimol for violations of FEHA and the Labor Code. Plaintiff alleges Defendants demoted Plaintiff from her role as shift manager after she complained of harassing conduct by Defendant Shimol. Plaintiff was later terminated, which Defendants attributed to the Covid-19 pandemic. Plaintiff now brings causes of action for (1) FEHA Disparate Treatment Discrimination, (2) FEHA Quid Pro Quo Sexual Harassment, (3) FEHA Work Environment Harassment, (4) FEHA Retaliation, (5) FEHA Failure to Prevent Harassment, Discrimination, or Retaliation, and (6) Labor Code 1102.5 retaliation. 

Defendant Mania Topanga Mall now demurrers to each cause of action in the FAC.  Plaintiff opposed. 

TENTATIVE RULING:

Defendant’s Demurrer to the First Amended Complaint is OVERRULED in its entirety. 

Defendant is ordered to file an Answer only to the FAC within 21 days.

Moving party to give notice.

DISCUSSION:

Demurrer to First Amended Complaint

I. Meet and Confer

The Declaration of attorney Casey Daggett reflects that the parties met and conferred.

II. Judicial Notice

Pursuant to Defendant’s request, the court takes judicial notice of Defendant’s Exhibit B.

Pursuant to Plaintiff’s request, the court takes judicial notice of Plaintiff’s Exhibit A.

The court takes judicial notice of the Exhibits without assuming the truth of the assertions contained therein. (Evid. Code, § 452, subd. (h); Seelig v. Infinity Broad. Corp. (2002) 97 Cal. App. 4th 798, 808.)

III. Legal Standard

A demurrer for sufficiency tests whether the complaint states a cause of action.  (Hahn v. Mirda (2007) 147 Cal. App. 4th 740, 747.)  When considering demurrers, 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.)  In a demurrer proceeding, the defects must be apparent on the face of the pleading or by proper judicial notice.  (CCP § 430.30(a).)  A demurrer tests the pleadings alone and not the evidence or other extrinsic matters.  (SKF Farms v. Superior Court (1984) 153 Cal. App. 3d 902, 905.)  Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed.  (Id.)  The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.  (Hahn, 147 Cal.App.4th at 747.)  

IV. Analysis

Defendant demurrers to each cause of action in the First Amended Complaint. Each is addressed in turn.

A. Demurrer to First, Fourth, and Fifth Causes of Action Because Moving Defendant Was Not An “Employer” Under FEHA

First, Defendant MTM argues Plaintiff’s First, Fourth, and Fifth Causes of Action under FEHA must fail because MTM does not meet the definition of an “employer.” Under FEHA, employer “includes any person regularly employing five or more persons.” (Gov. Code 12926(d).)  Defendant presents a copy of its quarterly income tax reports during the time Plaintiff worked at Defendant. (D’s RJN, Exh. B.) Defendant argues the reports establish that MTM employed four or less employees at all relevant times.

In opposition, Plaintiff counters that Plaintiff’s argument is a “premature attempt to adjudicate evidence,” and that the court must accept her employer allegation as true at this stage. (Opp. 4: 7.) 

Plaintiff alleges that MTM was her employer. (FAC ¶ 91.) Plaintiff worked for Defendant from August 2019 to March 2020. (Id. ¶¶ 16, 28.) Defendant’s quarterly federal income tax returns show that the “number of employees who received wages, tips, or other compensation for the pay period[s]” Plaintiff worked at Defendant did not exceed 4. (See D’s RJN, Exh. B.) This raises the issue of whether Defendant’s tax returns purporting to show less than five employees for tax purposes is incontrovertible evidence of its number of employees. 

In ruling on a demurrer, a court may consider facts of which it has taken judicial notice. (§ 430.30, subd. (a).) “A court may take judicial notice of something that cannot reasonably be controverted, even if it negates an express allegation of the pleading.” (Poseidon Dev., Inc. v. Woodland Lane Ests., LLC (2007) 152 Cal. App. 4th 1106, 1117.) But “[a] court ruling on a demurrer ... cannot take judicial notice of the proper interpretation of a document submitted in support of the demurrer. [Citation]. In short, a court cannot by means of judicial notice convert a demurrer into an incomplete evidentiary hearing in which the demurring party can present documentary evidence and the opposing party is bound by what that evidence appears to show.” (New Livable California v. Ass'n of Bay Area Governments (2020) 59 Cal. App. 5th 709, 716.) “Consequently, ‘judicial notice of matters upon demurrer will be dispositive only in those instances where there is not or cannot be a factual dispute concerning that which is sought to be judicially noticed.’” (Panterra GP, Inc. v. Superior Ct. of Kern Cnty. (2022) 74 Cal. App. 5th 697, 710–11.)

Here, there is a factual dispute regarding the number of Defendant’s employees. Defendant cites no authority suggesting the numbers reflected in its quarterly tax reports are conclusive evidence of same, at least for FEHA purposes. Determining whether Defendant employed five or more employees will require fact-finding that cannot be resolved when ruling on this demurrer.  Thus, for pleadings purposes, the court accepts as true Plaintiff’s allegation that Defendant qualifies as an employer under FEHA. 

Accordingly, Defendant’s Demurrer to the First, Fourth, and Fifth Causes of Action is OVERRULED.

B. Demurrer to Second Cause of Action for Quid Pro Quo Sexual Harassment and Third Cause of Action for Work Environment Harassment

Next, Defendant argues Plaintiff has failed to allege facts sufficient to constitute sexual harassment. Defendant contends that Plaintiff “never alleges that she received any sexual requests, nor that she was subject to any sexual advances.” (Dem. 4: 11-12.) 

“Courts have generally recognized two distinct categories of sexual harassment claims: quid pro quo and hostile work environment. Quid pro quo harassment occurs when submission to sexual conduct is made a condition of concrete employment benefits.” (Fisher v. San Pedro Peninsula Hospital (1989) 214 Cal.App.3d 590, 607, internal citation omitted.) “A cause of action for quid pro quo harassment involves the behavior most commonly regarded as sexual harassment, including, e.g., sexual propositions, unwarranted graphic discussion of sexual acts, and commentary on the employee’s body and the sexual uses to which it could be put. To state a cause of action on this theory, 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, internal citations omitted.)

As to hostile work environment sexual harassment, “the adjudicator’s inquiry should center, dominantly, on whether the discriminatory conduct has unreasonably interfered with the plaintiff’s work performance. To show such interference, ‘the plaintiff need not prove that his or her tangible productivity has declined as a result of the harassment.’ It suffices to prove that a reasonable person subjected to the discriminatory conduct would find, as the plaintiff did, that the harassment so altered working conditions as to ‘make it more difficult to do the job.’ ” (Harris v. Forklift Sys. (1993) 510 U.S. 17, 25, conc. opn. of Ginsburg, J.; see Gov. Code, § 12923(a) endorsing this language as reflective of California law.) “To establish a prima facie case of a hostile work environment, [the plaintiff] must show that (1) [plaintiff] is a member of a protected class; (2) [plaintiff] was subjected to unwelcome harassment; (3) the harassment was based on [plaintiff’s] protected status; (4) the harassment unreasonably interfered with [plaintiff’s] work performance by creating an intimidating, hostile, or offensive work environment; and (5) defendants are liable for the harassment.” (Ortiz v. Dameron Hospital Assn. (2019) 37 Cal.App.5th 568, 581.)

Plaintiff alleges her supervisor, Defendant Shimol, “would speak inappropriately to [Plaintiff] including openly discussing his sexual conquests.” (FAC ¶ 19.) Plaintiff was “disgusted and offended” by Shimol’s statements and would “try to make [him] stop.” (Id. ¶ 20.) 

In January 2020, Shimol allegedly “propositioned [Plaintiff] to marry him for his immigration paperwork,” and offered her $300 per month to do so. (Id. ¶¶ 22, 23.) Initially, Plaintiff “polite[ly]” refused “for fear that [Shimol] would reduce her hours.” (Id. ¶ 23.) But Shimol “insisted and continued to proposition Plaintiff with various methods of persuasion,” which included “continuously discuss[ing] sex and brag[ging] about his own sex life to [Plaintiff].” (Id.)

Plaintiff alleges that Shimol “tried to bribe” her with additional working hours if she would agree to marry him. (Id. ¶ 24.) After refusing these advances, Plaintiff alleges “Defendants demoted [her] from her position as Shift Manager,” which included an hourly pay reduction. (Id. ¶ 26.)

Considering these allegations, Plaintiff has alleged each category of sexual harassment. As to quid pro quo harassment, Plaintiff alleges Defendant made her working hours conditional on her agreement to marry Defendant Shimol. While doing so, Defendant Shimol allegedly made sexual references to persuade Plaintiff. Relatedly, as to hostile work environment sexual harassment, Plaintiff alleges ongoing sexual harassment from Shimol because she was an unmarried woman. 

Accordingly, Defendant’s Demurrer to the Second and Third Causes of Action is OVERRULED.

C. Demurrer to Sixth Cause of Action for Labor Code § 1102.5 Retaliation

Finally, Defendant argues Plaintiff’s claim for retaliation under Labor Code section 1102.5 fails because (1) she did not disclose a violation of local, state, or federal law, and (2) did not report same to a government or law agency. 

Labor Code section 1102.5 provides whistleblower protections to employees who disclose wrongdoing to authorities. It prohibits an employer from retaliating against an employee for sharing information the employee “has reasonable cause to believe ... discloses a violation of state or federal statute” or of “a local, state, or federal rule or regulation” with a government agency, with a person with authority over the employee, or with another employee who has authority to investigate or correct the violation. (§ 1102.5, subd. (b).) “This provision,” the Supreme Court of California has explained, “reflects the broad public policy interest in encouraging workplace whistle-blowers to report unlawful acts without fearing retaliation.” (Green v. Ralee Engineering Co. (1998) 19 Cal.4th 66, 77.)

A claim for violation of Labor Code section 1102.5 requires “(1) the plaintiff establish a prima facie case of retaliation, (2) the defendant provide a legitimate, nonretaliatory explanation for its acts, and (3) the plaintiff show this explanation is merely a pretext for the retaliation. [Citations.] To establish the first element, the plaintiff must show (1) the plaintiff engaged in protected activity, (2) the defendant subjected the plaintiff to an adverse employment action, and (3) there is a causal link between the two.” (Ross v. Cnty. of Riverside (2019) 36 Cal. App. 5th 580, 591–92.)

First, under section 1102.5, Plaintiff must only allege that she made a complaint to a person “with authority over” her “who has the authority to investigate, discover, or correct the violation or noncompliance.” (Labor Code § 1105.2(b).) She need not have made a complaint to a government or law enforcement agency. (See id.)

Plaintiff alleges she made “numerous verbal complaints about [Shimol’s] harassing conduct and illegal propositions to Mr. Elior Perez who Plaintiff is informed and believes to be the owner and registered agent of the entity Defendant and supervisor of Mr. Shimol.” (Id. ¶ 25.) Plaintiff had reasonable cause to believe she was disclosing a violation of state or federal statute based on Defendant Shimol’s harassing conduct. Accordingly, Plaintiff has stated a cause of action for Labor Code retaliation.

Accordingly, Defendant’s Demurrer to the Sixth Cause of Action is OVERRULED.

IT IS SO ORDERED.

Dated:   October 9, 2023 ___________________________________