Judge: Robert S. Draper, Case: 22STCV24483, Date: 2023-03-20 Tentative Ruling

Case Number: 22STCV24483    Hearing Date: March 20, 2023    Dept: 78

Superior Court of California

County of Los Angeles

Department 78

Defendant Kostiv & Associates, P.C.’s Demurrer is OVERRULED as moot.

Defendant Kostiv & Associates, P.C.’s Motion to Strike is DENIED.

FACTUAL BACKGROUND

This is an employment whistleblower action. The operative First Amended Complaint (“FAC”) alleges as follows.

Plaintiff Caesar Montoya (“Plaintiff”) was employed by Defendant Kostiv & Associates (“Defendant”) from August 2018 to July 30, 2021 as the Firm’s in-house General Counsel. (FAC ¶ 10.) Near the end of 2018, Plaintiff discovered that Defendant was paying a few employees under the table to avoid payroll taxes. (FAC ¶ 13.) Plaintiff complained about the labor violations to Defendant’s agent. (Ibid.) Additionally, Plaintiff discovered that a non-lawyer was improperly handling clients’ claims. (FAC ¶ 14.) Again, he complained to Defendant. (Ibid.)

Petro Kostiv (“Kostiv”), Defendant’s founder, would come to work intoxicated, get angry at employees, and act inappropriately. (FAC ¶ 16.) When Plaintiff confronted Kostiv about this behavior, as well as the illegal activity, Kostiv called Plaintiff a “pussy”. (Ibid.)

Additionally, Plaintiff complained about Defendant’s illegal installation of security cameras in the firm’s conference room. (FAC ¶ 18.) When Plaintiff reported this issue, Defendant began to retaliate against him. (Ibid.)

On July 30, 2021, Plaintiff was terminated for abusing Defendant’s client. (FAC ¶ 22.) Plaintiff alleges that this reason was pretextual, and that he was actually fired for repeatedly raising concerns about illegal and unethical behavior. (Ibid.)

PROCEDURAL HISTORY

On July 29, 2022, Plaintiff filed the Complaint asserting five causes of action:

1.    Whistleblower Retaliation in Violation of Labor Code § 1102.5;

2.    Invasion of Privacy in Violation of California Penal Code § 632;

3.    Violation of California Penal Code § 632.7;

4.    Wrongful Termination in Violation of Public Policy; and,

5.    Intentional Infliction of Emotional Distress.

On September 27, 2022, Defendant filed a Demurrer to the Complaint.

On November 22, 2022, the Court sustained the Demurrer as to the Fifth Cause of Action and granted the Motion to Strike as to the prayer for attorney’s fees only. The Court granted Plaintiff thirty days leave to amend.

On December 22, 2022, Plaintiff filed the operative First Amended Complaint asserting the same five causes of action.

On February 21, 2023, Plaintiff dismissed the Fifth Cause of Action for Intentional Infliction of Emotional Distress.

On February 22, 2023, Defendant filed the instant Demurrer and Motion to Strike.

On March 7, 2023, Plaintiff filed an Opposition.

As of March 16, 2023, no Reply has been filed. Any Reply was due by March 13, 2023.

DISCUSSION

I.                DEMURRER

Defendant demurs to the Fifth Cause of Action for Intentional Infliction of Emotional Distress. However, as that Cause of Action was dismissed on February 21, 2023, Defendant’s Demurrer to the First Amended Complaint is OVERRULED as moot.

II.              MOTION TO STRIKE

Defendant moves to strike several portions of the First Amended Complaint.

The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading. (Code Civ. Proc., § 436(a).) The court may also strike all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. (Id., § 436(b).) The grounds for a motion to strike are that the pleading has irrelevant, false or improper matter, or has not been drawn or filed in conformity with laws. (Id. § 436.) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Id. § 437.) 

Here, Defendant moves to strike references to Labor Code section 1102.5 from the Complaint, and references to non-party Diego Gonzalez

A.   Labor Code section 1102.5

First, Defendant moves to strike several references to Defendant’s alleged violation of Labor Code section 1102.5 from the Complaint, contending that their addition exceeds the limited scope of amendment the Court granted Plaintiff following its ruling on the Demurrer to the Complaint.

However, as Plaintiff notes in Opposition, the Court also granted Plaintiff leave to amend to support his prayer for punitive damages. Labor Code section 1102.5(j) allows the Court to “award reasonable attorney’s fees to a plaintiff who brings a successful action for a violation of these provisions.” 

Accordingly, Plaintiff’s addition of allegations pertaining to Labor Code section 1102.5 are permitted by the Court’s granting of leave to amend to substantiate his prayer for attorney’s fees.

Defendant’s Motion to Strike is DENIED on this ground.

B.   References to Diego Gonzalez

Next, Defendant moves to strike any reference to its former employee, Diego Gonzalez. Defendant argues that “Defendant cannot respond to a former employer that is no longer with the firm.”

However, the First Amended Complaint refers to Gonzalez because Plaintiff reported the alleged labor violations to Gonzalez while Gonzalez was Defendant’s employee. As Plaintiff alleges whistleblower violations, that he reported the violations to Defendant’s agent is necessary for his claim.

Defendant cites no authority stating that an employer bears no liability or responsibility for its former employee’s actions that occurred while that employee was an agent for the employer.

Accordingly, Defendant’s Motion to Strike is DENIED on this ground.

DATED: March 20, 2023

__________________________

Hon. Robert S. Draper

Judge of the Superior Court