Judge: Ronald F. Frank, Case: 22TRCV01070, Date: 2023-02-07 Tentative Ruling
Case Number: 22TRCV01070 Hearing Date: February 7, 2023 Dept: 8
Tentative Ruling¿
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HEARING DATE: February 7, 2023¿¿
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CASE NUMBER: 22TRCV01070
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CASE NAME: Persona310 v.
City of Hawthorne Business License Dept.
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MOVING PARTY: Defendant, City of Hawthorne
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RESPONDING PARTY: Plaintiff,
Persona310
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TRIAL DATE: None set¿
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MOTION:¿ (1) Demurrer¿to First Amended Complaint
(2)
Motion to Strike portions of First Amended Complaint
(3)
Multiple Requests for Judicial Notice
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Tentative Rulings: (1) Sustained, with leave to
amend the Contract claim only
(2)
Granted
(3) Rulings on each Request are in the body of this
Tentative
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Overview:
Plaintiff’s lawsuit, now on its amended complaint,
essentially seeks monetary damages from the City for a lengthy delay in
processing applications for a business license.
Many, if not most- public agencies around the country have faced delays
in everything from construction permits to city inspector visits to receiving trial
dates in court cases, as a hangover from the COIVD pandemic. While Plaintiff is understandably frustrated with
the delays, public entities have legal protections from being sued for things
like delays in completing discretionary and ministerial responsibilities or for
allegedly making a misrepresentation to a member of the public. In the
absence of proof or allegation of a specific mandatory duty under state,
federal, or local law that the City of Hawthorne has violated, plaintiff’s suit
faces an uphill battle. As currently alleged,
the suit is unclear on exactly what the purported contract’s terms were, because
an application with an application fee does not create an accepted contract. Over 50% of applicants for admission to competitive
state universities can attest that such allegations do not give rise to a
contract of an accepted application. The
tort of intentional infliction of emotional distress is not suited to a business
applying for a license; rather, such cases are reserved for conduct that is so
extreme that it is beyond what persons in a civilized society can be expected
to endure such as racial epithets or disturbing the remains of a corpse. Public agencies cannot be sued for punitive damages
so the motion to strike the punitive damages allegations will be granted. Further,
if the exhibits attached to the moving papers are genuine and Plaintiff has now
been granted the permits sought, what remains of Plaintiff’s claims might more
properly be pursued in limited jurisdiction or small claims court.
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I. BACKGROUND¿¿
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A. Factual¿¿
On November 2, 2022, Plaintiff
Persona310 (“Plaintiff”) filed this action against Defendant, City of Hawthorne (“Defendant”). On December 16, 2022,
Plaintiff filed its First Amended Complaint (“FAC”) alleging causes of action
for: (1) Breach of Contract; (2) Intentional Infliction of Emotional Distress;
and (3) Fraud. Defendant filed a
demurrer and motion to strike the original complaint as well, but Plaintiff amended
the original complaint.
Defendant
now demurs to the FAC on similar grounds, and has filed a Motion to Strike.
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B. Procedural¿¿
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On January 12, 2023, Defendant filed its Demurrer and Motion to
Strike. On January 23, 2023, Plaintiff filed its opposition to the demurrer. On
January 26, 2023, Defendant filed a reply brief to the demurrer. On January 26,
2023, Defendant also filed a notice of non-opposition to the Motion to Strike.
¿II. MOVING PARTY’S GROUNDS
FOR THE DEMURRER¿& MOTION TO STRIKE¿
Defendant, City of Hawthorne, demurs to the
entire complaint on the grounds that the city is statutorily immune from
liability for the alleged delay or failure to issue a business license pursuant
to Government Code section 814, noting:
“A public entity is not liable for an
injury caused by the issuance, denial, suspension or revocation of, or by the
failure or refusal to issue, deny, suspend or revoke, any permit, license,
certificate, approval, order, or similar authorization where the public entity
or an employee of the public entity is authorized by enactment to determine
whether or not such authorization should be issued, denied, suspended or
revoked.”
Defendant further demurs to the
entire Complaint on the grounds that it claims this Court does not have
jurisdiction over plaintiff’s causes of action because, per Defendant, Plaintiff
cites to an inapplicable statute, Government Code Section 815.6 – Failure to
discharge duty imposed by mandatory enactment – in support of her Complaint. Defendants argue that the issuance of a
business license is not a mandatory duty imposed on the licensing agency.
(California Business Professions Code Section 1600; Government Code Section 14.
Lastly, Defendant demurs to each
cause of action on the grounds that it claims that Plaintiff has not alleged
sufficient facts to state a claim for Breach of Contract, Intentional
Infliction of Emotional Distress, and Fraud.
Further, Defendant’s Motion to
Strike asks this Court to strike the following:
Page 7, lines 21-22: “The
complaint seeks punitive and exemplary damages based on California Civil Code
3294, which stated: A plaintiff may be awarded punitive damages if there is
clear and convincing evidence that the defendant in their case is guilty of:
1. Oppression
2. Fraud
3. Malice.
Page 8, line 12: “…for the
purposes of awarding punitive damages…”
Page 8, line 16-17 “…can be
required to pay damages above and beyond those available in traditional
negligence cases…”
The entire Second Cause of Action
for Intentional Infliction of Emotional Distress
¿III. REQUEST FOR JUDICIAL
NOTICE
Defendant requested that this
Court take judicial notice of the two business licenses issued to Persona310 on
December 5, 2022. A true and correct copy of the licenses are attached as
Exhibit A to the Declaration of Alison Stevens. Ruling: DISCUSS as to whether the Court should judicially notice this
arguably official record.
Plaintiff requested that this
Court take judicial notice of the following:
1.
Notice of Opposition to Defendant’s Demurrer to the First
Amended Complaint and Re: Compliance with C.C.P. Section 430.41, a copy of
which is attached as Exhibit A. DENIED,
the Court will not take judicial notice of the opposition brief, but instead
considered that brief as it considers the Defendant’s briefs.
2.
Hawthorne California website notification to public of
their license/tax certificate process, approval process, and advantages of
doing business in Hawthorne which includes fast track system, a copy of which
is attached as Exhibit B. DENIED, this is an alleged item of evidence, not something
the Court can judicially notice.
3.
City of Hawthorne Application for Business Tax Certificate
including page 7. Statement of Business License Regulation Consent Form in
which City of Hawthorne agreed to perform inspection by Fire Department which
they [allegedly] failed to comply with this regulation, a copy of which is
attached as Exhibit C. DISCUSS as to whether the Court should judicially notice this
arguably official record.
4.
Business Tax Certificate for Retail Sales of Prepackaged
Food dated five months and twelve days after Plaintiff applied for a business
license and given without a fire inspection, a copy of which is attached as
Exhibit D. DENIED, this is an alleged
item of evidence, not something the Court can judicially notice.
5.
Business Tax Certificate for Counseling dated five months
and twelve days after Plaintiff applied for a business license and given
without a fire inspection, a copy of which is attached as Exhibit E. DISCUSS as to whether the Court should judicially notice this
arguably official record.
6.
A City of Hawthorne billboard sign located near El Segundo
and Hawthorne Blvd. (facing north) in the city of Hawthorne informing the
public “All Business Within The City of Hawthorne Must Have a Valid Business
License,” the City failed to process Plaintiff’s two applications for business
licenses in their fast track process or a reasonable amount of time which
caused Plaintiff to not be able to open two businesses, no income, stress, and
business reputational damage, a copy of which is attached as Exhibit F. DENIED, this is an alleged item of evidence, not something the
Court can judicially notice.
7.
City of Hawthorne letter from Shuntell Dixon dated November
23, 2022 confirming the CITY was aware they were extremely delayed with
processing business licenses but continues to refuse to inform the public,
failure to protect, the CITY also stated there was no way they can inform
Plaintiff of when the licenses will be issued and are aware of Plaintiff’s
frustration, a copy of which is attached as Exhibit G. DENIED, this is an alleged item of evidence, not something the
Court can judicially notice.
8.
Initial response to the CITY meet and confer, Plaintiff
informed the CITY of negligent breach of contract, distress, and a fire
inspection was not completed and the CITY continues to refuse to provide an
inspection, a copy of which is attached to Exhibit H. DENIED, this is an alleged item of evidence, not something the
Court can judicially notice.
9.
Notice of Amended Complaint, Plaintiff informed the CITY of
negligent breach of contract, distress, and a fire inspection, a copy of which
is attached to Exhibit I. GRANTED
10.
Emails between Plaintiff and CITY confirming on page 2 that
the CITY stated they are behind at least a year, Plaintiff asking the CITY how
to escalate concerns regarding the business license application process page 2,
Plaintiff expressing her distress to the CITY in page 3, a copy of which is
attached to Exhibit J. DENIED, this is an
alleged item of evidence, not something the Court can judicially notice.
IV. ANALYSIS¿¿
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A. Demurrer
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A demurrer can be used only to challenge defects that
appear on the face of the pleading under attack or from matters outside the
pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39
Cal.3d 311, 318.) “To survive a demurrer, the complaint need only allege facts
sufficient to state a cause of action; each evidentiary fact that might
eventually form part of the plaintiff’s proof need not be
alleged.” (C.A. v. William S. Hart Union High School Dist. (2012) 53
Cal.4th 861, 872.) For the purpose of testing the sufficiency of the cause of
action, the demurrer admits the truth of all material facts properly pleaded. (Aubry
v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967.) A demurrer “does
not admit contentions, deductions or conclusions of fact or law.” (Daar v.
Yellow Cab Co. (1967) 67 Cal.2d 695, 713.)¿¿¿¿
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A pleading is uncertain if it is ambiguous or
unintelligible. (Code Civ. Proc., § 430.10, subd. (f).) A demurrer for
uncertainty may lie if the failure to label the parties and claims renders the complaint
so confusing defendant cannot tell what he or she is supposed to respond to.¿ (Williams
v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2.)
However, “[a] demurrer for uncertainty is strictly construed, even where a complaint
is in some respects uncertain, because ambiguities can be clarified under
modern discovery procedures.” (Khoury v. Maly's of California, Inc.
(1993) 14 Cal.App.4th 612, 616.)¿¿
Both parties submitted Requests for Judicial Notice under the
mistaken impression that at a hearing on a Demurrer the Court is at liberty to accept
letter, exhibits, photos, and other evidence that is not included within the four
corners of the Complaint. Under Evidence
Code § 451(a), a judge is required to take judicial notice of such matters as
statutes, legislative committee reports and analyses relating to the
legislative history of a statute, rules of court, and the Rules of Professional
Conduct. A judge must also take judicial
notice of facts and propositions of generalized knowledge, e.g., that the Sofi
Stadium is located in Inglewood ¿of that the Northridge Earthquake took place
in January of 1994. (Ev. Code § 451(f).) A judge cannot take judicial notice of
disputed facts or of things like contemporary social movements whose boundaries
and meaning as subject of debate. (See Malek
Media Group, LLC v. AXQG Corp. (2020) 58 Cal.App.5th 817,
825.) A
judge has discretion to take judicial notice of a city charter or municipal
code, or to take notice of the authenticity and contents of official documents but
not for the truth of those contents. (People
v. Castillo (2010) 49 Cal.4th 145, 157.) Is a business license executed in December of
2022 or an application for a business license a document over which the Court
may but is not required to take judicial notice? Yes.
Accordingly, the Court will discuss with the parties whether there is
a genuine dispute as to the existence and content of those documents submitted
for the Court to take judicial notice.
Breach
of Contract
To
state a cause of action for breach of contract, Plaintiff must be able to
establish “(1) the existence of the contract, (2) plaintiff’s performance or
excuse for nonperformance, (3) defendant’s breach, and (4) the resulting
damages to the plaintiff.” (Oasis West
Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.)
If
a breach of contract claim “is based on alleged breach of a written contract,
the terms must be set out verbatim in the body of the complaint or a copy of
the written agreement must be attached and incorporated by reference.” (Harris v. Rudin, Richman & Appel (1999)
74 Cal.App.4th 299, 307.) In some circumstances, a plaintiff may also “plead
the legal effect of the contract rather than its precise language.” (Construction Protective Services, Inc. v.
TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 198-199.)
Plaintiff’s
FAC alleges that it submitted two business license applications and the
Defendant, City of Hawthorne, accepted funds to process the application in July
2022. (FAC, p. 5:17 – 5:18.) Here, there is no contract alleged within the FAC,
and there are no details of the contract or any legal effects of the contract
alleged by Plaintiff. As noted in Defendant’s demurrer, there is no evidence
that the City consented to entering in a contract with business license
applicants, nor is there evidence City has consented to entering into a
contract. Although the Court understands that Plaintiff paid a fee to file the
business license application, this evidence is insufficient to establish
consideration. Further, the Court does not find that the time-estimate for
completion of the application process establishes an implied-in-fact contract.
As
such, the demurrer on the First Cause of Action for Breach of Contract is
sustained, with leave to amend.
Intentional
Infliction of Emotional Distress
“The
elements of a prima facie case for the tort of intentional infliction of
emotional distress are: (1) extreme and outrageous conduct by the defendant
with the intention of causing, or reckless disregard of the probability of
causing, emotional distress; (2) the plaintiff’s suffering severe or extreme
emotional distress; and (3) actual and proximate causation of the emotional
distress by the defendant’s outrageous conduct. Conduct to be outrageous must
be so extreme as to exceed all bounds of that usually tolerated in a civilized
community.” (Wilson v. Hynek (2012)
207 Cal.App.4th 999, 1009, citation and ellipses omitted.)
Gov. Code §
815 provides in pertinent part: Except as otherwise provided by
statute: “(a) A public entity is not liable for an injury,
whether such injury arises out of an act or omission of the public entity or a
public employee or any other person. (b) The liability of a public entity
established by this part (commencing with Section 814) is subject to any
immunity of the public entity provided by statute, including this part, and is
subject to any defenses that would be available to the public entity if it were
a private person.” (Gov. Code § 815.) There is no common law governmental tort
liability in California; and except as otherwise provided by statute, there is
no liability on the part of a public entity for any act or omission of itself,
a public employee, or any other person. (Cowling v. City of Torrance
(1976) 60 Cal.App.3d 757, 761.) As tort causes of action against public
entities are based on statute, the general rule that statutory causes of action
must be pleaded with particularity is applicable; and every fact essential to
the existence of statutory liability must be pleaded. (Susman v. City of Los
Angeles¿(1969) 269 Cal.App.2d 803, 809.) A "statute" is defined
as "an act adopted by the Legislature or by the Congress of the United
States, or a statewide initiative act" (Gov. Code § 811.8). “Duty cannot
be alleged simply by stating ‘defendant had a duty under the law’; that is a
conclusion of law, not an allegation of fact. The facts showing the existence
of the claimed duty must be alleged. [Citation.] Since the duty of a
governmental agency can only be created by statute or ‘enactment,’ the statute
or ‘enactment’ claimed to establish the duty must at the very least be
identified. (Becerra v. County of Santa Cruz¿(1998) 68 Cal.App.4th 1450,
1458.)
Here, Plaintiff asserts that City of Hawthorne is not
statutorily immune from liability due to the City action being malicious and
corrupt pursuant to Government Code section 815. Government Code section 815
states: “A public entity in California is not liable for a tortious injury
caused by an act or omission of a public entity or public employee or any other
person, except as otherwise provided by statute.” Plaintiff’s FAC notes that
Defendant misinformed and concealed “the delay of processing business license
applications was heinous and beyond the standards of civilized decency and
utterly intolerable in a civilized society.” (FAC, p. 6:18-6:20.) Plaintiff
further alleges that Defendant’s conduct of eventually providing the Plaintiff
with two fraudulent business licenses following Plaintiff’s submission of a
complaint to the court, without providing Plaintiff business with a fire
inspection by the Fire Department left Plaintiff to feel extremely offended,
shocked, and outraged.” (FAC, p. 6:20-6:23.)
Plaintiff’s FAC lists factors arguing why the City’s
conduct was extreme and outrageous: (1) Defendant’s staff informed Plaintiff
the Defendant has a delay in providing business licenses for several years now
and it takes at least a year to be given a business license; (2) The Plaintiff
was vulnerable and the defendant knew it. Plaintiff alleges Defendant knew a
business license would not be issued according to the timeline on the business
license application or Defendant’s website; (3) Defendant was in a position of
power as it is the only entity that can issue a business license to Plaintiff;
and (4) The defendant owed the plaintiff a fiduciary duty and breached the duty
of care, loyalty to the public, good faith, prudence or disclosure.
Defendant’s demurrer argues that
Government Code section 818.8 provides a public entity with immunity for a
misrepresentation noting, “a public entity is not liable for an injury caused
by misrepresentation by an employee of the public entity, whether or not such
misrepresentation be negligent or intentional.” Defendant also notes that Plaintiff cites to Government
Code section 815.6 which imposes liability on public entities for failure to
perform a mandatory duty. However, Defendant argues that the issuance of a
business license is discretionary.
Even if this Court found that Defendant owed a duty to
Plaintiff, Plaintiff has not satisfied the requirements to state a claim for
Intentional Infliction of Emotional Distress. This Court does not find that
Defendant’s conduct of being behind in processing business license applications
to be extreme nor outrageous. Further, as noted by Defendant, there is no
evidence that such conduct was directed at Plaintiff. If this Court were to
find that Plaintiff sufficiently established the elements required for
Intentional Infliction of Emotional distress based on these facts, every
individual or company with a business license application in the City of
Hawthorne would be able to file a claim for Intentional Infliction of Emotional
Distress due to the City running behind in processing the applications.
As such, this Court sustains the
demurrer to the Second cause of Action for Intentional Infliction of Emotional
Distress, without leave to amend.
Fraud
“The elements of fraud are (a) a
misrepresentation (false representation, concealment, or nondisclosure); (b)
scienter or knowledge of its falsity; (c) intent to induce reliance; (d)
justifiable reliance; and (e) resulting damage.” (Hinesley v. Oakshade Town Ctr. (2005) 135 Cal.App.4th 289, 294.)
The facts constituting the alleged fraud must be alleged factually and
specifically as to every element of fraud, as the policy of “liberal
construction” of the pleadings will not ordinarily be invoked. (Lazar v. Superior Court (1996) 12
Cal.4th 631, 645.) To properly
allege fraud against a corporation, the plaintiffs must plead the names of the
persons allegedly making the false representations, their authority to speak,
to whom they spoke, what they said or wrote, and when it was said or written. (Tarmann v. State Farm Mut. Auto. Ins. Co.
(1991) 2 Cal.App.4th 153, 157.)
Defendant’s
demurrer again argues that Government Code section 818.8 provides a public
entity with immunity for a misrepresentation noting, “a public entity is not
liable for an injury caused by misrepresentation by an employee of the public
entity, whether or not such misrepresentation be negligent or intentional.”
City also argues that when it comes to Plaintiff’s claim that the City
misrepresented how long it would take for the business license to issue, there
can be no intent for the City to induce reliance on the estimated time frame
because Plaintiff is legally required to apply for a business.
In
opposition, Plaintiff argues that City committed a fraudulent act by knowingly
withholding information on their application for business licenses, misleading
Plaintiff, and failing to provide a fire inspection prior to business licenses
being issued. Here, the Court does not find sufficient facts in Plaintiff’s FAC
that the City had an intent to induce reliance. As such, even if City was not
immune from misrepresentations made to Plaintiff, Plaintiff has not stated
sufficient facts to state a cause of action for Fraud. The Demurrer to the
fraud claim is thus sustained without leave to amend.
B. Motion to Strike¿¿
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
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.)¿ “When the defect
which justifies striking a complaint is capable of cure, the court should allow
leave to amend.”¿ (Vaccaro v. Kaiman (1998) 63 Cal.App.4th 761, 768.)¿
Here, Defendant has
requested the Court strike the following: Page 7, lines 21-22: “The
complaint seeks punitive and exemplary damages based on California Civil Code
3294, which stated: A plaintiff may be awarded punitive damages if there is
clear and convincing evidence that the defendant in their case is guilty of: 1.
Oppression, 2. Fraud, 3. Malice; Page 8, line 12: “…for the purposes of
awarding punitive damages…”; Page 8, line 16-17 “…can be required to pay
damages above and beyond those available in traditional negligence cases…”; The
entire Second Cause of Action for Intentional Infliction of Emotional Distress.
Here, Defendant correctly notes
that pursuant to Government Code section 818, Public entities are not liable
for punitive damages. As such, Defendant’s Motion to Strike portions of
Plaintiff’s FAC referencing punitive damages is GRANTED.
Defendant’s Motion to Strike also
requests that this Court Strike Plaintiff’s entire cause of action for
Intentional Infliction of Emotional Distress. Based on the reasoning above,
Defendant’s motion to strike the cause of action for Intentional Infliction of
Emotional Distress is moot because this Court sustained the Demurrer on that
cause of action without leave to amend.
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