Judge Teresa A. Beaudet, Case 22STCV00265 2023-01-23 Tentative Ruling

On January 4, 2022, Plaintiff Esther Cortez (“Plaintiff”) filed this action against Defendants Phoenix Law Firm, PC (“Phoenix”), Alan Gindler, and Joanne Park.

On April 28, 2022, Plaintiff filed the operative First Amended Complaint (“FAC”) against Phoenix, Alan Frank Gindler (“Gindler”), Joanna Park (“Park”), and Justice California Law Group (“JCLG”) (collectively, “Defendants”). The FAC asserts causes of action for (1) constructive wrongful discharge in violation of public policy, (2) constructive wrongful discharge in violation of FEHA, (3) race discrimination in violation of FEHA, (4) race harassment in violation of FEHA, (5) gender discrimination in violation of FEHA, (6) gender/sexual harassment in violation of FEHA, (7) failure to prevent discrimination and harassment in violation of FEHA, (8) failure to provide rest periods, (9) failure to provide meal periods, (10) failure to pay overtime wages, (11) wait time penalties, (12) unfair competition, (13) negligence/negligent supervision and retention, and (14) intentional infliction of emotional distress.

Defendants now demur to the first, second, fourth, eighth, ninth, tenth, eleventh, twelfth,

thirteenth, and fourteenth causes of action of the FAC. Defendants also move to strike portions of the FAC. Plaintiff opposes both.

As an initial matter, the Court notes that on October 24, 2022, the Court issued an Order continuing the hearing on the instant demurrer and motion to strike, and ordering the parties to meet and confer. The October 24, 2022 Order provides, inter alia, that “[i]f the parties are unable to resolve the pleading issues¿or if the parties are otherwise unable to meet and confer in good faith, Defendants are to¿thereafter¿file and serve¿a declaration setting forth the efforts to meet and confer in compliance with¿Code of Civil Procedure section 430.41, subdivision (a)(3) and Code of Civil Procedure section 435.5, subdivision (a)(3) within 15 days of this order.”

On November 30, 2022, the parties filed a Joint Report Re Status of Defendants’ Demurrer and Motion to Strike Portions of the Pleadings. The Joint Report indicates that Defendants have agreed to withdraw their demurrer to the second cause of action of the FAC.

In the FAC, Plaintiff alleges that she was employed by Defendants intermittently for approximately 10 years, including “intermittent full-time employment” by Phoenix, JCLG, and/or Sunland Legal Group between 2010 and on or about June 6, 2019, when Plaintiff resigned. (FAC, ¶ 6.) Plaintiff was hired as a receptionist but was then asked to work as a case handler. (FAC, ¶ 6.)

Plaintiff alleges that JCLG is a defunct California law firm that now conducts business as Phoenix. (FAC, ¶ 2.) JCLG was allegedly the successor law practice to another defunct law practice operated by Gindler and Park named Sunland Legal Group (“Sunland”). (FAC, ¶ 2.) Park was Plaintiff’s supervisor, and Park and Gindler owned, operated, and/or managed Phoenix, JCLG, and Sunland at all relevant times. (FAC, ¶ 2.)

Plaintiff alleges that “Park would bully and degrade Plaintiff on a daily basis and place extreme pressure on Plaintiff to perform and made the office environment intolerably stressful, by constantly screaming, yelling, throwing objects, and using abusive, degrading, and derogatory language toward Plaintiff.” (FAC, ¶ 9.)

Plaintiff alleges that Park’s conduct “arose out of Park’s racist and oft-stated belief that Hispanic people are dumb, lazy, uneducated and beneath her.” (FAC, ¶ 9.) Plaintiff is a Latina. (FAC, ¶ 10.) Park would tell Plaintiff (and at least one other Hispanic employee) that “Hispanic people are ‘ignorant’, ‘lazy’, ‘stupid’, ‘dumb’, ‘inarticulate’, and ‘blue-collar.’” (FAC, ¶ 10.) Park told Plaintiff she was “doing blue-collar work”, that she was “ignorant like the clients,” and/or that that her “culture” was “ignorant.” (FAC, ¶ 10.) Park also told Plaintiff that “Hispanics were used to kissing ass to get ahead in life instead of working detailed and hard.” (FAC, ¶ 10.)

Park would also regularly comment on Plaintiff’s appearance and tell Plaintiff that she did not look pretty and had gained weight after having her children. (FAC, ¶ 8.) Park told Plaintiff that her husband would leave her because of her poor appearance and unattractiveness. (FAC, ¶ 11.) Park also told Plaintiff that “because she was stupid, her only asset was to keep up her good looks, which she had failed to do,” and that “Park told Plaintiff she would contract HIV as a result of her supposed promiscuity.” (FAC, ¶ 11.)

Plaintiff further alleges that Park ordered Plaintiff to coach clients for depositions and to adjust their statements of how the accidents occurred; and required Plaintiff to convince clients to go to Park’s preferred body shops and medical providers. (FAC, ¶ 12.) Plaintiff alleges that an insurance agent was incentivized to pressure Plaintiff to sign up new clients because Park, Gindler, and Phoenix were unlawfully paying referral fees for clients. (FAC, ¶ 15.) Park also gave Plaintiff a business card identifying Plaintiff as “Vanessa Cortez,” and explained to Plaintiff that Defendants did not want insurance carriers to know that Phoenix was a continuation of JCLG. (FAC, ¶ 6.)

Plaintiff further alleges that Defendants misclassified Plaintiff as an “exempt” salaried employee. (FAC, ¶ 16.) Defendants also allegedly failed to provide Plaintiff with the required duty-free rest breaks and meal periods during the relevant time period. (FAC, ¶ 18.) Plaintiff alleges that Defendants failed to pay Plaintiff certain earned and unpaid wages, failed to properly maintain records, and failed to provide Plaintiff with accurate, itemized wage statements. (FAC, ¶¶ 20-22.)

Defendants first argue that a two-year statute of limitations bars Plaintiff’s first, second, thirteenth, and fourteenth causes of action. As set forth above, Plaintiff dismissed without prejudice her first, thirteenth, and fourteenth causes of action. Thus, the demurrer to those causes of action is denied as moot. In addition, as discussed, Defendants agreed to withdraw their demurrer to the second cause of action.

Next, Defendants assert that the eighth cause of action for failure to provide rest periods, ninth cause of action for failure to provide meal periods, tenth cause of action for failure to pay overtime wages, and eleventh cause of action for wait time penalties fail to allege sufficient facts to impose personal liability as to Gindler and Park.

Under Labor Code section 558.1, subdivision (a), “[a]ny employer or other person acting on behalf of an employer, who violates, or causes to be violated, any provision regulating minimum wages or hours and days of work in any order of the Industrial Welfare Commission, or violates, or causes to be violated, Labor Code sections 203, 226, 226.7, 1193.6, 1194, or 2802, may be held liable as the employer for such violation.” Pursuant to Labor Code section 558.1, subdivision (b), “[f]or purposes of this section, the term ‘other person acting on behalf of an employer’ is limited to a natural person who is an owner, director, officer, or managing agent of the employer, and the term ‘managing agent’ has the same meaning as in subdivision (b) of Section 3294 of the Civil Code.”

Defendants cite to Usher v. White (2021) 64 Cal.App.5th 883, 886, where the plaintiffs brought a putative wage-and-hour class action lawsuit against, inter alia, Shirley White (Shirley), based on Labor Code section 558.1. The Court of Appeal in Usher “interpret[ed] the words ‘violates, or causes to be violated’ in section 558.1 in their ordinary meaning to impose liability on an ‘owner’ such as Shirley if, when acting on behalf of an employer, the ‘owner’ has personal involvement in the enumerated violations in section 558.1; or, absent personal involvement, has sufficient participation in the activities of the employer—including, for example, over those responsible for the alleged wage and hour violations—such that the ‘owner’ may be deemed to have contributed to, and thus have ‘cause[d]’ such violations.” (Ibid.)
Defendants assert that Plaintiff makes only conclusory allegations about Gindler and Park’s titles at Phoenix and JCLG, which are insufficient to state a cause of action based on Labor Code section 5581. But as Plaintiff notes, she alleges that “[w]hile acting on behalf of JCLG and Phoenix, Defendant Gindler who was owner, director officer and/or managing agent of JCLG and Phoenix, and Defendant Park the office manager and/or managing agent for JCLG and Phoenix, caused the California laws regarding classification to be violated by establishing and/or implementing employment policies and/or practices that violated said laws. Gindler and Park also caused the applicable law regarding mandatory rest breaks to be violated by establishing and/or implementing employee misclassification policies/practices as well as rest break and premium pay policies that violated the applicable Industrial Wage Order and/or California regulation as well as Labor Code Section 226.7.” (FAC, ¶ 110.) Plaintiff further alleges that “Gindler and Park also caused the applicable law regarding wage statements to be violated by establishing and/or implementing employee misclassification policies/practices…” (FAC, ¶¶ 130, 135.)

Next, Defendants assert that the fourth cause of action for race harassment in violation of FEHA and the sixth cause of action for gender/sexual harassment in violation of FEHA are subject to demurrer, because the allegations in these causes of action are uncertain as to the timeframe of events that could be barred by the statute of limitations.[1]

Defendants note that Plaintiff alleges she was “employed by Defendants intermittently for approximately 10 years, including intermittent full time employment by SLG, JCLG, and/or Phoenix between 2010 and on or about June 6, 2019 when Plaintiff resigned.” (FAC, ¶ 6.) Plaintiff also alleges that “[a]fter a break in employment, in or about March 2018, Plaintiff began working for JCLG, Gindler and Park again as a case handler.” (FAC, ¶ 6.) Defendants note that “Plaintiff does not identify when she was employed by which Defendant and she fails to identify which alleged wrongful conduct took place during an identifiable time period.” (Demurrer at p. 8:6-7.) Defendants thus assert that the timeframe of the allegations are ambiguous such that Defendants cannot determine if the causes of action are barred by applicable statutes of limitation.

In the opposition, Plaintiff does not address this point, which the Court construes as a concession of the merits of the argument. Indeed, other than the dates referenced above in paragraph 6 of the FAC, Plaintiff does not appear to allege when the alleged wrongful conduct took place. The Court thus agrees with Defendants that the FAC creates ambiguity as to the timeframe of the allegations. (See Code Civ. Proc., § 430.10, subd. (f), [t]he party against whom a complaint…has been filed may object, by demurrer…to the pleading on any one or more of the following grounds…[t]he pleading is uncertain. As used in this subdivision, ‘uncertain’ includes ambiguous and unintelligible.”)

Based on the foregoing, the Court sustains the demurrer to the fourth and sixth causes of action, with leave to amend.[2]

Defendants next assert that the twelfth cause of action must fail. Defendants note that the caption page of the FAC provides that the twelfth cause of action is for “Unfair Competition (Bus. & Prof. C. § 17700, et seq.)”

As noted by Defendants, Business and Professions Code section 17701 provides that “[i]t is unlawful for any person to issue coupons unless there shall be specified in or upon such coupon, specifically or by class, the person by whom or with whom such coupon is exchangeable or redeemable, and unless such person specified is either: (a) The person issuing such coupon. (b) Member or members of an association issuing such coupon which association shall be a bona fide organization in existence for a period of at least six months prior to issuing such coupon. The name and address by street and number of the principal place of business of the association shall also be specified in or upon such coupon. (c) A person engaged in the business of issuing coupons for use or distribution by itself or by other persons.” In addition, pursuant to Business and Professions Code section 17701.5, “[i]t is unlawful for any person to advertise a price that requires the buyer to send in a coupon to the manufacturer for a cash rebate, unless the price actually paid to the person selling the item is clearly and conspicuously advertised along with the final price with the coupon.” Defendants note that the FAC does not allege facts supporting any purported cause of action for violation of the foregoing statutes.

In the opposition, Plaintiff indicates that the caption page of the FAC contains a typographical error, and that Plaintiff intended to refer to Business and Professions Code section 17200, et seq. (the “Unfair Competition Law”). Plaintiff also notes that paragraph 25 of the FAC alleges that “Plaintiff is informed and believes and thereon alleges that Defendant constructively wrongfully discharged Plaintiff as a result of Plaintiff being subjected to an extremely abusive and hostile work environment in violation of the well-established, substantial, and fundamental policies of this state found in the following laws…California Business & Professions Code Section 17200 et seq., which prohibit unfair, unlawful or fraudulent business practices.” (FAC, ¶ 25(c).)

However, the Court notes that in addition to the typo in the caption page, the twelfth cause of action itself also does not reference “Business and Professions Code section 17200, et seq.”, rather, it states “Unfair Competition (Cal. Bus. & Prof. Code § 17000 et seq.)” (FAC, p. 24:17-19.) The Court agrees with Defendants that the twelfth cause of action is thus ambiguous. (See Code Civ. Proc., § 430.10, subd. (f), [t]he party against whom a complaint…has been filed may object, by demurrer…to the pleading on any one or more of the following grounds…[t]he pleading is uncertain. As used in this subdivision, ‘uncertain’ includes ambiguous and unintelligible.”)

Based on the foregoing, the Court sustains the demurrer to the twelfth cause of action, with leave to amend.

A court may strike any “irrelevant, false, or improper matter inserted in any pleading” or any part of a pleading “not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.” (Code Civ. Proc., § 436.) “The grounds for a motion to strike shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice.” (Code Civ. Proc., § 437.)

Defendants move to strike Plaintiff’s request for punitive damages. As set forth above, Plaintiff dismissed without prejudice her first and fourteenth causes of action (as well as the thirteenth cause of action). In addition, as discussed, the Court sustains Defendants’ demurrer to the fourth, sixth, and twelfth causses of action, with leave to amend. Thus, Defendants’ motion to strike the punitive damages allegations in paragraphs 31, 66, 94, and 158 of the FAC is denied as moot.

Plaintiff also seeks punitive damages in connection with the second cause of action for constructive wrongful discharge in violation of FEHA (FAC, ¶ 41), the third cause of action for race discrimination (FAC, ¶ 54), the fifth cause of action for gender discrimination (FAC, ¶ 79), the seventh cause of action for failure to prevent discrimination and harassment (FAC, ¶ 105), and in paragraph 6 of the prayer for relief.

Defendants first assert that Plaintiff cannot recover punitive damages on her second cause of action for constructive wrongful discharge in violation of FEHA, because such cause of action is barred by the statute of limitations set forth in Code of Civil Procedure section 335.1. Pursuant to Section 335.1, “[a]n action for assault, battery, or injury to, or for the death of, an individual caused by the wrongful act or neglect of another” must be brought “[w]ithin two years.” (Code Civ. Proc., § 335.1.) But as noted by Plaintiff in her opposition to the demurrer, the second cause of action is for an alleged violation of FEHA. Pursuant to Government Code section 12960, subdivision (e)(5), “[a] complaint alleging¿a violation of¿Section 51.9 of the Civil Code¿or¿any other violation of Article 1 (commencing with¿Section 12940) of Chapter 6 shall not be filed after the expiration of three years from the date upon which the unlawful practice or refusal to cooperate occurred.”

Next, Defendants assert that Plaintiff has failed to allege facts sufficient to warrant the imposition of punitive damages on Gindler, Phoenix, or JCLG. Defendants note that pursuant to Civil Code section 3294, subdivision (b), “[a]n employer shall not be liable for damages pursuant to subdivision (a), based upon acts of an employee of the employer, unless the employer had advance knowledge of the unfitness of the employee and employed him or her with a conscious disregard of the rights or safety of others or authorized or ratified the wrongful conduct for which the damages are awarded or was personally guilty of oppression, fraud, or malice. With respect to a corporate employer, the advance knowledge and conscious disregard, authorization, ratification or act of oppression, fraud, or malice must be on the part of an officer, director, or managing agent of the corporation.”

Defendants assert that here, “[o]ne individual, Defendant Park, allegedly engaged in misconduct at some unknown point in time during an approximate 10 year period of time where Plaintiff left and returned to the workplace,” and that “[o]ther than these conclusory statements, Plaintiff does not include any specific facts regarding the nature and type of the acts committed or ratified by any managing agent of Defendants. Plaintiff has thus failed to set forth any facts that establish that any managing agent of Defendants acted with the deliberate intent to vex, injure or annoy Plaintiff or ratified such misconduct.” (Mot. at p. 4:16-22.)

In her opposition to the motion to strike, Plaintiff points to allegations of Park’s misconduct in the FAC; but fails to respond to Defendants’ argument that the allegations are insufficient to warrant the imposition of punitive damages as to Gindler, Phoenix, and JCLG. The Court construes Plaintiff’s lack of opposition on this point as a concession of the merit of Defendants’ arguments

Lastly, Defendants move to strike paragraphs 12 and 15 of the FAC, contending that such allegations “are copies of allegations from a separate lawsuit, filed by another client of Plaintiff’s attorney, Melissa Zavala Sierra, against these Defendants, and they are irrelevant to this Plaintiff’s claims, and seek to embarrass one or more of the Defendants.” (Notice of Motion at p. 2:20-23.) In paragraph 12 of the FAC, Plaintiff alleges that “Park ordered Plaintiff to coach clients for depositions and to adjust their statements of how the accidents occurred based on Park’s concocted stories of events regardless of whether the statements were true or not. She also required Plaintiff to convince clients to go to Park’s preferred body shops and medical providers.” In paragraph 15 of the FAC, Plaintiff alleges as follows:

“Park ordered Plaintiff to take calls from an insurance broker/agent who would send

new clients involved in automobile collisions to the office. The insurance agent would call and text after business hours demanding Plaintiff to meet with the new clients and sign them up before they retained another attorney. Plaintiff is informed and believes

and thereon alleges that the insurance agent was incentivized to pressure Plaintiff to

sign up clients because Defendants, including Park, Gindler, and Phoenix, were unlawfully paying referral fees for clients. Plaintiff is informed and believes and thereon alleges Defendants violated California law by paying non-licensed attorneys for referrals of personal injury cases. (Bus. & Prof. C. § 6152(a) and (b).)”

Plaintiff counters that paragraphs 12 and 15 of the FAC are relevant as they demonstrate the alleged intolerable working conditions under which Plaintiff was forced to work. The Court does not find that paragraphs 12 and 15 of the FAC are irrelevant to Plaintiff’s action here, and thus denies Defendants’ motion to strike paragraphs 12 and 15.

Based on the foregoing, the Court overrules Defendants’ demurrer to the eighth, ninth, tenth, and eleventh causes of action. The Court sustains Defendants’ demurrer as to the fourth, sixth, and twelfth causes of action, with leave to amend. Defendants’ demurrer to the first, thirteenth, and fourteenth causes of action is moot.

Defendants’ motion to strike paragraphs 31, 66, 94, and 158 of the FAC is denied as moot. Defendants’ motion to strike paragraphs 12 and 15 of the FAC is denied. The Court grants Defendants’ motion to strike paragraphs 41, 54, 79, 105, and paragraph 6 of the prayer for relief of the FAC as to Gindler, Phoenix, and JCLG, with leave to amend.

The Court orders Plaintiff to file and serve an amended complaint, if any, within 20 days of the date of this Order. If no amended complaint is filed within 20 days of this Order, Defendants are ordered to file and serve their answer within 30 days of the date of this Order.¿

[1]Defendants also assert that the thirteenth and fourteenth causes of action must fail on these grounds. As set forth above, Plaintiff dismissed these causes of action.

[2]The Court thus need not and does not address Defendants’ remaining arguments concerning these causes of action.

Superior Court of California

County of Los Angeles

Department 50