Judge: Teresa A. Beaudet, Case: 22STCV10431, Date: 2022-09-14 Tentative Ruling

Case Number: 22STCV10431    Hearing Date: September 14, 2022    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

            Plaintiff Hsiang H. Kung (“Plaintiff”) filed this action on March 25, 2022 against Defendants CBL Freight Systems, Inc. (“CBL Freight”), Coast Bridge Logistics, Inc. (“Coast Bridge Logistics”), Auto Link Diesel Repair, Inc. (“Auto Link Diesel”), Qwic Trans. Inc. (“Qwic Trans.”), Pacific Ocean Transportation, Inc. (“Pacific Ocean Transportation”), Quinn Wu, Michael Wu, Hsin Hsu Wu, and Tina Wang (“Wang”). The Complaint asserts causes of action for (1) wrongful termination and retaliation in violation of public policy; (2) hostile work environment harassment in violation of FEHA and Government Code § 12940(j); (3) age discrimination in violation of Government Code § 12940(a); (4) discrimination based on race, color, national origin and/or ancestry in violation of Government Code § 12940(a); (5) failure to pay overtime; (6) meal break violations; (7) rest break violations; (8) late pay and waiting time penalties; (9) failure to pay all wages; (10) inaccurate wage statements; (11) failure to reimburse expenditures; (12) unfair business practices; and (13) Private Attorney’s General Act claims.

            Defendants CBL Freight, Qwic Trans., Pacific Ocean Transportation, Hsin Hsu Wu, Michael Wu, and Wang (collectively, “Defendants”) now demur to the first, second, third, fourth, and thirteenth causes of action of the Complaint. Plaintiff opposes.

Discussion

A.    Legal Standard

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.)

B.    Allegations of the Complaint

In the “General Allegations” section of the Complaint (starting at page 7), Plaintiff alleges that CBL Freight, Coast Bridge Logistics, Auto Link Diesel, Qwic Trans., and Pacific Ocean Transportation employed him as an employee from March 2008 to January 13, 2021. (Compl., ¶ 7.) Plaintiff was hired as a Sales Manager in March of 2008. (Compl.,¶ 8.)

For each year of his employment starting in March of 2008, defendants paid Plaintiff a percentage of his gross sales in commissions, which defendants sometimes characterized as a bonus. (Compl., ¶ 10.) In or about the first week of January 2021, Plaintiff, having not received his commissions for the year 2020, inquired about his commissions to management. (Compl.,     ¶ 10.) Knowing that Plaintiff would be owed substantial commissions at the end of 2020 because of a large sales increase in 2020, defendants decided to “re-arrange” Plaintiff’s sales position to another position whereby defendants would purchase a “chassis” for Plaintiff which Plaintiff could then rent to defendants for a fee. (Compl., ¶ 11.)

            Plaintiff alleges that in an attempt to avoid paying Plaintiff his owed commissions, Quinn Wu told Plaintiff that the “companies” had more than enough business and that Plaintiff was to switch his role to finding and hiring truck drivers. (Compl., ¶ 14.) On January 12, 2021, Plaintiff complained to management, Michael Wu, regarding his 2020 sales commissions, but his complaint was ignored. (Compl., ¶ 15.)

Plaintiff alleges that on January 13, 2021, defendants decided to retaliate and discriminate against Plaintiff for complaining about his owed commissions and “for his age” by terminating him. (Compl., ¶ 16.) On January 13, 2021, Plaintiff received a phone call from Quinn Qu, who informed Plaintiff that he was being terminated because the company could no longer afford him. (Compl., ¶ 17.) Plaintiff alleges that the only other salesperson in the “companies” is significantly younger than Plaintiff and has not been terminated. (Compl., ¶ 16.)

Plaintiff also alleges that management perpetuated and condoned a hostile work environment. (Compl., ¶ 19.) Plaintiff and other employees of Chinese descent were the constant targets of Quinn Wu’s harassment and hostile treatment. (Compl., ¶ 19.) Plaintiff observed that Quinn Wu would only treat the employees of Chinese descent harshly. (Compl., ¶ 19.)

C.    Exhaustion of Administrative Remedies

First, Defendants argue that the Court has no jurisdiction over the first, second, third, and fourth causes of action because Plaintiff failed to exhaust his administrative remedies prior to filing suit.

Before suing for violation of FEHA, a plaintiff must file a timely and sufficient administrative complaint with the California Department of Fair Employment and Housing (“DFEH”) and receive a “right to sue” notice. (Gov. Code, §§ 12960, 12965(b).) “   ” (Okoli v. Lockheed Technical Operations Co. (1995) 36 Cal.App.4th 1607, 1613 [internal quotations and citations omitted].) In addition, “[a]s a jurisdictional prerequisite, plaintiff bears the burden of pleading and proving timely filing of a sufficient complaint with the DFEH and obtaining a right-to-sue notice.” (Cal. Practice Guide: Employment Litigation (The Rutter Group 2022)        ¶ 16:253, citing Holland v. Union Pacific Railroad Co. (2007) 154 Cal.App.4th 940, 945 [internal quotations and emphasis omitted].) 

Plaintiff attaches as Exhibit 1 to the Complaint a November 9, 2021 “Notice of Case Closure and Right to Sue” from the DFEH. (Compl., ¶ 1, Ex. 1.) However, as Defendants note, the Complaint does not attach any administrative complaint Plaintiff filed with the DFEH, nor does Plaintiff allege that he filed an administrative complaint with the DFEH.

In the opposition, Plaintiff asserts that he “filed a DFEH Complaint for all applicable causes of action, including, but not limited to, his claims for wrongful termination and retaliation, hostile work environment, and discrimination,” and that “Defendants were shown proof of the claims that were filed but chose to ignore this evidence.” (Opp’n at p. 4:4-8.) But as discussed, the DFEH administrative complaint was not attached to the Complaint. As set forth above, a demurrer is used 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.) Plaintiff also inaccurately asserts that “Plaintiff alleges that he exhausted the administrative remedies by timely filing a DFEH Complaint.” (Opp’n at p. 4:20-21, citing to Complaint, page 7, paragraph 1.) But paragraph 1 on page 7 of the Complaint alleges that “Plaintiff has timely and properly exhausted his administrative remedies for discrimination and retaliation under the California Fair Employment and Housing Act, California Government Code § 12900 et seq…” (Compl., ¶ 1, p. 7.) There is no mention of a DFEH Complaint. Plaintiff does not cite to any legal authority demonstrating that this is sufficient.

            Based on the foregoing, the Court sustains the demurrer to the first, second, third, and fourth causes of action, with leave to amend.

D.    PAGA Claim

Defendants assert that Plaintiff’s thirteenth cause of action for “Private Attorney’s General Act Claims” is time-barred.

“A PAGA action is subject to a one-year statute of limitations.” (Esparza v. Safeway, Inc. (2019) 36 Cal.App.5th 42, 59; Code Civ. Proc., § 340, subd. (a).) However, after the filing of an LWDA notice, the statute of limitations is tolled for a maximum of 65 days. (See Lab. Code,      § 2699.3, subd. (a)(2)(A), “[t]he agency shall notify the employer and the aggrieved employee or representative by certified mail that it does not intend to investigate the alleged violation within 60 calendar days of the postmark date of the notice received pursuant to paragraph (1). Upon receipt of that notice or if no notice is provided within 65 calendar days of the postmark date of the notice given pursuant to paragraph (1), the aggrieved employee may commence a civil action pursuant to Section 2699.”

Plaintiff alleges that he was terminated on January 13, 2021. (Compl., ¶¶ 16, 17.) Defendants assert that the statute of limitations for Plaintiff’s PAGA cause of action was originally to end on January 13, 2022, one year after the date Plaintiff was terminated. This does not appear to be disputed by Plaintiff. Defendants also argue that “Plaintiff additionally earned the statutory tolling until January 25, 2022.” (Demurrer at p. 15:20-21.) It appears Defendants arrived at this conclusion by adding 65 days to November 21, 2021, the alleged date Plaintiff submitted his PAGA notice to the LWDA. (Compl., ¶ 97, Ex. 2.) However, as set forth above, a PAGA action is subject to a one-year statute of limitations, and one year after January 13, 2021 (the date Plaintiff was allegedly terminated) is January 13, 2022. Adding an additional 65 days to the one-year limitations period results in a cut-off date of March 19, 2022. In any event, Plaintiff filed the instant action after this date, on March 25, 2022. 

In the opposition, Plaintiff cites to nonbinding federal authority in support of the assertion that “[t]he Court has interpreted Section 2699.3(a)(2)(C) to, in essence, toll the statute of limitations an additional 60 days after the completion of administrative exhaustion.” (Opp’n at p. 7:7-9.) Plaintiff contends that the last day to file his PAGA cause of action thus “would have been 60 days after January 25, 2022, a deadline that Plaintiff met.” (Opp’n at p. 7:16-17.) But Labor Code section 2699.3, subdivision (a)(2)(C) provides, “[n]otwithstanding any other provision of law, a plaintiff may as a matter of right amend an existing complaint to add a cause of action arising under this part at any time within 60 days of the time periods specified in this part.” As Defendants note, Plaintiff is not seeking to amend an existing complaint in this action to add a PAGA cause of action. The instant demurrer concerns the PAGA cause of action in the original Complaint. The Court does not find that Plaintiff has shown that the PAGA cause of action is timely.

Defendants also assert that Plaintiff’s PAGA cause of action must fail because Plaintiff filed a deficient notice and failed to meet the requirements for exhaustion of administrative remedies. “Before filing a PAGA suit, an aggrieved employee acting on behalf of the state and other current or former employees must provide notice to the employer and the [Labor and Workforce Development Agency] of the specific provisions of [the Labor Code] alleged to have been violated, including the facts and theories to support the alleged violation. (Lab. Code,         § 2699.3, subd. (a)(1)(A); see id., subd. (c)(1)(A) [same].)” (Rojas-Cifuentes v. Superior Court (2020) 58 Cal.App.5th 1051, 1056 [internal quotations omitted].) 

Defendants assert that here, Plaintiff’s PAGA notice is inadequate because it lacks facts supporting the alleged Labor Code violations. Defendants cite to Brown v. Ralphs Grocery Co. (2018) 28 Cal.App.5th 824. In that case, the plaintiff’s PAGA notice “stated plaintiff was an hourly paid security guard employed by defendants at Los Angeles County business locations. Plaintiff alleged she and other aggrieved employees ‘did not take all meal and rest periods and were not properly compensated for missed meal and rest periods’ in violation of sections 226.7 and 512. She claimed defendants ‘failed to pay [her] and other aggrieved employees all wages due to them within any time period specified by California Labor Code section 204.’ Plaintiff alleged that defendants ‘did not provide [her] and other aggrieved employees with proper itemized wage statements’ as required by section 226, subdivision (a), including by failing ‘to include the name and address of the legal entity that is the employer.’” (Id. at p. 837.) The Court of Appeal found that “[t]hese allegations identified the specific provisions of the Labor Code alleged to have been violated, as required by section 2699.3, subdivision (a)(1)(A). But with one exception, the [PAGA notice] was a string of legal conclusions that parroted the allegedly violated Labor Code provisions. It did not state facts and theories supporting the alleged violations not implied by reference to the Labor Code. The notice did not give sufficient information for the LWDA to assess the seriousness of the alleged violations and decide whether to allocate scarce resources to an investigation, or for defendants to determine what policies or practices were being complained of, have an opportunity to cure the violations, and prepare a meaningful response.” (Id. at p. 837-838 [internal quotations omitted].)

Defendants assert that the allegations in Plaintiff’s PAGA notice here are less descriptive than those in Brown, as they are solely recitations of the statutory provisions Defendants are alleged to have violated. The Court agrees that here, Plaintiff’s PAGA notice contains legal conclusions that merely repeat the allegedly violated Labor Code provisions. (See Compl., ¶ 97, Ex. 2, pp. 2-3.) In the opposition, Plaintiff does not address Brown, and cites to nonbinding federal authority in support of the assertion that “[t]he Court has held that a notice that lacked much factual detail, but explained what plaintiff’s job entailed, the period of time she worked, and the legal theory underpinning her claim provided adequate notice.” (Opp’n at p. 8:2-6.) 

Based on the foregoing, the Court sustains Defendants’ demurrer to the thirteenth cause of action, without leave to amend.  

Conclusion

For the foregoing reasons, the Court sustains Defendants’ demurrer to the first, second, third, and fourth causes of action, with leave to amend. The Court sustains the demurrer to the thirteenth cause of action without 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. 

Defendants are ordered to give notice of this Order. 

DATED:  September 14, 2022                       ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court