Judge Thomas Falls, Case 22PSCV00017 2022-08-16 Tentative Ruling

Defendant Irwindale Industrial Clinic’s Demurrer to Plaintiff’s First Amended Complaint

Defendant Irwindale Industrial Clinic’s Demurrer to Plaintiff’s First Amended Complaint is SUSTAINED without leave to amend.

This is a negligence case. Plaintiff Leticia Valdez (“Plaintiff”) alleges the following against Defendants FS Solutions Inc., Defendant Irwindale Industrial Clinic, and Does 1 through 20 (collectively, “Defendants”): Plaintiff worked for Keolis Transit America, Inc. as a bus driver. Keolis asked Plaintiff to take a random drug test. Kelois was under contract and in-privity of contract with Defendants for Defendants to perform drug testing on Keolis’s employees.

Despite Plaintiff never using illegal drugs, Plaintiff’s drug test came back positive for cocaine. She was terminated from her position. During the time of the drug test, there was another male at the clinic. Additionally, Plaintiff claims that she was given one urine container, but that the clinic’s employees informed Plaintiff that Plaintiff had two urine containers. Plaintiff’s negligence cause of action against Defendants is based upon her allegation that Defendants failed to “safely manage and process Plaintiff’s urine sample for drug testing.”[1]

On February 23, 2022, Defendant Irwindale Industrial Clinic (“Defendant”) filed a Demurrer with a Motion to Strike, which the court sustained and overruled in part.

On July 14, 2022, the parties filed a ‘Stipulation and Order Striking Irrelevant Language and Claim for Attorney’s Fees from First Amended Complaint.’

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. In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. (CCP §§ 430.30, 430.70.) At the pleading stage, a plaintiff need only allege ultimate facts sufficient to apprise the defendant of the factual basis for the claim against him. (Semole v. Sansoucie (1972) 28 Cal. App. 3d 714, 721.) A “demurrer does not, however, admit contentions, deductions or conclusions of fact or law alleged in the pleading, or the construction of instruments pleaded, or facts impossible in law.” (S. Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732 [internal citations omitted].)

Defendant demurs only to the third cause of action for Breach of Contract (Third Party Beneficiary).

A third party need not be named or identified individually to be an express beneficiary and a third party may enforce a contract where he shows that he is a member of a class of persons for whose benefit it was made. (See Spinks v. Equity Residential Briarwood Apartments (2009) 171 Cal.App.4th 1004, 1023.) (See Schauer v. Mandarin Gems of California, Inc. (2005) 125 Cal.App.4th 949, 957-58 (stating that a promisor’s understanding that the promisee had an intent to make the obligation inure to the benefit of the third party is sufficient to show that a contract was expressly made for that third party’s benefit).) The court should examine “the express provisions of the contract at issue, as well as all of the relevant circumstances under which the contract was agreed to, in order to determine not only (1) whether the third party would in fact benefit from the contract, but also (2) whether a motivating purpose of the contracting parties was to provide a benefit to the third party, and (3) whether permitting a third party to bring its own breach of contract action against a contracting party is consistent with the objectives of the contract and the reasonable expectations of the contracting parties.” (Goonewardene v. ADP, LLC (2019) 6 Cal.5th 817, 830.) “All three elements must be satisfied to permit the third party action to go forward.” (Id. at 133) (emphasis added). Furthermore, pursuant to Civil Code section 1559, for a contract to be enforced by a third party, the contract must have been expressly for the benefit of a third person.

Plaintiff has not provided facts to show that the contract was expressly made for Plaintiff’s benefit. As Defendant articulated, “[t]here are many people who are incidentally benefitted by the contract between Keolis and Irwindale Industrial Clinic” but that does not mean that they are a beneficiary.

While the contract was not expressly made for Plaintiff's direct benefit, Plaintiff was a member of the class that the drug testing agreement was made to directly apply to and to directly affect. Plaintiff was not an "incidental" beneficiary, but an essential, necessary, consequential and requisite part of the agreement. The class, and plaintiff, were a major part of the agreement. Without plaintiff or the class, there would be no need for such an agreement. As a direct consequence of the agreement Plaintiff was terminated from her job. This fact alone makes the Plaintiff an essential and direct beneficiary and target of this agreement. Had the drug test amounted to a positive drug test for Plaintiff, she would have kept her job.

First, as noted by Defendant, these allegations are not new facts but merely legal conclusions.

Second, third party beneficiary law requires that the contract be made “expressly for the benefit of a third person,” but here, the contract made between Keolis and Industrial Clinic was “intended to economically benefit Keolis” as the benefit from the purpose of the contract is allow “Keolis to hire competent and safe drivers.” (Demurrer pp. 5-6.)

Third, the court finds that the FAC concedes that the contract was not made for her benefit. Afterall, Plaintiff states that this contract made “between Defendants and Keolis Transit America” (FAC ¶27, 28) “was not expressly made for Plaintiff's direct benefit.” (FAC ¶29) (emphasis added).

In Opposition, Plaintiff merely cites to the allegations and to case law stating that “the court must allow the trier of fact to decide whether or not the contract contemplated Plaintiff as a third-party beneficiary.” (Opp. p. 5).[2]

Not so as Plaintiff has failed to plead any facts to support the cause of action as a matter of law.

Thus, contrary to Plaintiff’s assertion that the contract was made to directly affect Plaintiff and the class, the only party the contract was made to directly affect was Keolis. As such, if there is one party that has standing to sue on this contract, it is Keolis, not Plaintiff.

Based on the foregoing, the demurrer is sustained. Though leave to amend is liberally granted, the court has already done so once before. Not only does Plaintiff’s FAC fail to plead the appropriate facts, but the Opposition also fails to provide an analysis as to why her cause of action should survive. For those reasons, Plaintiff has demonstrated that there is no probability that she can cure the defects. Thus, the court declines to grant leave to amend.

[1] Though not clear, it appears the basis of Plaintiff’s action is that there was a mix-up in the samples between hers and another individual at the clinic.

[2] Plaintiff erroneously states that the breach of contract cause of action is the fifth cause of action, but it is the third cause of action (and there are only three causes of action).