Judge: Upinder S. Kalra, Case: 23STCV02615, Date: 2023-10-02 Tentative Ruling
Case Number: 23STCV02615 Hearing Date: October 24, 2023 Dept: 51
Tentative Ruling
Judge Upinder S.
Kalra, Department 51
HEARING DATE: October
24, 2023
CASE NAME: Engle v. Fair Financial Group
CASE NO.: 23STCV02615
DEMURRER
TO FIRST AMENDED COMPLAINT
MOVING PARTY: Defendant
Brad Stewart
RESPONDING PARTY(S):
REQUESTED RELIEF:
1. Demurrer
to the Sixth Cause of Action for failure to state facts sufficient to
constitute a cause of action.
TENTATIVE RULING:
1. Demurrer
to the Sixth Cause of Action is SUSTAINED without leave to amend.
STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:
On February 7, 2023, Plaintiff Kevin Engle (“Plaintiff”)
filed a complaint against Defendants Fair Financial Corp., Shift Technologies
Inc., Brad Stewart, and George Arison (“Defendants.”) The complaint alleged six
causes of action: (1) Discrimination on
the Basis of Disability in Violation of FEHA,
(2) Retaliation in Violation of FEHA, (3) Harassment on the Basis of Disability
in Violation of FEHA, (4) Wrongful Discharge in Violation of Public Policy, (5)
Violations of California WARN Act, and (6) Private Attorneys General Act. The
complaint alleges that Plaintiff, while working for Defendant Fair Financial
Corp., was subjected to discrimination, harassment, and retaliation based on
his mental health. During his time at Fair, Plaintiff was asked about his
medical conditions and what medications he was taking for his diagnosed
depression. Despite previous positive feedback about Plaintiff’s work, Mr. Ng –
Plaintiff’s new manager – stated that there were some concerns with his
performance after Plaintiff discussed his mental health with Mr. Ng. In March
2022, some employees of Fair were told that they would not be joining Defendant
Shift when it acquired Fair. Plaintiff learned that most of Mr. Engle’s team
was being acquired, but Mr. Engle was terminated in April 2022.
On May 3, 2023, Defendant Shift Technologies Inc., and
George Arison each filed a Demurrer.
On June 2, 2023, Defendant Brad Stewart filed a
Demurrer.
On July 3, 2023, Defendants Shift Technologies Inc., and
George Arison filed a Motion to Compel Arbitration. Plaintiff’s Opposition was
filed on September 18, 2023. Defendants’ Reply was filed on September 25,
2023.
On August 7, 2023, Plaintiff filed a First Amended
Complaint (FAC) with two additional causes of action for: (7) Waiting Time
Penalties (Lab. Code § 203); and (8) Unfair Competition (Bus. & Prof. Code
§§ 17200 et seq.)
On September 8, 2023, Defendant Brad Stewart timely filed a
Demurrer to the FAC.
On
October 11, 2023, Plaintiff filed a request for dismissal of his fifth,
seventh, and eighth causes of action as to Defendant Brad Stewart. Plaintiff
also timely filed an opposition to Defendant Brad Stewart’s Demurrer on this
date.
On
October 17, 2023, Defendant Brad Stewart timely filed a reply.
LEGAL STANDARD:
Meet and Confer
Prior to filing a demurrer, the demurring party is required
to satisfy their meet and confer obligations pursuant to Code of Civ. Proc.
(CCP) §430.41 and demonstrate that they so satisfied their meet and confer
obligation by submitting a declaration pursuant to CCP §430.41(a)(2) & (3). Here, the parties sufficiently met and conferred via telephone.
(Owen Decl. ¶ 2.) Therefore, the meet and confer requirement is met.
Demurrer
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. …. The only issue involved in a demurrer hearing is whether
the complaint, as it stands, unconnected with extraneous matters, states a
cause of action.” (Hahn 147
Cal.App.4th at 747.)
ANALYSIS:
Sixth Cause of
Action – PAGA Violation of Labor Code § 1400 et seq.
Defendant contends that Plaintiff’s sixth cause of action
against Defendant fails because PAGA expressly precludes a claim for penalties
if it arises out of an alleged violation of the Labor Code’s notice
requirements and he cannot state a claim for violations of Cal-WARN. Defendant
argued under demurrer to the fifth cause of action before Plaintiff dismissed
it that Plaintiff failed to state sufficient facts that Defendant could be held
personally liable for the alleged PAGA claims. Plaintiff argues that Defendant
can be held personally liable for Cal-WARN violations under Labor Code § 558.1
and that PAGA allows claims under Cal-WARN.
Labor Code § 1400.5 states: “The definitions set forth in
this section shall govern the construction and meaning of the terms used in
this chapter.” (emphasis added.) Labor Code § 1400.5(b) defines “Employer”
as “any person, as defined by Section 18, who directly or indirectly owns and operates
a covered establishment.” Labor Code § 18 defines “Person” as “any person,
association, organization, partnership, business trust, limited liability company,
or corporation.” A CEO is not included in the definition of person. (Ibid.) This section is self-contained,
and therefore, Defendant is not included in his capacity as CEO of Fair.
Accordingly, Defendant’s demurrer is SUSTAINED without
leave to amend as to the sixth cause of action.
CONCLUSION:
For
the foregoing reasons, the Court decides the pending motion as follows:
1. Demurrer
to the Sixth Cause of Action is SUSTAINED without leave to amend.
Pursuant to CCP § 581d, this
written order of dismissal constitutes a judgment and shall be effective for
all purposes. The Clerk shall note this judgment in the register of actions in
this case.
Moving party is to give notice.
IT IS SO ORDERED.
Dated: October
23, 2023 __________________________________ Upinder
S. Kalra
Judge
of the Superior Court