Judge: Yolanda Orozco, Case: 21STCV293269, Date: 2022-09-14 Tentative Ruling
Case Number: 21STCV293269 Hearing Date: September 14, 2022 Dept: 31
DEMURRER TO CROSS-COMPLAINT IS SUSTAINED
Background
This action arises out of the alleged fraudulent conduct of Guadalupe Morante, a former employee of LRS Realty & Management, Inc.
On August 9, 2021, LRS Realty & Management, Inc. (“Plaintiff” or “LRS”) initiated the present action against Guadalupe Morante, Humberto Morante, L&B General Contractors, Inc., and Fix It Right Construction.
Plaintiff’s Complaint alleges the following causes of action:
1.
Fraud;
2.
Embezzlement;
3.
Misappropriation of Trade Secrets (California Civil
Code § 3426, et seq.);
4.
Misappropriation of Trade Secrets;
5.
Interference with Prospective Economic Advantage;
6.
Intentional Interference with Contractual
Relations;
7.
Conversion;
8.
Breach of Duty of Loyalty;
9.
Violation of Business and Professions Code §
17200;
10. Injunctive
Relief;
11. Loss
Due to Dishonest or Willful Act of Employee (Labor Code, Section 2865; IWC Wage
Order 4-2001, Section 8);
12. Violation
of the Computer Data Access and Fraud Act (Penal Code, Section 502(e));
13. Violation
of the Computer Fraud and Abuse Act (18 U.S.C § 1030);
14. Unjust Enrichment/Restitution; (15) Accounting; and (16) Constructive Trust.
On January 5, 2022, Cross-Complainant Guadalupe Morante and Humberto Morante filed a Cross-Complaint against Eric Steven Cano and LRS Realty & Management, Inc. for:
1.
Failure To Compensate For All Hours Worked In Violation
Of Labor Code § 1198 Et Seq.,
2.
Failure To Pay Overtime In Violation Of Labor Code §§
510, 1194, 1194.2, 1198,
3.
Failure To Authorize Or Permit Meal Periods In
Violation Of Labor Code §§ 226.7, 512 And The Applicable Wage Order,
4.
Failure To Authorize Or Permit Rest Periods In
Violation Of Labor Code §§ 226.7 And The Applicable Wage Order,
5.
Failure To Furnish Complete And Accurate Wage
Statements In Violation Of Labor Code §§ 226 Et Seq.,
6.
Violation Of The California Healthy Workplaces, Healthy
Families Act Per Labor Code §§ 245.5-248.5,
7.
For Sexual Discrimination In Violation Of Gov’t Code §§
12940 Et Seq.,
8.
For Sexual Harassment In Violation Of Gov’t Code §§
12940 Et Seq.,
9.
Failure To Prevent Discrimination, Harassment, And
Retaliation In Violation Of Gov’t Code § 12940(K),
10. For
Sexual Harassment Pursuant To Civil Code § 51.9
11. Violations
Of Business & Professions Code § 17200 Et Seq.
12. Retaliation
In Violation of Labor Code § 1102.5,
13. Negligent
Supervision, CACI 426,
14. Negligent
Hiring, Supervision, Or Retention Of Employee,
15. Negligent
Infliction of Emotional Distress, and
16. Intentional Infliction of Emotional Distress.
On April 14, 2022, Plaintiff/Cross-Defendant filed a demurrer without a Motion to Strike.
On July 26, 2022, Plaintiff filed Opposition papers. On August 01, 2022, Cross-Defendant filed a Reply.
On September 8, 2022, Cross-Complainant Humberto’s fifteenth
and sixteenth causes of action for Negligent Infliction of Emotional Distress
and Intentional Infliction of Emotional Distress were stricken pursuant to
Cross-Defendant’s Special Motion to Strike under CCP Section 425.16.
MEET AND CONFER REQUIREMENT
Before filing a demurrer, the demurring party is required to
meet and confer with the party who filed the pleading demurred, in person or
telephonically, to determine whether an agreement can be reached through a
filing of an amended pleading that would resolve the objections to be raised in
the demurrer. (Code Civ. Proc. (CCP) § 430.41.)
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.) To test 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.)
Discussion
I.
Humberto’s Cross Complaint is Non-Existent
Since
Cross-Complainant Humberto’s fifteenth and sixteenth causes of action have been
stricken, Cross-Defendant’s demurrer is moot
as to those causes of action.
Cross-Defendants
note the Cross-Complaint does not comply with California Rules of Court rule
2.112 which requires each separately stated cause of action, count, or defense
must specifically state its number, its nature, the party asserting it, and the
party or parties to whom it is directed. Therefore, Cross-Defendant does not
know if Cross-Complainant Humberto Morante is asserting causes of action
numbered one to fourteen.
Cross-Defendants
note that Defendant/Cross-Complainant Humberto was not and has never been an
employee of LRS or Eric Cano. Moreover, Humberto does not allege an employment
relationship with Cross-Defendants. Accordingly, Humberto cannot sustain any of
the first to fourteenth causes of action, to the extent they are asserted
against Cross-Defendants, because the causes of action arise out of an
employer-employee relationship.
In
their Opposition, Cross-Complainants’ acknowledge that the 1st through 14th
causes of action are not asserted by Humberto against Cross-Defendants.
Accordingly,
the demurrer as to the 1st to 14th causes of action as to Humberto Morante is sustained
without leave to amend since Cross-Complainants appear to acknowledge the
causes of action are asserted by Guadalupe alone and not Humberto.
Since
Humberto’s two remaining causes of action were already previously stricken, the
demurrer to Humberto’s entire Cross-Complaint is sustained without leave to
amend.
II.
Guadalupe’s COA Nos. 1 to 7 as asserted Against
Eric Cano
Cross-Complainant Guadalupe’s 1st to 7th and 9th to 14th causes of action are asserted against all Cross-Defendants, including Eric Cano.
Guadalupe’s 1st to 7th causes of action all allege Labor Code Violations which can only be asserted against an employer and not an individual. In Martinez v. Combs (2010), the California Supreme Court found that under the Industrial Welfare Commission’s definition of “employer” individual corporate agents acting within the scope of their agency cannot be individually liable for unpaid wage claims. (Martinez v. Combs (2010) 49 Cal.4th 35, 75.) In this case, the Cross-Complaint does explicitly assert that Eric Cano is Guadalupe’s employer under causes of action numbers 1 to 7. As the Court must accept allegations as true for purposes of demurrer, the Court sustainS the demurrer with leave to amend as to the 1st to 7th causes of action against Cross-Defendant Cano.
III.
Guadalupe’s COA No. 9 Against Eric Cano
Guadalupe’s 9th cause of action for Failure to Prevent Discrimination, Harassment and Retaliation in violation under Government Code section 12940(k) states: “employers have an affirmative duty to take reasonable steps to prevent and promptly correct discriminatory and harassing conduct.” As stated above, Guadalupe does not assert that Erick Cano is her employer under the 9th cause of action or that he owed a duty to prevent the discrimination, harassment, or retaliation she allegedly endured.
Accordingly, the demurrer is sustained with leave to amend as to the 9th cause of action against Eric Cano.
IV.
Guadalupe’s COA No. 10 as asserted Against All
Cross-Defendants
Guadalupe’s 10th cause of action for Sexual Harassment is brought under Civil Code section 51.9 states:
“(a) A person is liable in a cause of
action for sexual harassment under this section when the plaintiff proves all
of the following elements:
(1)
There is a business, service, or professional relationship
between the plaintiff and defendant or the defendant holds himself or herself
out as being able to help the plaintiff establish a business, service, or
professional relationship with the defendant or a third party
[. . .]
(2)
The defendant has made sexual advances, solicitations, sexual
requests, demands for sexual compliance by the plaintiff, or engaged in other
verbal, visual, or physical conduct of a sexual nature or of a hostile nature
based on gender, that were unwelcome and pervasive or severe.
(3)
The plaintiff has suffered or will suffer economic loss or
disadvantage or personal injury, including, but not limited to, emotional
distress or the violation of a statutory or constitutional right, as a result
of the conduct described in paragraph (2)
[ . . .]
(d) The definition of sexual harassment and the standards for determining liability set forth in this section shall be limited to determining liability only with regard to a cause of action brought under this section.”
(Civ. Code § 51.9)
Cross-Defendant asserts that because the case is brought under section 51.9 of the Unruh Act, the Unruh Act does not apply to claims for sexual harassment in the employment context. (See Rojo v. Kliger (1990) 52 Cal.3d 65, 77 [“the Unruh Civil Rights Act has no application to employment discrimination.”].)
Because the Unruh Civil Rights Act does not cover harassment claims in the employment context, the demurrer to the 10th cause of action asserted against all Cross-Defendants is SUSTAINED WITHOUT LEAVE TO AMEND.
V.
Guadalupe’s COA No. 11 Against Eric Cano
Business and Professions Code section 17200 (“UCL”) prohibits “any unlawful, unfair or fraudulent business act or practice.” (Bus. & Prof. Code, § 17200; see Clark v. Superior Court (2010) 50 Cal.4th 605, 610.) To plead this statutory claim, the pleadings must state with reasonable particularity the facts supporting the statutory elements of the violation. (Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 619.)
“An unlawful business practice or act is an act or practice, committed pursuant to business activity, that is at the same time forbidden by law.” (Klein v. Earth Elements, Inc. (1997) 59 Cal.App.4th 965, 969.) “A business practice is unfair within the meaning of the UCL if it violates established public policy or if it is immoral, unethical, oppressive or unscrupulous and causes injury to consumers which outweighs its benefits.” (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1473.) In a private unfair competition law action, the remedies are “‘generally limited to injunctive relief and restitution.’” (Kasky v. Nike, Inc. (2002) 27 Cal.4th 939, 950.)
Cross-Defendants assert that Guadalupe fails to state sufficient facts to constitute a cause of action against Mr. Cano. Despite Guadalupe’s 11th cause of action being asserted against all Cross-Defendants, Guadalupe fails to name or make specific allegations against Eric Cano.
Therefore, the Demurrer is SUSTAINED WITH LEAVE TO AMEND as to the 11th cause of action against Eric Cano.
VI.
Guadalupe’s COA No. 12 Against Eric Cano
Guadalupe’s 12th cause of action asserts Retaliation in Violation of Labor Code 1102.5 which states:
“An employer, or any person acting on behalf of the employer, shall not make, adopt, or enforce any rule, regulation, or policy preventing an employee from disclosing information to a government or law enforcement agency, to a person with authority over the employee, or to another employee who has authority to investigate, discover, or correct the violation or noncompliance, or from providing information to, or testifying before, any public body conducting an investigation, hearing, or inquiry, if the employee has reasonable cause to believe that the information discloses a violation of state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation, regardless of whether disclosing the information is part of the employee’s job duties.”
(Lab. Code § 1102.4)
As stated above, Guadalupe does not assert that Eric Cano is her employer and fails to allege any facts, whatsoever, as to how Eric Cano is liable for violations of Labor Code section 1102.4.
Accordingly, the demurrer as to the 12th cause of action as asserted against Eric Cano is SUSTAINED WITH LEAVE TO AMEND.
VII.
Guadalupe’s COA No. 15 Against All
Cross-Defendants
California courts have repeatedly recognized that Negligent Infliction of Emotional Distress (NIED) is not an independent tort, but the tort of negligence such that the traditional elements of duty, breach of duty, causation, and damages apply. (See, e.g., Spates v. Dameron Hospital Association (2003) 114 Cal.App.4th 208, 213; Marlene F. v. Affiliated Psychiatric Medical Clinic, Inc. (1989) 48 Cal.3d 583, 588.)
In the Cross-Complaint, Guadalupe alleges that Cross-Defendants caused her to suffer serious emotional distress, that the Cross-Defendants were negligent, and that the Cross-Defendants’ negligence was a substantial factor in causing Guadalupe serious emotional distress. Cross-Defendants assert that because Guadalupe’s NIED claim arises out of the employment context it is subject to demurrer because workers’ compensation is the exclusive remedy for injuries arising out of negligent conduct in the employment context. (See Livitsanos v. Superior Court (1992) 2 Cal.4th 744, 754 [“An employee who suffers a disabling emotional injury caused by the employment is entitled, upon appropriate proof, to workers' compensation benefits, including any necessary disability compensation or medical or hospital benefits.”].)
However, the California Supreme Court in Fermino v. Fedco (1994) acknowledged that:
“subsequent cases show, actions by employers that have no proper place
in the employment relationship may not be made into a ‘normal’ part of the
employment relationship merely by means of artful terminology. Indeed,
virtually any action by an employer can be characterized as a ‘normal part of
employment’ if raised to the proper level of abstraction.”
Fermino v. Fedco, Inc. (1994) 7 Cal.4th 701, 717 [30 Cal.Rptr.2d 18, 27, 872 P.2d 559, 568]
At issue is what specific conduct by Cross-Defendants caused
Guadalupe’s emotional distress, whether it was the Labor Code violations or the
sexual harassment. In Fretland v. County of Humbolt (1990), the Court of
Appeal found that an employee’s NIED cause of action was not barred by the
exclusivity remedy provision of the workers’ compensation laws, since such
discrimination was not a normal risk of the employment relationship.” (Fretland v. County of Humboldt (1999)
69 Cal.App.4th 1478, 1492; see also Maynard v. City of San Jose (9th
Cir. 1994) 37 F.3d 1396, 1405, [noting that California’s
Workers’ Compensation Act (WCA) did not preempt an employee’s IIED and NIED
claims that arose out of conduct that implicated fundamental principles of
public policy.].)
Accordingly, Cross-Defendants demurrer to 15th cause of action is SUSTAINED WITH LEAVE TO AMEND.
Conclusion
Humberto Morante’s Cross-Complaint is DISMISSED as no causes of actions remain asserted by Humberto Morante.
Cross-Defendants’ demurrer to Guadalupe’s 1st to 7th, 9th, 11th, and 12th causes of action asserted against Eric Cano is SUSTAINED WITH LEAVE TO AMEND.
Cross-Defendants’ demurrer to Guadalupe’s 10th cause of action against all Cross-Defendants is SUSTAINED WITHOUT LEAVE TO AMEND.
Cross-Defendants’ demurrer to Guadalupe’s 11th cause of action against all Cross-Defendants is SUSTAINED WITH LEAVE TO AMEND.
Leave to amend is 20 days.
Plaintiff/Cross-Defendants to give notice.
The
parties are strongly encouraged to attend all scheduled hearings virtually or
by audio. Effective July 20, 2020, all matters will be scheduled virtually
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are strongly encouraged to use LACourtConnect for all their matters. All masking
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