Judge Yolanda Orozco, Case 21STCV45605 2022-08-05 Tentative Ruling

Judge: Yolanda Orozco, Case: 21STCV45605, Date: 2022-08-05 Tentative Ruling

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Case Number: 21STCV45605 Hearing Date: August 5, 2022 Dept: 31

DEMURRER IS OVERRULED, IN PART; WITH MOTION TO STRIKE IS DENIED

Background

On December 14, 2021, Plaintiff James Parton filed a Complaint alleging twelve causes of action arising from his employment with Defendants U.S. Telepacific Corporation dba TPx communications and Chaneen Bilan. The Complaint alleges:

1. Disability Discrimination

2. Failure to Reasonably Accommodate a Disability

3. Failure to Engage in the Good Faith Interactive Process

4. Retaliation in Violation of the Fair Employment and Housing Act (FEHA)

5. Retaliation for Exercising Right Afforded to an Employee (Cal. Lab. Code §98.6)

6. Violation of the California Family Rights Act (CFRA)

7. Retaliation for Leave Under the California Family Rights Act (CFRA)

8. Failure to Issue Accurate Itemized Wage Statements

9. Failure to Indemnify and Reimburse in Violation of Cal. Lab. Code §§ 2802

10. Failure to Pay Wages Due Upon Termination, Waiting Time Penalties

11. Unlawful Business Practices in Violation of California Business & Professions Code §§17200, et seq.

12. Defamation/Slander per se

On March 4, 2022, Defendant filed a Demurrer and Motion to Strike as to the Complaint.

On July 15, 2022, Defendant filed a Reply

The hearing on the Demurrer and Motion to Strike was continued, so that Plaintiff could file Opposition papers with the Court. Plaintiff filed Opposition papers on July 21, 2022.

Meet and Confer Requirement

Defense counsel, Jenay N. Younger, attests to her efforts to meet and confer with Plaintiff’s counsel regarding the alleged deficiencies in the Complaint. (Younger Decl. Exh. A, B, C, and D.) Thus, the meet and confer requirements for filing a demurrer or motion to strike have been met. (Code of Civ. Proc., § 430.41.)¿

Legal Standard

A demurrer for sufficiency tests whether the complaint states a cause of action. (See Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. (Wilson v. Transit Authority of City of Sacramento (1962) 199 Cal.App.2d 716, 720-21.) 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 pleading alone, and not on the evidence or facts alleged.” (E-Fab, Inc. v. Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) As such, the court assumes the truth of the complaint’s properly pleaded or implied factual allegations. (Id.) However, it does not accept as true deductions, contentions, or conclusions of law or fact.¿(Stonehouse Homes LLC v. City of Sierra Madre (2008) 167 Cal.App.4th 531, 538.) A demurrer may be sustained “only¿if the complaint fails to state a cause of action under any possible legal theory.” (Sheehan v. San Francisco 49ers, Ltd.¿(2009) 45 Cal.4th 992, 998.)¿¿

Any party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof. (Code of Civ. Proc., § 435(b)(1); Cal. Rules of Court (CRC), Rule 3.1322(b).) The court may, upon a motion or at any time in its discretion and upon terms it deems proper: (1) strike out any irrelevant, false, or improper matter inserted in any pleading; or (2) strike out all or any part of any pleading not drawn or filed in conformity with the laws of California, a court rule, or an order of the court. (Code of Civ. Proc., § 436, subds. (a)-(b); Stafford v. Shultz (1954) 42 Cal.2d 767, 782 [“Matter in a pleading which is not essential to the claim is surplusage; probative facts are surplusage and may be stricken out or disregarded”].)¿¿

“Where the defect raised by a motion to strike or by demurrer is reasonably capable of cure, leave to amend is routinely and liberally granted to give the plaintiff a chance to cure the defect in question.” (CLD Construction, Inc. v. City of San Ramon (2004) 120 Cal.App.4th 1141, 1146.)The burden is on the complainant to show the Court that a pleading can be amended successfully. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.)¿

Discussion

1. Demurrer

Defendant demurrers to Plaintiff’s eighth, ninth, tenth, and eleventh cause of action on the basis that the facts in the Complaint fail to state sufficient facts and are uncertain.

a. Eighth COA: Failure to Issue Accurate Itemized Wage Statements

Under Labor Code § 226(a), employers are required to provide accurate itemized wage statements “that include: 1) gross wages earned; (2) total hours worked; (3) certain information for employees paid on a piece-rate basis; (4) all deductions; (5) net wages earned; (6) the pay period; (7) the employee's name and identifying information; (8) ‘the name and address of the legal entity that is the employer; and (9) all applicable hourly rates.” (Savea v. YRC Inc. (2019) 34 Cal.App.5th 173, 178, citing Lab. Code, § 226(a).) Section 226 also requires that the employee suffer an injury as a result of the employer knowing and international failure to comply with subdivision (a). (Lab. Code § 226(e)(1). “An employee is deemed to suffer injury for purposes of this subdivision if the employer fails to provide a wage statement.” (Lab. Code § 226(e)(2)(A).)

In his Complaint, Plaintiff alleges:

· “Defendant implemented an employment practice whereby it failed to provide Plaintiff with accurate wage statement and records, including but not limited to pay stubs recording all hours worked, paychecks representing all wages earned, wage statements or itemized stubs showing hourly wage, (or piece meal rate), tips, overtime, bonus, vacation, as well as any employment deductions for all hours worked. Defendant’s failure to provide or maintain accurate record of meal and rest breaks specifically injured Plaintiff by depriving Plaintiff of all wages and earnings earned.” (Compl. ¶ 95.)

· “Defendants have willfully and intentionally violated California Labor Code § 226(a) Complaint.” (Id. ¶ 96.)

Plaintiff states that his wage statement failed to list all hours worked, all wages earned, and any deductions made. Taking all of Plaintiff’s allegations as true for purposes of a demurrer, the Court finds that Plaintiff has alleged sufficient facts to sustain a cause of action for violation of Cal. Lab. Code Section 226(a).

Therefore, Defendant’s Demurrer as to the eighth cause of action is OVERRULED.

b. Ninth COA: Failure to Indemnify and Reimburse Business Expenses

Labor Code Section 2802 requires an employer to indemnify and reimburse employees for job-related business expenses that are necessary for the employee to discharge his or her duties. (See Grissom v. Vons Companies, Inc. (1991) 1 Cal.App.4th 52, 57–58.) “[B]efore an employer's duty to reimburse is triggered, it must either know or have reason to know that the employee has incurred an expense. Once the employer has such knowledge, then it has the duty to exercise due diligence and take any and all reasonable steps to ensure that the employee is paid for the expense.”(Stuart v. RadioShack Corp. (N.D. Cal. 2009) 641 F.Supp.2d 901, 904.)

In his Complaint, Plaintiff alleges he began working for Defendant on or about August 2019 as a Senior Business Consultant. (Compl. ¶ 6.) Plaintiff was an exempt employee. (Id. ¶ 1.) Plaintiff had requested reimbursement for employment-related expenses on numerous occasions “for monies he advanced on his employer’s behalf in order to perform his job duties.” (Id. ¶ 7.) “After numerous attempts to obtain reimbursement, in September of 2020, Plaintiff threatened legal action against his employer if they would not repay him and on September 30, 2020, an attorney sent a letter on Plaintiff’s behalf to obtain repayment. As of the present date, not all monies owed to Plaintiff have been reimbursed.” (Id.)

The Court finds that Plaintiff has articulated sufficient facts to sustain a cause of action for violation of Section 2802. Contrary to Defendant’s contention, Plaintiff is not required to provide a detailed list of all expenses incurred and when they were incurred. Plaintiff is only required to plead sufficient facts to appraise Defendant of the nature of Plaintiff’s claim.

Defendant claims that any statutory penalties are time-barred under the one-year statute of limitations pursuant to CCP Section 340(a). Plaintiff states that the one-year statute of limitations has not run because the time limit begins when Plaintiff was terminated, not when he went on medical leave. (Opp. at 5:22-27.) Moreover, Plaintiff asserts that labor code violations have a three-year statute of limitations under CCP Section 338(a) because it is “[a]n action upon a liability created by statute.” The Court agrees.

Therefore, Defendant’s demurrer to Plaintiff’s ninth cause of action is OVERRULED.

c. Tenth COA: Failure to Pay Wages Due Upon Termination (Waiting Time Penalties)

Labor Code Section 201 and 202 requires employers to pay wages immediately to employees who get terminated or who resign with 72-hours notice. Otherwise, employers are liable to pay a waiting time penalty equal to the worker’s daily rate of pay for each day late, up to 30 days. (Lab. Code § 203, see also Naranjo v. Spectrum Security Services, Inc. (2022) 13 Cal.5th 93, 106 (Noting “Section 203 penalties for willful delays in the payment of end-of-employment wages are commonly referred to as “waiting time penalties.”].)

Plaintiff alleges that he was terminated by Defendant and that Defendant “willfully and intentionally failed to provide Plaintiff with all wages owed at the time of termination.” (Compl. ¶¶ 12, 108.) Consequently, “Plaintiff is owed for 30 days of waiting time penalties.” (Id. ¶ 108.)

Defendant argues that Plaintiff erroneously included causes of action for “unpaid wages, overtime, or missed meal and rest periods” and seeks reimbursements for unpaid expenses, which are not considered wages. (Younger Decl. at ¶ 3.) Defendant relies on Hagin v. Pacific Gas & Elec. Co. (1957), in support of this proposition, but Hagin only held that the plaintiff’s right to unpaid expenses depended on the interpretation of a collective bargaining agreement. (152 Cal.App.2d 93, 98.) On a demurrer, any defects in the complaint must be apparent on its face. (See Donabedian, supra, 116 Cal.App.4th at 994.) Here, any alleged defect pointed out by Defendants is not apparent on the face of the Complaint.

Therefore, the Court finds Plaintiff has articulated sufficient facts to sustain a cause of action for violation of Lab. Code Section 201. Defendant’s demurrer to Plaintiff’s tenth cause of action is OVERRULED.

d. Eleventh COA: Unlawful Business Practices in Violation of Cal. Bus. & Prof. Code § 17200, et seq.

California’s Unfair Competition Law (UCL) prohibits “any unlawful, unfair or fraudulent business act or practice.” (Bus. & Prof. Code, § 17200 et seq; 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 his Complaint, Plaintiff alleges that the unfair law or practice is the violation of “the aforementioned statutes and regulations,” presumably violations of the FEHA, CFRA, and the Labor Code. (Compl. ¶ 110.) Plaintiff also alleges that the unfair practice was Defendant’s violation of wage and hour laws committed repeatedly in a significant and systemic manner. (Id. ¶ 111.) The unfair practice was also Defendant’s violation of California’s law regarding maintaining records. (Compl. ¶ 1122.)

The Court finds that Plaintiff has failed to state with reasonable particularity what facts support his claim of unfair business practices by Defendant. Plaintiff’s recitation of the law and legal conclusion are insufficient to sustain his eleventh cause of action.

Therefore, Defendant’s demurrer to Plaintiff’s eleventh cause of action is SUSTAINED WITH LEAVE TO AMEND.

2. Motion to Strike

Defendant’s moves to strike Plaintiff’s prayer for relief under the tenth cause of action, failure to pay wages due upon termination, on the basis that the waiting time penalties are improper because they are based solely on Plaintiff’s claim for unreimbursed business expenses.

Defense counsel states, that during a telephonic meet and confer, Plaintiff’s counsel admitted that the tenth cause of action was based on unreimbursed business expenses and that any language regarding overtime and missed meal and rest breaks was left over from prior wage and hour Complaints. (Younger Decl. at ¶ 3.) Plaintiff does not address this point in its Opposition papers, but only opposes Defendant’s motion to strike on Defense counsel’s failure to include a memorandum and points of authorities setting forth the grounds for striking portions of the complaint.

The Court will not address defense counsel’s contentions about the viability of the tenth cause of action and will only look at the facts as alleged in the Complaint as it must, and accept properly pled facts as true for purposes of a demurrer. (See Daar v. Yellow Cab Co. (1976) 67 Cal.2d 695, 713.) Thus, the Court accepts as true that Plaintiff was owed wages upon his termination. Moreover, Defendant failed to cite any legal authority on point that expressly held that business expenses are not considered wages.

Accordingly, Defendant’s motion to strike Plaintiff’s tenth cause of action is DENIED.

Conclusion

Defendant U.S. Telepacific Corporation’s demurrer is OVERRULED as to Plaintiff’s eighth, ninth, and tenth causes of action. The Demurrer is SUSTAINED WITH 20 DAYS LEAVE TO AMEND as to Plaintiff’s eleventh cause of action.

Defendant’s Motion to Strike Plaintiff’s prayer for relief as to the tenth cause of action is DENIED.

Moving Party 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 and/or with audio through the Court’s LACourtConnect technology. The parties are strongly encouraged to use LACourtConnect for all their matters. All masking protocols will be observed at the Courthouse and in the courtrooms.