Preview
SUPERIOR COURT OF CALIFORNIA
COUNTY OF SAN FRANCISCO
MINUTES
March 11, 2020 Department: 302
NATHAN PETER RUNYON Case Number: CGC-19-581099
PLAINTIFF Nature of Cause:
DEFENDANTS PAYWARD, INC.
VS. D/B/A KRAKEN and KAISER NG’'s
DEMURRER TO 1ST AMENDED
PAYWARD, INC., A CALIFORNIA COMPLAINT
CORPORATION et al
DEFENDANT
Present:
Judge: ETHAN P. SCHULMAN Clerk: Gina Gonzales
Reporter: Maria A. Torreano CSR#8600, Bailiff: Deputy Lopes
email: maria.torreano@gmail.com
Appearing for Plaintiff (s): Appearing for Defendant(s):
Claire Cochran, Esq. Christopher N. LaVigne, Esq.
LAW OFFICES OF CLAIRE COCHRAN Andrew Calderon, Esq.
T:415.580.6019 PIERCE BAINBRIDGE BECK PRICE &
HECHT LLP
T:646.694.9666 / T:213.246.2656
RULING: The matter was argued. At the conclusion of arguments, the Court adopted its
tentative ruling on DEFENDANT PAYWARD, INC. D/B/A KRAKEN, KAISER NG’s
DEMURRER TO 1ST AMENDED COMPLAINT as follows:
Defendants Payward and Ng’s demurrer is overruled as to the second through tenth causes of
action, and is sustained with 20 days leave to amend as to the eleventh cause of action.
Case Number: CGC-19-581099
Case Title: NATHAN PETER RUNYON VS. PAYWARD, INC., A CALIFORNIA
CORPORATION ET AL
-1- Date: March 11, 2020
Form: C01006
Defendants’ demurrer to all the FEHA causes of action on the basis of Plaintiff’s alleged
disability is overruled. “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.) Plaintiff’s allegations are sufficient, and Defendants do not cite authority holding
otherwise. First, Plaintiff adequately alleges that he has a disability. “Runyon set up his [Human
Resources software system] and added his . . . disabled veteran status. Runyon has been
diagnosed with depression and anxiety.” (FAC ¶ 36; see also id. ¶ 39 [“depression, insomnia and
anxiety”].) Contrary to Defendants’ contention, Rope v. Auto-Chlor System of Washington, Inc.
(2013) 220 Cal.App.4th 635, superseded by statute on other grounds, does not support their
position, since there the plaintiff did not allege that he was physically disabled, but “only that he
anticipated becoming disabled for some time after the organ donation.” (Id. at 659.) Defendants
do not show that as a matter of law the conditions from which Plaintiff alleges he suffers are not
disabilities under FEHA. (See, e.g., Auburn Woods | Homeowners Ass’n v. FEHC (2004) 121
Cal.App.4th 1578, 1592-1593 [“Numerous cases under state and federal law have held that
depression and its related manifestations can meet the definition of disability under
antidiscrimination laws.”].) Defendants’ arguments raise issues of fact that are improper at this
stage. (See Kailikole v. Palomar Cmty. Coll. Dist. (S.D. Cal. 2019) 384 F.Supp.3d 1185, 1193
[“The Court declines to make a factual determination as to whether the Plaintiff’s anxiety was
severe enough to qualify” as a limit on major life activity in review of a motion to dismiss]; cf.
Higgins-Williams v. Sutter Medical Foundation (2015) 237 Cal.App.4th 78, 83-86 [case decided
on summary judgment, not at the demurrer stage].) In any event, Plaintiff adequately alleges that
his disability limited his ability to participate in a major life activity such as work. (See Soria v.
Univision Radio Los Angeles, Inc. (2016) 5 Cal.App.5th 570, 587 [where pleading adequately
put defendant on notice that plaintiff claimed discrimination based on an ailment that limited a
major life activity, it was defendant’s obligation through discovery to learn the factual grounds
for this theory of liability before moving for summary judgment].) Second, Plaintiff sufficiently
alleges defendants’ knowledge of his disability. “Kraken knew Plaintiff had a medical
disability.” (FAC ¶ 51; see also id. ¶ 36 [allegation that defendant Ng commented on plaintiff’s
disabled veteran status].) Defendants do not cite any authority supporting their argument that
more details, including how the employer had knowledge, are required at the pleading stage.
Defendants’ demurrer to the fifth cause of action for retaliation in violation of FEHA is
overruled. The court rejects Defendants’ argument that Plaintiff did not engage in protected
activity. Government Code section 12940(m) makes it an unlawful employment practice “[f]or
an employer or other entity covered by this part to, in addition to the employee protections
provided pursuant to subdivision (h), retaliate or otherwise discriminate against a person for
requesting accommodation under this subdivision, regardless of whether the request was
granted.” In enacting this provision in 2015, the Legislature made clear that a request for an
accommodation constitutes protected activity. (See Moore v. Regents of University of California
(2016) 248 Cal.App.4th 216, 245-246.) Defendant’s reliance on the holding in Moore (Dem. at
9) is misplaced, since the retaliation claim involved there arose out of conduct that occurred
before that amendment was enacted. (See id. at 246-248 [“Because the recent amendment is
prospective in application, in 2011, at the time Moore alleges Defendant engaged in the asserted
Case Number: CGC-19-581099
Case Title: NATHAN PETER RUNYON VS. PAYWARD, INC., A CALIFORNIA
CORPORATION ET AL
-2- Date: March 11, 2020
Form: C01006
retaliation, the law was consistent with the holding of Rope . . . .”].) Here, Plaintiff alleges that
in July 2019, he identified a medical condition and attempted to exercise his paid time off to
manage the side effects of his disability, and was terminated in retaliation for doing so. (FAC ¶¶
39, 76.)
Defendants’ demurrer to the eighth cause of action for breach of the covenant of good faith and
fair dealing is overruled. Defendants argue that termination in an at-will employment cannot be
the basis of a breach. However, Plaintiff also alleges that “Defendants . . . altered the terms and
conditions of Plaintiff’s employment through various new and different duties….” (FAC ¶ 100.)
Defendants provide no argument that such allegations are insufficient to state a claim. Thus, the
cause of action is not susceptible to demurrer, as Defendants fail to meet their burden to show
that no theory alleged is sufficient to support a breach of covenant claim. (See Quelimane Co. v.
Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 38 [“If the complaint states a cause of action
under any theory, regardless of the title under which the factual basis for relief is stated, that
aspect of the complaint is good against a demurrer.”]; Daniels v. Select Portfolio Servicing, Inc.
(2016) 246 Cal.App.4th 1150, 1167 [“Ordinarily, a general demurrer may not be sustained . . . as
to a portion of a cause of action.”].)
Defendants’ demurrer to the ninth cause of action for wrongful termination in violation of Labor
Code § 1102.5 is overruled. Plaintiff’s allegations are sufficient. “Plaintiff engaged in a protected
activity of reporting that the CEO’s decision to unilaterally make changes in the stock options
program . . . was illegal.” (FAC ¶ 105.) Defendants provide no support for their argument that
identification of a specific rule or statute that supports the illegality of the behavior complained
about is a pleading requirement. (Cf. Love v. Motion Industries, Inc. (N.D. Cal. 2004) 309
F.Supp.2d 1128, 1134-1135 [case decided on summary judgment].)
Defendants’ demurrer to the tenth cause of action for wrongful termination in violation of public
policy is overruled. “The relevant authorities both in California and throughout the country
establish that when an employer’s discharge of an employee violates fundamental principles of
public policy, the discharged employee may maintain a tort action and recover damages
traditionally available in such actions.” (Tameny v. Atl. Richfield Co. (1980) 27 Cal. 3d 167,
170.) Plaintiff’s claim here is termination for whistleblowing regarding allegedly illegal activity,
which is protected under Lab. Code § 1102.5. (FAC ¶ 112.) Defendants do not cite any authority
holding that § 1102.5’s protections, as a matter of law, are not ones of public policy, and ignore
on-point authority that holds otherwise. (See, e.g., Diego v. Pilgrim United Church of Christ
(2014) 231 Cal.App.4th 913, 922-23 [“the Supreme Court has stated that the purpose of section
1102.5(b) ‘is to “encourag[e] workplace whistle-blowers to report unlawful acts without fearing
retaliation.”’”]; McVeigh v. Recology S.F. (2013) 213 Cal.App.4th 443, 468 [“California's
general whistleblower statute . . reflects the broad public policy interest in encouraging
workplace whistle-blowers to report unlawful acts without fearing retaliation.”].)
Defendants’ demurrer to the eleventh cause of action for intentional infliction of emotional
distress is sustained with leave to amend. “In order to avoid a demurrer, the plaintiff must allege
with ‘great[ ] specificity’ the acts which he or she believes are so extreme as to exceed all bounds
of that usually tolerated in a civilized community.” (Vasquez v. Franklin Mgmt. Real Estate
Case Number: CGC-19-581099
Case Title: NATHAN PETER RUNYON VS. PAYWARD, INC., A CALIFORNIA
CORPORATION ET AL
-3- Date: March 11, 2020
Form: C01006
Fund, Inc. (2013) 222 Cal.App.4th 819, 832.) The complaint generally alleges only that
“Defendants engaged in outrageous . . . conduct.” (FAC ¶ 116.) Plaintiff’s opposition argues that
numerous acts are alleged throughout the complaint, and incorporated in the cause of action for
IIED, such as “being regularly harassed . . . being required to not sleep but take courses . . . [and]
being mocked….” (Plf.’s Opp. 15:11-13.) However, “[l]iability for intentional infliction of
emotional distress does not extend to mere insults, indignities, threats, annoyances, petty
oppressions, or other trivialities.” (Baker v. Fox & Assoc. (2015) 240 Cal.App.4th 333, 355; see
also Cornell v. Berkeley Tennis Club (2017) 18 Cal.App.5th 908, 945-946 [neither supervisor’s
“inappropriate but not severe” comments regarding plaintiff’s obesity nor his official actions rose
to the level of “outrageous conduct beyond the bounds of human decency”]; Janken v. GM
Hughes Electronics (1996) 46 Cal.App.4th 55, 80 [“personnel management decisions” cannot
support a claim of IIED even if undertaken with discriminatory motive].) These allegations fail
to constitute a cause of action for IIED. Plaintiff has 20 days leave to amend.
Order signed in open court.
Judge: Ethan P. Schulman; Clerk: Gina Gonzales; Court Reporter: Maria A. Torreano
CSR#8600, email: maria.torreano@gmail.com
Case Number: CGC-19-581099
Case Title: NATHAN PETER RUNYON VS. PAYWARD, INC., A CALIFORNIA
CORPORATION ET AL
-4- Date: March 11, 2020
Form: C01006
Preview
SUPERIOR COURT OF CALIFORNIA COUNTY OF SAN FRANCISCO MINUTES March 11, 2020 Department: 302 NATHAN PETER RUNYON Case Number: CGC-19-581099 PLAINTIFF Nature of Cause: DEFENDANTS PAYWARD, INC. VS. D/B/A KRAKEN and KAISER NG’'s DEMURRER TO 1ST AMENDED PAYWARD, INC., A CALIFORNIA COMPLAINT CORPORATION et al DEFENDANT Present: Judge: ETHAN P. SCHULMAN Clerk: Gina Gonzales Reporter: Maria A. Torreano CSR#8600, Bailiff: Deputy Lopes email: maria.torreano@gmail.com Appearing for Plaintiff (s): Appearing for Defendant(s): Claire Cochran, Esq. Christopher N. LaVigne, Esq. LAW OFFICES OF CLAIRE COCHRAN Andrew Calderon, Esq. T:415.580.6019 PIERCE BAINBRIDGE BECK PRICE & HECHT LLP T:646.694.9666 / T:213.246.2656 RULING: The matter was argued. At the conclusion of arguments, the Court adopted its tentative ruling on DEFENDANT PAYWARD, INC. D/B/A KRAKEN, KAISER NG’s DEMURRER TO 1ST AMENDED COMPLAINT as follows: Defendants Payward and Ng’s demurrer is overruled as to the second through tenth causes of action, and is sustained with 20 days leave to amend as to the eleventh cause of action. Case Number: CGC-19-581099 Case Title: NATHAN PETER RUNYON VS. PAYWARD, INC., A CALIFORNIA CORPORATION ET AL -1- Date: March 11, 2020 Form: C01006 Defendants’ demurrer to all the FEHA causes of action on the basis of Plaintiff’s alleged disability is overruled. “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.) Plaintiff’s allegations are sufficient, and Defendants do not cite authority holding otherwise. First, Plaintiff adequately alleges that he has a disability. “Runyon set up his [Human Resources software system] and added his . . . disabled veteran status. Runyon has been diagnosed with depression and anxiety.” (FAC ¶ 36; see also id. ¶ 39 [“depression, insomnia and anxiety”].) Contrary to Defendants’ contention, Rope v. Auto-Chlor System of Washington, Inc. (2013) 220 Cal.App.4th 635, superseded by statute on other grounds, does not support their position, since there the plaintiff did not allege that he was physically disabled, but “only that he anticipated becoming disabled for some time after the organ donation.” (Id. at 659.) Defendants do not show that as a matter of law the conditions from which Plaintiff alleges he suffers are not disabilities under FEHA. (See, e.g., Auburn Woods | Homeowners Ass’n v. FEHC (2004) 121 Cal.App.4th 1578, 1592-1593 [“Numerous cases under state and federal law have held that depression and its related manifestations can meet the definition of disability under antidiscrimination laws.”].) Defendants’ arguments raise issues of fact that are improper at this stage. (See Kailikole v. Palomar Cmty. Coll. Dist. (S.D. Cal. 2019) 384 F.Supp.3d 1185, 1193 [“The Court declines to make a factual determination as to whether the Plaintiff’s anxiety was severe enough to qualify” as a limit on major life activity in review of a motion to dismiss]; cf. Higgins-Williams v. Sutter Medical Foundation (2015) 237 Cal.App.4th 78, 83-86 [case decided on summary judgment, not at the demurrer stage].) In any event, Plaintiff adequately alleges that his disability limited his ability to participate in a major life activity such as work. (See Soria v. Univision Radio Los Angeles, Inc. (2016) 5 Cal.App.5th 570, 587 [where pleading adequately put defendant on notice that plaintiff claimed discrimination based on an ailment that limited a major life activity, it was defendant’s obligation through discovery to learn the factual grounds for this theory of liability before moving for summary judgment].) Second, Plaintiff sufficiently alleges defendants’ knowledge of his disability. “Kraken knew Plaintiff had a medical disability.” (FAC ¶ 51; see also id. ¶ 36 [allegation that defendant Ng commented on plaintiff’s disabled veteran status].) Defendants do not cite any authority supporting their argument that more details, including how the employer had knowledge, are required at the pleading stage. Defendants’ demurrer to the fifth cause of action for retaliation in violation of FEHA is overruled. The court rejects Defendants’ argument that Plaintiff did not engage in protected activity. Government Code section 12940(m) makes it an unlawful employment practice “[f]or an employer or other entity covered by this part to, in addition to the employee protections provided pursuant to subdivision (h), retaliate or otherwise discriminate against a person for requesting accommodation under this subdivision, regardless of whether the request was granted.” In enacting this provision in 2015, the Legislature made clear that a request for an accommodation constitutes protected activity. (See Moore v. Regents of University of California (2016) 248 Cal.App.4th 216, 245-246.) Defendant’s reliance on the holding in Moore (Dem. at 9) is misplaced, since the retaliation claim involved there arose out of conduct that occurred before that amendment was enacted. (See id. at 246-248 [“Because the recent amendment is prospective in application, in 2011, at the time Moore alleges Defendant engaged in the asserted Case Number: CGC-19-581099 Case Title: NATHAN PETER RUNYON VS. PAYWARD, INC., A CALIFORNIA CORPORATION ET AL -2- Date: March 11, 2020 Form: C01006 retaliation, the law was consistent with the holding of Rope . . . .”].) Here, Plaintiff alleges that in July 2019, he identified a medical condition and attempted to exercise his paid time off to manage the side effects of his disability, and was terminated in retaliation for doing so. (FAC ¶¶ 39, 76.) Defendants’ demurrer to the eighth cause of action for breach of the covenant of good faith and fair dealing is overruled. Defendants argue that termination in an at-will employment cannot be the basis of a breach. However, Plaintiff also alleges that “Defendants . . . altered the terms and conditions of Plaintiff’s employment through various new and different duties….” (FAC ¶ 100.) Defendants provide no argument that such allegations are insufficient to state a claim. Thus, the cause of action is not susceptible to demurrer, as Defendants fail to meet their burden to show that no theory alleged is sufficient to support a breach of covenant claim. (See Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 38 [“If the complaint states a cause of action under any theory, regardless of the title under which the factual basis for relief is stated, that aspect of the complaint is good against a demurrer.”]; Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1167 [“Ordinarily, a general demurrer may not be sustained . . . as to a portion of a cause of action.”].) Defendants’ demurrer to the ninth cause of action for wrongful termination in violation of Labor Code § 1102.5 is overruled. Plaintiff’s allegations are sufficient. “Plaintiff engaged in a protected activity of reporting that the CEO’s decision to unilaterally make changes in the stock options program . . . was illegal.” (FAC ¶ 105.) Defendants provide no support for their argument that identification of a specific rule or statute that supports the illegality of the behavior complained about is a pleading requirement. (Cf. Love v. Motion Industries, Inc. (N.D. Cal. 2004) 309 F.Supp.2d 1128, 1134-1135 [case decided on summary judgment].) Defendants’ demurrer to the tenth cause of action for wrongful termination in violation of public policy is overruled. “The relevant authorities both in California and throughout the country establish that when an employer’s discharge of an employee violates fundamental principles of public policy, the discharged employee may maintain a tort action and recover damages traditionally available in such actions.” (Tameny v. Atl. Richfield Co. (1980) 27 Cal. 3d 167, 170.) Plaintiff’s claim here is termination for whistleblowing regarding allegedly illegal activity, which is protected under Lab. Code § 1102.5. (FAC ¶ 112.) Defendants do not cite any authority holding that § 1102.5’s protections, as a matter of law, are not ones of public policy, and ignore on-point authority that holds otherwise. (See, e.g., Diego v. Pilgrim United Church of Christ (2014) 231 Cal.App.4th 913, 922-23 [“the Supreme Court has stated that the purpose of section 1102.5(b) ‘is to “encourag[e] workplace whistle-blowers to report unlawful acts without fearing retaliation.”’”]; McVeigh v. Recology S.F. (2013) 213 Cal.App.4th 443, 468 [“California's general whistleblower statute . . reflects the broad public policy interest in encouraging workplace whistle-blowers to report unlawful acts without fearing retaliation.”].) Defendants’ demurrer to the eleventh cause of action for intentional infliction of emotional distress is sustained with leave to amend. “In order to avoid a demurrer, the plaintiff must allege with ‘great[ ] specificity’ the acts which he or she believes are so extreme as to exceed all bounds of that usually tolerated in a civilized community.” (Vasquez v. Franklin Mgmt. Real Estate Case Number: CGC-19-581099 Case Title: NATHAN PETER RUNYON VS. PAYWARD, INC., A CALIFORNIA CORPORATION ET AL -3- Date: March 11, 2020 Form: C01006 Fund, Inc. (2013) 222 Cal.App.4th 819, 832.) The complaint generally alleges only that “Defendants engaged in outrageous . . . conduct.” (FAC ¶ 116.) Plaintiff’s opposition argues that numerous acts are alleged throughout the complaint, and incorporated in the cause of action for IIED, such as “being regularly harassed . . . being required to not sleep but take courses . . . [and] being mocked….” (Plf.’s Opp. 15:11-13.) However, “[l]iability for intentional infliction of emotional distress does not extend to mere insults, indignities, threats, annoyances, petty oppressions, or other trivialities.” (Baker v. Fox & Assoc. (2015) 240 Cal.App.4th 333, 355; see also Cornell v. Berkeley Tennis Club (2017) 18 Cal.App.5th 908, 945-946 [neither supervisor’s “inappropriate but not severe” comments regarding plaintiff’s obesity nor his official actions rose to the level of “outrageous conduct beyond the bounds of human decency”]; Janken v. GM Hughes Electronics (1996) 46 Cal.App.4th 55, 80 [“personnel management decisions” cannot support a claim of IIED even if undertaken with discriminatory motive].) These allegations fail to constitute a cause of action for IIED. Plaintiff has 20 days leave to amend. Order signed in open court. Judge: Ethan P. Schulman; Clerk: Gina Gonzales; Court Reporter: Maria A. Torreano CSR#8600, email: maria.torreano@gmail.com Case Number: CGC-19-581099 Case Title: NATHAN PETER RUNYON VS. PAYWARD, INC., A CALIFORNIA CORPORATION ET AL -4- Date: March 11, 2020 Form: C01006