Demurrer with Motion to Strike in NATHAN PETER RUNYON VS. PAYWARD, INC., A CALIFORNIA CORPORATION ET AL| Trellis.Law

On November 26, 2019 a Motion,Ex Parte was filed involving a dispute between Runyon, Nathan Peter, and Does 1-50, Inclusive, Ng, Kaiser, Payward, Inc., A California Corporation, for civil in the District Court of San Francisco County.

Preview
1 Pierce Bainbridge Beck Price & Hecht LLP
Andrew E. Calderon (SBN 316673)
2 acalderon@piercebainbridge.com ELECTRONICALLY
355 South Grand Avenue, 44th Floor F I L E D
3 Los Angeles, California 90071 Superior Court of California,
County of San Francisco
Tel: (213) 262-9333
4 Fax: (213) 279-2008 02/06/2020
Clerk of the Court
BY: EDNALEEN ALEGRE
5 Christopher N. LaVigne (NY Bar No. 4811121) Deputy Clerk
(Application for Admission Pro Hac Vice
6
Pending)
7 clavigne@piercebainbridge.com
277 Park Avenue, 45th Floor
8 New York, NY 10172
Tel.: (646) 694-9666
9 Fax: (646) 968-412
10 Attorneys for Defendants Payward,
Inc. d/b/a Kraken and Kaiser Ng
11

12
SUPERIOR COURT OF THE STATE OF CALIFORNIA
13 FOR THE COUNTY OF SAN FRANCISCO
14
NATHAN PETER RUNYON, an Case No. CGC-19-581099
15 individual
Assigned to the Hon. Ethan P. Schulman
16 Plaintiff, Courtroom: Room 302
17 v.
DECLARATION OF ANDREW
18 PAYWARD, INC., a California CALDERON IN SUPPORT OF
Corporation d/b/a/ KRAKEN; and DEFENDANTS PAYWARD, INC.
19 KAISER NG, an individual; and D/B/A KRAKEN’S AND KAISER
DOES 1 through 10, inclusive NG’S NOTICE OF DEMURRER
20 AND DEMURRER TO FIRST
Defendants. AMENDED COMPLAINT AND
21
MOTION TO STRIKE
22
[Filed Concurrently with [Proposed]
23 Order and Demurrer and Motion to
Strike]
24
Hearing Date: March 5, 2020
25
Hearing Time: 9:30 am
26 Location: Rm. 302
Reservation ID: 02040305-17
27
Compl. filed: November 26, 2019
28
–1–
Declaration of Andrew E. Calderon
1 DECLARATION OF ANDREW E. CALDERON

2 I, Andrew E. Calderon, declare as follows:

3 1. I am an attorney with Pierce Bainbridge Beck Price & Hecht LLP, counsel of

4 record for Defendants Payward, Inc., d/b/a Kraken, and Kaiser Ng (collectively “Defendants”)

5 in this action. I am admitted to the State Bar of California and am authorized to practice before

6 this Court.

7 2. I make this Declaration in support of Defendants’ Demurrer to Plaintiff Nathan

8 Peter Runyon’s Complaint (the “Demurrer”) and Motion to Strike and pursuant to Defendant’s

9 meet and confer obligations under California Code of Civil Procedure Sections 430.41 and

10 435.5.

11 3. Plaintiff served Defendants with his complaint on November 27, 2019.

12 4. On December 18, 2019, Plaintiff sent Defendants a letter announcing his intent

13 to conduct forensic inspections of the computer hard drives, peripheral storage devices, e-mail

14 accounts, Slack accounts, laptops, and cell phones belonging to Mr. Ng and two Kraken

15 executives who are not individual parties to this lawsuit. A true and correct redacted copy of

16 Plaintiff’s December 18, 2019 letter is attached hereto as Exhibit 1.

17 5. On December 19, 2019, Defendants sent Plaintiff a meet and confer letter that

18 identified with legal support the deficiencies in Plaintiff’s complaint subject to demurrer and a

19 motion to strike and sought to meet and confer telephonically regarding these motions. A true

20 and correct copy of Defendants’ December 19, 2019 letter is attached hereto as Exhibit 2.

21 6. On December 27, 2019, Plaintiff sent Defendants a letter responding to

22 Defendants’ grounds for filing a demurrer and motion to strike. A true and correct copy of

23 Plaintiff’s December 27, 2019 letter is attached hereto as Exhibit 3.

24 7. Later on December 27, 2019, the parties met and conferred telephonically

25 regarding Defendants’ intent to file a demurrer and motion to strike and regarding Plaintiff’s

26 requested discovery. Plaintiff agreed to amend his complaint by January 6, 2020 to remove

27 Defendant Kaiser Ng as a defendant from Plaintiff’s Second, Fourth, Fifth, Seventh, Eighth,

28 Ninth, and Tenth Causes of Action. The parties also discussed and resolved certain discovery
–1–
Declaration of Andrew E. Calderon
1 issues. However, the parties were unable to reach an agreement that would resolve the

2 remaining grounds for demurrer and motion to strike raised by Defendants’ December 19 meet

3 and confer letter. The parties agreed that, since Plaintiff was only dropping certain causes of

4 actions against Mr. Ng, after Plaintiff filed his amended complaint, Defendants would file a

5 demurrer and motion to strike the amended complaint and both parties would reassert their

6 arguments set forth during the parties’ December 27 meet and confer. Plaintiff agreed to meet

7 and confer promptly after service of the amended complaint in the interest of expediting

8 Defendants’ filing of these motions.

9 8. On January 6, 2020, Plaintiff emailed Defendants a non-conformed copy of his

10 First Amended Complaint (“FAC”). Defendants did not consent to electronic service. Plaintiff

11 indicated that a hard copy would follow in the mail. Defendants had not been served via mail

12 with the FAC as of January 20, 2020.

13 9. Defendants reviewed the non-conformed copy of the FAC. As expected, the

14 FAC removed Defendant Kaiser Ng as a defendant from Plaintiff’s Second, Fourth, Fifth,

15 Seventh, Eighth, Ninth, and Tenth Causes of Action, but the pleading deficiencies addressed

16 in Defendants’ December 19, 2019 meet and confer letter remained. Defendants drafted a

17 second meet and confer letter that removed arguments regarding improper claims against Mr.

18 Ng, removed an argument that Plaintiff’s IIED claim was preempted by the Worker’s Comp

19 Exclusivity Rule, and added additional supporting case law. Defendants emailed Plaintiff their

20 revised meet and confer letter on January 20, 2020. A true and correct copy of Defendants’

21 January 20, 2020 meet and confer letter is attached hereto as Exhibit 4.

22 10. In a subsequent email exchange, Defendants alerted Plaintiff that as of January

23 21, 2020, the Defendants had not been served with the FAC. Plaintiff responded that he had

24 mailed a conformed copy of the FAC but would re-send a copy if necessary and he would

25 prepare a written response to Defendants’ January 20, 2020 letter. A true and correct copy of

26 the parties’ December 29, 2019 through January 21, 2020 email correspondence is attached

27 hereto as Exhibit 5.

28 11. Counsel for Defendants received the FAC via mail on January 22, 2020.
–2–
Declaration of Andrew E. Calderon
1 12. On January 28, 2020, Defendants received via email Plaintiff’s letter response

2 to Defendants’ January 20 meet and confer letter. In contrast to the collegial tone and

3 agreement between the parties during the December 27, 2019 telephonic meet and confer,

4 Plaintiff’s written response took a different tone and was clearly intended to attempt to create

5 a particular record divorced from the history of past communication between the parties. The

6 parties had already met and conferred in writing and by telephone on the disputes that are the

7 subject of Defendants’ demurrer and motion to strike and agreed that the parties were at

8 impasse. Despite that the FAC only dropped certain claims against Defendant Ng and

9 otherwise did not amend or alter the allegations or claims from the initial complaint, and

10 despite the parties’ agreement to expeditiously meet and confer after the filing of the FAC and

11 to reiterate their respective arguments as to Defendants’ remaining grounds for demurrer and

12 to strike, Plaintiff’s January 28 letter unfairly implies Defendants have not complied with their

13 meet and confer obligations and threatens to seek attorneys’ fees from Defendants. A true and

14 correct copy of Plaintiff’s January 28, 2020 meet and confer letter is attached hereto as Exhibit

15 6.

16 13. On January 31, 2020, the parties met and conferred telephonically and were

17 unable to reach an agreement that would resolve the remaining arguments to be raised by

18 Defendants’ demurrer and motion to strike. The parties discussed a timeline for the filing of

19 Defendants’ demurrer and motion to strike.

20 14. Defendants have satisfied their obligation under California Code of Civil

21 Procedure Sections 430.41 and 435.5 by meeting and conferring with Plaintiff in good faith to

22 attempt to resolve Defendants’ objections to Plaintiff’s FAC informally.

23 I declare under penalty of perjury under the laws of the State of California that the

24 foregoing is true and correct and that it was executed on February 6, 2020 in Los Angeles,

25 California.

26
___________________________
27 Andrew E. Calderon
28
–3–
Declaration of Andrew E. Calderon
EXHIBIT 1
December 18, 2019
VIA EMAIL ONLY
Christopher N. LaVigne
Andrew Calderón
277 Park Avenue, 45th Floor
New York, NY 10172
clavigne@piercebainbridge.com
acalderon@piercebainbridge.com

Re: Pete Runyon v. Payward, Inc. dba Kraken, et. al.
Dear Mr. LaVigne,
In accordance with California Rules of Court Rule 3.724 (8) we are writing to you in an effort to
meet and confer before Plaintiff propounds any discovery seeking ESI, scheduling a forensic inspection
into Messrs. , Ng and ’s computer’s hard drive and peripheral storage devices (disks and
backup tapes), thumb drives, e-mail accounts, Slack accounts, laptops and cell phones and setting
depositions. However, before we engage in the ESI meet and confer process, we wanted to propose that
the parties retain a joint (neutral) expert to manage the collecting, culling, reviewing, analyzing and
preparing of all electronically stored information. Considering the obvious disparities in the few
documents we received from Kraken in comparison to the ones in our client’s possession we believe we
will need an expert to ascertain the authenticity of various key documents,
emails and communications. We assume your client will want to challenge these allegations and this can
only be done with the use of a forensic expert. By utilizing a joint expert we will not only save our
respective client’s time and resources but also support the interest in preserving judicial economy.

Please advise if your clients will stipulate to appoint a joint eDiscovery expert no later than close
of business on Friday, December 20, 2019.

Law Offices of Claire Cochran, P.C.

Claire Cochran
Founder and Principal

cc: Pete Runyon

100 Pine Street, Suite 1250, San Francisco, California 94111 | 415-580-6019 | claire@clairecochranlegal.com
EXHIBIT 2
Christopher N. LaVigne
Andrew Calderón
355 S. Grand Avenue, 44th Floor
Los Angeles, CA 90071
acalderon@piercebainbridge.com
(213) 262-9333

VIA (E)MAIL

December 19, 2019

Claire Cochran
Law Offices of Claire Cochran
100 Pine Street, Suite 1250
San Francisco, CA 94111
(415) 580-6019
claire@clairecochranlegal.com

Re: Defendants’ Demurrer to and Motion to Strike Allegations in Plaintiff’s Complaint
(Runyon v. Payward, et al., Case No. CGC-19-581099)

Dear Ms. Cochran,
Defendants Payward, Inc. d/b/a Kraken and Kaiser Ng intend to file a demurrer to several causes
of action and a motion to strike several allegations in Plaintiff Nathan Runyon’s Complaint. In an effort
to comply with the meet and confer obligations under California Code of Civil Procedure Sections
430.41 and 435.5, this letter (1) identifies the causes of action subject to, and the legal basis for,
demurrer, and (2) identifies the allegations subject to, and the legal basis for, a motion to strike.
I. Causes of Action Subject to Demurrer
Plaintiff’s Second, Third, Fourth, Fifth, Sixth, and Seventh Causes of Action: Plaintiff fails to
plead non-conclusory facts in support of his disability-related FEHA claims that Plaintiff had a
qualifying disability under the FEHA and that Defendants had notice of it. Gov. Code § 12926(j)(1);
Avila v. Cont’l Airlines, Inc., 165 Cal. App. 4th 1237, 1248 (Ct. App. 2d Dist. 2008), as modified on
denial of reh’g (Aug. 28, 2008) (“Vague or conclusory statements revealing an unspecified incapacity
are not sufficient to put an employer on notice of its obligations under the [FEHA].”).
Plaintiff’s Fifth Cause of Action: Plaintiff’s FEHA retaliation claim is subject to demurrer for
the additional reason that Plaintiff fails to plead non-conclusory facts that he engaged in a qualifying
protected activity by discovering and reporting alleged discrepancies with employee stock option vesting
schedules. Gov. Code § 12926(j)(1); Gov. Code § 12940(h).
Plaintiff’s Eighth Cause of Action: Plaintiff’s claim for breach of the covenant of good faith and
fair dealing is subject to demurrer because the covenant does not support tort damages in the
employment context and Plaintiff fails to plead any contractual provision of his employment agreement

Pierce Bainbridge Beck Price & Hecht LLP
BOS | CLE | DC | LA | NY
Claire Cochran
December 19, 2019
Page 2

that was violated. Shoemaker v. Myers, 52 Cal. 3d 1, 24 (1990); Foley v. Interactive Data Corp., 47 Cal.
3d 654, 690, 700 (1988).
Plaintiff’s Ninth Cause of Action: Plaintiff’s claim for wrongful termination in violation of
Labor Code Section 1102.5 should be dismissed because he fails to identify a law, rule, or regulation
that was violated by Defendants, even assuming Plaintiff’s allegations regarding employee stock option
vesting irregularities are true, and therefore fails to sufficiently allege that he engaged in a protected
activity under § 1102.5. Ross v. County of Riverside, 36 Cal. App. 5th 580, 592 (2019).
Plaintiff’s Tenth Cause of Action: Similarly, Plaintiff fails to state a claim for wrongful
termination in violation of public policy because Plaintiff fails to identify an actionable public policy
that was violated by his termination. Foley v. Interactive Data Corp., 47 Cal. 3d 654, 670-671 (1988);
Hunter v. Up–Right, Inc., 6 Cal. 4th 1174, 1186 (1993); Turner v. Anheuser-Busch, Inc., 7 Cal. 4th
1238, 1257 (1994).
Plaintiff’s Eleventh Cause of Action: Plaintiff’s claim for intentional infliction of emotional
distress fails because this claim is precluded by the workers’ compensation exclusivity rule. Cal. Labor
Code § 3601(a) & 3602(a); Vasquez v. Franklin Management Real Estate Fund, Inc., 222 Cal. App. 4th
8190, 832-833 (2013). Additionally, Plaintiff fails to identify factual allegations that rise to the level of
outrageous and extreme conduct required by this tort. Cornell v. Berkeley Tennis Club, 18 Cal. App. 5th
908, 945 (2017); Vasquez, 222 Cal. App. 4th at 832.
Plaintiff’s Second, Fourth, Fifth, Seventh, Eighth, Ninth, and Tenth Causes of Action as to
Defendant Ng: These causes of action should be dismissed against Ng because individual employees,
including supervisors, are not liable as a matter of law for FEHA discrimination or § 1102.5 claims or
for actions performed in the scope of employment. Reno v. Baird, 18 Cal. 4th 640, 644-663 (1998);
Jones v. Lodge at Torrey Pines P’ship, 42 Cal. 4th 1158, 1173, 177 P.3d 232 (2008); United States v.
CardioDx, Inc., 2019 WL 2163002 at *13 (N.D. Cal. May 17, 2019).
II. Allegations Subject to Motion to Strike
The following allegations should be stricken from the Complaint because they are not essential
to any claim or to establish jurisdiction and are included solely because they sound salacious and are
designed to prejudice Defendants, garner press, or pressure Kraken into settling this matter. Cal. Code
Civ. Pro. §§ 436(a); 431.10(b)-(c).
Page 2, Paragraph 2, Line 15: “703 Market Street, 7th and 11th floors . . . .”
Page 4, Paragraph 18, Lines 19-Page 5, Line 3: “For the first week Runyon worked at Kraken he
trained under Employee “1” the US Controller to help Runyon better understand the financials and the
layout of the company. It soon became apparent that the Controller was not very competent because he
asked Runyon for help understanding simple finance questions such as “what causes the price of bitcoin
to go up and down” (market supply/demand), “who owns the blockchain” (he thought it was a physical
chain of blocks held in a vault somewhere, instead of a distributed ledger), and he thought there was 1-
Claire Cochran
December 19, 2019
Page 3

sided accounting (instead of 2 sided = debits and credits). Runyon helped educate Employee “1” on the
supply and demand concept of Bitcoin pricing and helped him understand how cryptocurrency works.
Kraken’s accountant, Employee “2” and Ng were present for several of these conversations with
Employee “1” and Runyon.”
Page 5, Paragraph 19, Lines 4-10: “Within less than a week at Kraken, Ng agreed to separate
Runyon’s work from Employee “1”’s and informed Employee “1” that Runyon did not report to him nor
could tasks be assigned to him. Runyon even created an automated reconciliation tool for Employee “1”
to use that automatically matched debits with credits. Within a few months Employee “1” was
terminated as it was revealed through Runyon’s competency and work performance that Employee “1”
had a significant lack of understanding of the company and how to operate the accounting team.”
Page 5, Paragraph 21, Lines 22-24: “. . . . after Ng expressed concern that Employee “3,” did not
have the code skills she claimed. In late December 2018, Ng suggested to Runyon that he look into code
school because he believed Employee “3” lied that about her skills with Python and Sequel.”
Page 6, Paragraph 23, Lines 22, 27-28: “for applications for banks and regulators” and “on legal,
licensing and banking documents[.]”
Page 7, Paragraph 23, Lines 7-9: “The attorney explained that Jesse Powell, CEO did the same
thing to her by using her apartment address and never compensated her with the agreed upon rent.”
Page 7, Paragraph 24, Lines 9-13: “In April 2018, Runyon posted in the Slack channel
suggestion box that Kraken remove the gendered bathrooms. Ng pulled Runyon aside and told him that
not everyone thought his joke was funny. Runyon defended himself and explicitly stated that his
recommendation was not a joke and that Kraken should make the bathroom non-gender specific.
Runyon later discovered Ng. contemplated firing Runyon for this suggestion because they considered
Runyon a ‘Liability.’”
Page 7, Paragraph 25: “In the summer of 2018, Runyon put the suggestion into the #SF-Office-
Suggestions channel on Slack that the internet ports need to be changed. Christina Yee (“Yee”) (the
girlfriend to the CEO, Jesse Powell), Head of KX/Kraken Experience, responded that the appearance of
the office was more important that the functionality and Kraken would not be changing the ports. After a
few months of nothing being changed along with extraordinarily poor and slow internet connections in
the office, Runyon suggested to Kraken’s IT Specialist, Employee “4” via Slack that not having good
connections was “a pain in the ass to deal with” because it severely and negatively impacted Runyon’s
work and caused delays. For example, meetings were routinely delayed because the internet connections
would take nearly ten minutes to work. Additionally, Runyon was routinely late to call into meetings
because the connections were not working.”
Page 8, Paragraph 26, Lines 8-11: “Ng asked Runyon inside his office and began to yell at
Runyon about how he could not talk to Yee in that manner and whether Runyon understood that Yee
Claire Cochran
December 19, 2019
Page 4

and the CEO Jesse Powell (“Powell”) were dating. Ng warned him that because of this relationship
Runyon needed to be careful about what he said to the CEO’s girlfriend.”
Page 8, Paragraph 27, Lines 12-20: “A couple weeks later, during Ng and Runyon’s weekly 1-
on-1 meeting Ng asked Runyon if he ever heard “rumors” that Yee and Powell were dating. Runyon was
confused by the question as it was Ng who told Runyon the CEO and Head of KX were dating. Ng
explained how Runyon should not listen to those rumors because it was false. Ng’s eyes darted back and
forth at his phone as if it were on speaker for the listener to hear Ng’s directive and Runyon’s response.
Runyon felt incredibly uncomfortable as Ng was clearly contradicting himself and was behaving
strangely. Runyon later discovered that Powell and Yee’s relationship could not be public given their
roles as officers and major shareholders of Kraken as this created a conflict of interest and issues with
the SEC.”
Page 8, Paragraph 28, Lines 21-Page 9, Line 9: “On February 20, 2019, at 1:15 p.m. Runyon sent
an email to Kraken’s Compliance Officer, Steve Christie (“Christie”), along with a link to a country list
to check on the countries that Kraken earned revenue from. Runyon was concerned about how Kraken
aligned the countries for revenue reporting and mostly worried that Kraken could not operate in those
countries for revenue reporting and mostly worried that Kraken could not operate in those countries.
Runyon made numerous requests to Christie in person and via Slack messages to seek clarification on
revenue alignment for each region regarding the topic. Runyon believed that Kraken could not receive
revenue from many of the countries they did business with. Runyon explained to Christie in person
(approximately five separate occasions) and on slack (three separate occasions) that some of the
countries and businesses that Kraken received revenue from were on the United States Department of
the Treasury’s Office of Foreign Assets Control Specially Designated Nationals and Blocked Persons
List (“OFAC List”). Runyon also raised these same concerns to Ng numerous times in person and on
slack. On a slack channel with NG, Christie and Runyon, Runyon continued to ask Christie for his
assistance in reviewing the OFAC List. Christie never responded and Ng never pursued the subject with
Christie or Runyon. Runyon also raised this issue to Ng numerous times in their weekly meetings. Ng
reassured Runyon that he would follow up with Christie and “it would be resolved.” Runyon realized
that Christie would never address his questions and concerns about this subject and Ng’s lack of concern
spoke volumes. Runyon eventually figured out that he should drop the issue to avoid further frustrating
Ng.”
Page 9, Paragraph 29, Lines 10-20: “In March 2019, Ng asked Runyon to help with reconciling
the bank balances with the customer balances in Kraken’s system. This involved Runyon looking into
Kraken’s System and looking up the total expected customer and operating account balances for U.S.
Dollars, British pounds, Canadian Dollars, Japanese Yen, Korean Won and Euros, then comparing that
with Kraken’s actual bank balances. Runyon discovered that Kraken’s bank balances were short of
customer deposits. After a thorough matching of deposits and withdrawals, Runyon concluded the bank
accounts were short millions of dollars, but more research was needed to clarify why there was still a
discrepancy. Runyon brought this to Ng’s attention during weekly meetings and implored Ng to
Claire Cochran
December 19, 2019
Page 5

investigate where the missing funds are. Runyon was concerned that someone hacked into the system or
found a loophole and was able to bleed the funds. In response, Ng immediately removed Runyon from
working on the project after his discovery.”
Given our deadline to respond to the Complaint, and the upcoming holiday, please let us know
when you are available, tomorrow, December 20, 2019, to discuss the matters set forth above, as well as
the issues raised in your December 18, 2019 letter.
Sincerely,

_______________________
Christopher N. LaVigne
Andrew E. Calderón
EXHIBIT 3
December 27, 2019
VIA EMAIL ONLY

Christopher N. LaVigne
Andrew Calderón
355 S. Grand Avenue, 44th Floor
Los Angeles, CA 90071
clavigne@piercebainbridge.com
acalderon@piercebainbridge.com

Re: Pete Runyon v. Payward, Inc. dba Kraken, et. al.
Dear Mr. Lavigne,
This correspondence will serve as a response to your meet and confer letter provided to
counsel on December 19, 2019 at 8:20 p.m. As you are aware, we responded to your meet and
confer efforts and offered to provide an extension of time to respond due to the holidays. You
declined this offer. As such, we are providing this response.

It must be noted at the onset that there was some misinformation in the email
correspondence. While it is true that the complaint that was filed and served was not “identical”
to the one provided in the demand letter, what is true is that it is largely identical. The point of
this distinction is to not get bogged down by this tangent but to identify that you had every
opportunity to address many of the alleged deficiencies and related issues before the complaint
was even filed. You did not. We have filed. And now we are here having to discuss the merits
of the pleadings during this timeline.

We will respond to the letter in the order it was provided. At the outset, we have
concerns with the tone and manner in which this is being presented. While there are some minor
issues that could have been sorted out during the course of the litigation, the manner in which
this is being presented smacks of gamesmanship and an intent to proceed in a litigious manner.
Of course, we hope that this is not correct and that both parties can reach a resolution in the most
expeditious manner.

Response to Causes of Action Subject to Demurrer

1. You assert that Plaintiff’s Second, Third, Fourth, Fifth, Sixth and Seventh Causes
of Action are subject to demurrer because Plaintiff pled non-conclusory facts in support of his
disability related FEHA claims. In support, you cite Avila v. Cont’l Airlines, Inc., 165
Cal.App.4th 1237 (2008) for the assertion that “vague or conclusory statements revealing an

-1-
100 Pine Street, Suite 1250, San Francisco, California 94111 | 415-580-6019 | claire@clairecochranlegal.com
unspecified incapacity to put an employer on notice of its obligations”. Plaintiff disagrees with
this statement and the application of this case. Avila was a finding under summary judgment, not
demurrer. In addition, California FEHA cases do not have a heightened pleading standard but
rather “‘the plaintiff is required only to set forth the essential facts of his case’ ‘with particularity
sufficient to acquaint a defendant with the nature, source and extent of his cause of action.’” Alch
v. Superior Ct., 122 Cal.App.4th 339, 382 (2004). If you have support for the assertion that
FEHA claims require a heightened pleading standard, please provide it. As it stands, Plaintiff’s
claims are properly pled.

2. You assert that Plaintiff’s Fifth Cause of Action is similarly deficient because
“Plaintiff fails to plead non-conclusory allegations…”. Plaintiff refers you to the response
provided supra as to the pleading standards and requirements relating to FEHA and California
standards. Again, if there is legal support for this argument, please provide it for our
consideration. As it stands, Plaintiff’s claim is properly pled.

3. You assert that Plaintiff’s Eighth Cause of Action is subject to demurrer because
Plaintiff fails to “plead any contractual provision of his employment provision.” A review of
Plaintiff’s complaint identifies that he entered into an agreement when he began his employment,
see Complaint ¶ 100. Further, the complaint identifies in the allegations the changes to the terms
of his employment, which were incorporated by reference, see Complaint ¶ 99. Unless you have
a legal basis for the assertion regarding the purported deficiencies in Plaintiff’s Complaint,
Plaintiff’s Complaint is sufficient for this stage of litigation.

4. You assert that Plaintiff’s Ninth Cause of Action is subject to demurrer because –
and this is somewhat difficult to ascertain – that even assuming arguendo that the vesting
allegations are true, Plaintiff’s claim is subject to a demurrer because he did not allege a specific
law, regulation and the like. In support, you cite Ross v. County of Riverside, 36 Cal.App.5th
580 (2019) for support. A review of Ross indicates that this is a case that was at the summary
judgment phase of litigation and that the court reversed to permit the case to continue. Id. at 593.
Again, if there is a legal basis for your assertion at the pleading and responsive phase, please
provide it for our review.

5. You assert that Plaintiff’s Tenth Cause of Action for wrongful termination in
violation of public policy fails to assert a public policy violated by his termination. Even a
cursory review of his complaint, which was incorporated by reference, identifies several claims
and policies that were violated in the course of his termination. More specifically, Plaintiff pled
a violation of Labor Code § 1102.5, as well as other policies that were implicated during the
course of his termination. Complaint ¶¶ 111-113.

6. You assert that Plaintiff’s Eleventh Cause of Action is subject to the Workers’
Compensation Privilege. Claims of intentional infliction of emotional distress based on
intentional infliction of emotional district are not subject to workers’ compensation exclusivity.
See Light v. Dept. of Parks & Recreation, 14 Cal.App.5th 75, 101 (2017).

-2-
100 Pine Street, Suite 1250, San Francisco, California 94111 | 415-580-6019 | claire@clairecochranlegal.com
7. You assert that Plaintiff’s Second, Fourth, Fifth, Seventh, Eighth, Ninth and Tenth
Causes of Action are not subject to supervisor liability. Plaintiff concedes that the individual
supervisor, Ng, is not subject to liability for the claims for discrimination and retaliation. The
issue as to Labor Code § 1102.5 is not settled, as identified in the case provided by Defendants.
In an effort to further this litigation, Plaintiffs will agree to amend his complaint to remove the
individual Defendant Ng from these claims and will conduct appropriate discovery to ascertain
the extent of individual liability and culpability.

Motion to Strike

Plaintiff has reviewed the allegations in the letter and your assertions that these are
subject to a motion to strike for the reasons asserted. In short, these assertions appear
disingenuous. By way of example, the statement regarding the business address is to address
venue and jurisdiction issues. Further, the other allegations are carefully crafted to develop the
concerns Plaintiff was experiencing that ultimately became the basis for his claims.

Plaintiff has diligently reviewed these allegations and does not agree with the
characterization.

We look forward to working this out amicably and proceeding to reaching an efficient
conclusion.

Law Offices of Claire Cochran, P.C.

Claire Cochran
Founder and Principal

cc: Pete Runyon

-3-
100 Pine Street, Suite 1250, San Francisco, California 94111 | 415-580-6019 | claire@clairecochranlegal.com
EXHIBIT 4
Christopher N. LaVigne
Andrew Calderón
355 S. Grand Avenue, 44th Floor
Los Angeles, CA 90071
acalderon@piercebainbridge.com
(213) 262-9333

VIA (E)MAIL

January 20, 2020

Claire Cochran
Law Offices of Claire Cochran
100 Pine Street, Suite 1250
San Francisco, CA 94111
(415) 580-6019
claire@clairecochranlegal.com

Re: Defendants’ Demurrer and Motion to Strike Plaintiff’s First Amended Complaint
(Runyon v. Payward, et al., Case No. CGC-19-581099)

Dear Ms. Cochran,
Defendants Payward, Inc. d/b/a Kraken and Kaiser Ng intend to file a demurrer to several causes
of action and a motion to strike several allegations in Plaintiff Nathan Runyon’s First Amended
Complaint (“FAC”). Pursuant to California Code of Civil Procedure Sections 430.41 and 435.5, this
letter (1) identifies the causes of action subject to, and the legal basis for, demurrer, and (2) identifies the
allegations subject to, and the legal basis for, a motion to strike.
I. Causes of Action Subject to Demurrer
Plaintiff’s Second, Third, Fourth, Fifth, Sixth, and Seventh Causes of Action: Plaintiff fails to
plead non-conclusory facts in support of his disability-related FEHA claims that Plaintiff had a
qualifying disability under the FEHA and that Defendants had notice of it. Gov. Code § 12926(j)(1); see
Rope v. Auto-Chlor System of Washington, Inc., 220 Cal. App. 4th 635, 659 (2013) (affirming demurrer
to FEHA disability discrimination claim where plaintiff failed to “demonstrate an impairment that
constitutes a physical disability according to the statutory definition”) (overturned on other grounds); see
also Avila v. Cont’l Airlines, Inc., 165 Cal. App. 4th 1237, 1248 (2008), as modified on denial of reh’g
(Aug. 28, 2008) (“Vague or conclusory statements revealing an unspecified incapacity are not sufficient
to put an employer on notice of its obligations under the [FEHA].”).
Plaintiff’s Fifth Cause of Action: Plaintiff’s FEHA retaliation claim is subject to demurrer for
the additional reason that Plaintiff fails to plead non-conclusory facts that he engaged in a qualifying
protected activity by discovering and reporting alleged discrepancies with employee stock option vesting
schedules. Gov. Code § 12926(j)(1); Gov. Code § 12940(h).

Pierce Bainbridge Beck Price & Hecht LLP
BOS | CLE | DC | LA | NY
Claire Cochran
January 20, 2020
Page 2

Plaintiff’s Eighth Cause of Action: Plaintiff’s claim for breach of the covenant of good faith and
fair dealing is subject to demurrer because the covenant does not support tort damages in the
employment context and Plaintiff fails to plead any contractual provision of his employment agreement
that was violated. Shoemaker v. Myers, 52 Cal. 3d 1, 24 (1990); Foley v. Interactive Data Corp., 47 Cal.
3d 654, 690, 700 (1988).
Plaintiff’s Ninth Cause of Action: Plaintiff’s claim for wrongful termination in violation of
Labor Code Section 1102.5 should be dismissed because he fails to identify a law, rule, or regulation
that was violated by Defendants, even assuming Plaintiff’s allegations regarding employee stock option
vesting irregularities are true, and therefore fails to sufficiently allege that he engaged in a protected
activity under § 1102.5. Ross v. County of Riverside, 36 Cal. App. 5th 580, 592 (2019).
Plaintiff’s Tenth Cause of Action: Similarly, Plaintiff fails to state a claim for wrongful
termination in violation of public policy because Plaintiff fails to identify an actionable public policy
that was violated by his termination. Foley v. Interactive Data Corp., 47 Cal. 3d 654, 670-671 (1988);
Hunter v. Up–Right, Inc., 6 Cal. 4th 1174, 1186 (1993); Turner v. Anheuser-Busch, Inc., 7 Cal. 4th
1238, 1257 (1994).
Plaintiff’s Eleventh Cause of Action: Plaintiff fails to state a claim for intentional infliction of
emotional distress because he fails to identify factual allegations that rise to the level of outrageous and
extreme conduct required by this tort. See Vasquez v. Franklin Management Real Estate Fund, Inc., 222
Cal. App. 4th 8190, 832-833 (2013) (“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.”); see also Fisher, 214 Cal. App. 3d at 617-618 (affirming a
demurrer to an employee’s IIED claim where the alleged acts “are mere indignities or threats and do not
evidence behavior beyond the bounds of decency”).
II. Allegations Subject to

Case Info

Judge

Samuel K. Feng Track Judge’s New Case

Case No.

(Subscribe to View)

Document Filed Date

February 06, 2020

Case Filing Date

November 26, 2019

County

Parties

CALDERON, ANDREW E. Attorney for the Defendant
COCHRAN, CLAIRE E. Attorney for the Plaintiff
DOES 1-50, INCLUSIVE Defendant
EMPLOYEE 5 Other
FORD, BRENDAN M. Attorney
LAVIGNE, CHRISTOPHER N. Attorney for the Defendant
NG, KAISER Defendant
PAYWARD, INC., A CALIFORNIA CORPORATION Defendant
RUNYON, NATHAN PETER Plaintiff
STEVENS, GREGORY W. Attorney for the Plaintiff
Natalie Xifo Attorneys for Plaintiffs
Kimberly Pallen Attorneys for Defendants
Claire Eberhard Attorney
Howard Strong Attorneys for Plaintiffs
Eduardo Dominguez Attorney
Aaron Minnis Attorney
Christopher Layne Attorney

For full print and download access, please subscribe at https://www.trellis.law/.

Motion,Ex Parte: NATHAN PETER RUNYON VS. PAYWARD, INC., A CALIFORNIA CORPORATION ET AL

Preview

Related Topics

Case Info

Parties