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. 1 Gregory J. Wood (200780)
Leyla Pasic (250705)
2 WOOD ROBBINS, LLP
One Post St., Suite 800
3
San Francisco, Califomia 94104
4 T: (415) 247-7900
F:(415) 247-7901
5 lpasic@woodrobbins.com
6 Attorneys for Plaintiffs
7 JOSE J. MEJIA, MIGUEL OSUNA, and
OSCAR J. ALMAZAN-MARTINEZ
8 And Putative Class Members
9 IN THE SUPERIOR COURT OF CALIFORNIA
10 JN AND FOR THE COUNTY OF SACRAMENTO
11
12 JOSE J. MEJIA, MIGUEL OSUNA, and Case No.: 34-2016-00190824-CU-OE-GDS
OSCAR J. ALMAZAN-MARTINEZ,
13 individually and on behalf of others similarly
situated, MEMORANDUM OF_ POINTS AND-^
14-
AUTHORITIES IN OPPOSITION TO
15 DEMURRER
Plaintiffs,
16 Date: April 29, 2016
V. Time: 9:00 am
17 Dept.: 54
ROUSSOS CONSTRUCTION, INC.;
18
MATHEW HAWKINS, dba FOCUS
19 FLOORING; MICHAEL CHAVEZ dba
FLOORS UNLIMITED; J. TRINIDAD NINO
20 dba NINO'S CARPET, and
DOES 1tiirough100, inclusive,
21
22 Defendants.
23
24
Plaintiffs JOSE J. MEJIA, MIGUEL OSUNA, and OSCAR J. ALMAZAN-
25
MARTINEZ (collectively "Plaintiffs") respectfully submit this Memorandum of Points and
26
Autiiorities in Opposition to Defendants ROUSSOS CONSTRUCTION, INC., MATHEW
27
HAWKINS, dba FOCUS FLOORING, MICHAEL CHAVEZ dba FLOORS UNLIMITED, and
28
1
OPP'N TO DEF. DEM.
1 J. TRINIDAD NINO dba NINO'S CARPET (collectively "Defendants'") Demurrer. By tiiis
2 Opposition, Plaintiffs request that the Court OVERRULE Defendants' Demurrer.
3 I. INTRODUCTION
4 The instant Demurrer misconstmes applicable law, seeks to try the action on its merits,
5 and, as a procedural matter, should have been resolved informally. For these reasons,
6 Defendants' Demurrer should be overmled. In the altemative. Plaintiffs should be granted leave
7 to amend the Complaint.
8 Defendants and their counsel should be sanctioned in the amount of $ 7,650.00 for
9 failing to satisfy the meet and confer requirements of Cal. Civ. Proc. Code § 430.41, for failing
10 to resolve informally, and forfilingafiivolousDemurrer and Motion to Strike,
11 n. FACTS
12 On or about October 23, 2015, Plaintiffs JOSE J. MEJIA, MIGUEL OSUNA, and
13 OSCAR J. ALMAZAN-MARTINES (collectively "Plaintiffs")filedtiieirComplaint for
14- Daraages-and Injimctive-Relief on belwlf of thems'elS^s and'all^imilai-ly-situated floom^
15 installers in Califomia who performed work for one or more of the Defendantsfi-omOctober
16 2001 to the present, in the Alameda Coimty Superior Court. Complaint ^ 16, October 23, 2015.
17 Plaintiffsfiledtheir First Amended Complaint ("FAC") on January 19, 2016. Venue was
18 subsequently transferred to Sacramento County on or about Febmary 25, 2016.
19 On March 16, 2016, Defendants Hawkins, Chavez, and Nino met and conferred with
20 Plaintiffs' coimsel regarding the sufficiency of the FAC. But Defendant Roussos Constmction,
21 Inc. did not. Plaintiffs attempt to informally resolve the instant dispute with all Defendants but
22 none of them responded.'
23 HI. ARGUMENT
24 A. Standard on General Demurrer
25 Defendants' Demurrer should be overmled because Plaintiffs have alleged facts
26 sufficient to survive a general demurrer. When considering a demurrer, it "is wholly beyond the
27 scope of thie inquiry to ascertain whether the facts stated are tme or untme." Garton v. Title Ins.
28 ' A fuller discussion of these facts can be found in the Argument Section. See infra Part III.D.
2
OPP'N TO DEF. DEM.
1 & Trust Co., 106 Cal. App. 3d 365, 375 (1980). Fortiiepurposes oftiie demurrertiietrial court
2 must "assume the tmth of the complaint's properly pleaded or implied factual allegations."
3 Bonis Restaurant Design, Inc. v. Serrano, 134 Cal. App. 4th 1035, 1038 (2005); see Garton, 106
4 Cal. App. 3d at 375 (holding that on demurrer, the defendant effectively admits "all material,
5 issuable facts properly pleaded in the complaint, however improbable they may be"); see also
6 Gould V. Maryland Sound Industries. Inc., 31 Cal. App. 4tii 1137, 1144 (1995) ("[Djefendants
7 cannot set forth allegations of fact in their demurrers which, if trae, would defeat plaintiffs
8 complaint."). Furthermore, in mling on a demurrer, the trial court must "give the complaint a
9 reasonable interpretation, reading it as a whole and its parts in context. Blank v. Kirwan, 39 Cal.
10 3d 311, 318 (2012).
11 A defendant may demur to a complaint on the ground that the pleading does not state
12 facts sufGcient to constitute a cause of action. Cal. Civ. Proc. Code § 430.10(e). In order to
13 survive a demurrer on that ground, "[a] complaint must allege the ultimate facts necessary to the
14- statement of mi actionable-claim;''"Careai/tfeC Security PacT Business, Credit, Inc., 222
15 Cal. App. 3d 1371,1390 (1994).
16 B. California Business & Professions Code § 7031
17 Defendants argue "Plaintiffs' claims for compensation are barred under Business &
18 Professions Code § 7031, which precludes an action by unlicensed contractors." Defendants'
19 Memorandum of Points and Authorities in Support of Demurrer, at 7:2-3, Mar. 24, 2016
20 [hereinafter Dem.]. But Defendants fail to come to grips with one ofthe numerous exception to
21 this Code, which include the exception for "employees."
22 The exception for employees explains, that "this chapter" which includes section 7131,
23 "does not apply to any person who engages in the activities herein regulated as an employee"
24 Cal. Bus. & Prof. Code § 7053 (emphasis added). In short, the contractor's licensing law does
25 not allow employers to abuse their employees just by calling them "contractors" and then
26 demanding they get a contractor's license. That is not how Califomia Labor law works.
27 Here, Plaiotiffs have alleged that even though they were unlicensed, they were
28 nevertheless employed by the Defendants; that Defendants directiy and indirectiy exercised
OPP'N TO DEF. DEM.
1 control over their wages, hours, work, and conditions of employment; that Defendants
2 misclassified Plaintiffs as independent contractors; and that Defendants failed to properly
3 compensate them. See e.g., FAC at 23-41; see also Cal. Bus. & Prof Code § 7053
4 (providing an exception for an "employee who receives wages as his or her sole compensation,
5 does not customarily engage in an independently established business, and does not have the
6 right to control or discretion as to the manner of performance so as to determine thefinalresults
7 of the work performed"). Because Plaintiffs have alleged they were employees, which
8 allegations must be taken as tme for purposes of ruling on the demurrer, they need not, as a
9 matter of law, also "allege (and prove) they were licensed contractors." Dem. at 7:3-4.
10 Defendants cite to Fillmore v. Irvine, arguing that Plaintiffs may not take advantage of
11 the presumption of employee status embedded in Cal. Lab. Code § 2750.5. Dem. at 8-9.^ But
12 Fillmore did not decide a demurrer. It was an adjudication of facts after the conclusion of a trial.
13 Fillmore v. Irvine, 146 Cal. App. 3d 649, 651-52 (1983). The issue, here—on demurrer—does
-14"^ not involve Defendants arguing Tlie^ facts as they hope and^ay they might be.
15 Moreover, Fillmore stands for the somewhat narrow proposition "that Labor Code
16 section 2750.5 is not applicable to determinations of whether one is an employee or unlicensed
17 contractor under Business and Professions Code sections 7031 and 7053." Fillmore v. Irvine,
18 146 Cal. App. 3d 649, 657 (1983). In short, Cal. Lab. Code § 2750.5tiiatotiierwise provides a
19 "rebuttable presumption . . . that a worker performing services for which a [contractor's]
20 license is required . . . is an employeeratherthan an iadependent contractor" no longer applies
21 in any case in which a plaintiff seeks "compensation." See Hurst v. Buczek Enterprises, LLC,
22 870 F. Supp. 2d 810, 817 (N.D. Cal. 2012) ("Fillmore heldtiiat2750.5 does not apply in tiie
23 context of suits for unpaid 'compensation for the performance of any act or contract.' Instead, it
24 applies to, e.g., classification for worker's compensation purposes, pension plans, torts, etc."
25 (citation omitted)). But whether Plaintiffs in the Instant Case can teike advantage of § 2750.5's
26
27 ^ In the uncited block quote of page 9 of their brief. Defendants quote to language regarding the standard for "leave
to amend" which suggests this language was takenfromFillmore. Dem. at 9:15-21. It was not. This block quote
28 comesfroma case called Hepe. See Hepe v. Paknad, 199 Cal. App. 3d 412, 421 (1988). Hepe is a motorcycle
accident case, not a labor law case.
OPP'N TO DEF. DEM,
1 "presumption" of employee status or not is largely academic. Better than resting on some legal
2 presumption, Plaintiffs here have actually allegedfacts that support their claim that they were
3 employees. See e.g., FAC H 23, 25, 36-39. The Court need not presume anything when Plaintiff
4 allege facts in a complaint, that on demurrer, this Court must presume to be tme. Defendants'
5 misplaced reUance on Fillmore illustrates not only Defendants' misinterpretation of the law, but
6 also, the prematurity of their argument.
7 C. Fraud/Intentional Misrepresentation
8 1. The Tenth Cause of Action is Not Preempted Under the "New Right-
Exclusive Remedy" Doctrine.
9
Defendants argue that Plaintiffs' Tenth Cause of Action for Fraud/Intentional
10
Misrepresentation fails under the "New Right-Exclusive Remedy" because it is simply
11
duplicative and, thus, pre-empted by the Labor Code. Dem. 10:1-9. But the allegations in the
12
Tenth Cause of Action, are not, in fact duplicative.
13
Plaintiffs' 10''' Cause of Action for Fraud/Mentwnal ^fe^g)I5sentationJp^cif^
14-
alleges facts showing Defendants' wrongful conduct, other than their Labor Code violations.
15
The chief allegation is that Plaintiffs were deceived into believing they would be paid per square
16
foot of yard they installed or sold to customers, when in fact. Defendants never intended to pay
17
them so. FAC ^ 102. Instead, Defendants intentionally and improperly deductedfromthe
18
square footage installed or sold by Plaintiffs by misrepresenting that less materials were used, or
19
that repairs needed to be done to their work, or that work assignments were not completed. Id.
20
Thus, Plaintiffs are owed money not just under the Labor Code because they were misclassified
21
as independent contractors, but due tofi:Budulentdeductionsfromthe square foot of materials
22
Plaintiffs installed and sold. Put differentiy, even if no Labor Code violations are ultimately
23
found to have occurred. Plaintiffs may still prevail on their Tenth Cause of Action due to
24
Defendants'fraudulentdeductionsfromthe measure of materials.
25
Finally, since a demurrer does not lie to only a portion of a cause of action, any portion
26
of the allegations that state a claim will save a cause of actionfroma demurrer. See Kong v. City
27
ofHawaiian Gardens Redevelop. Agency, 108 Cal. App. 4"' 1028, 1046 (2003). Thus, any
28
OPP'N TO DEF. DEM.
1 portion of the Tenth Cause of Action which is not premised on violations ofthe Labor Code,
2 saves the cause of action from a demurrer on the ground that the claim is preempted. The
3 demurrer on this ground, thus, must be overmled.
4 2. The 10''' Cause of Action for Fraud/Intentional Misrepresentation is Not
Fatally Uncertain.
5
Finally, Defendants contend that the Tenth Cause of Action for Fraud/Intentional
6
Misrepresentation fails because it is not pleaded with the requisite specificity. Dem. 11:10-12.
7
But this argument fails like the others.
8
Whenfiiaudis alleged, the elements that must be pleaded are: "(a) misrepresentation
9
(false representation, concealment or nondisclosure); (b) knowledge of falsity (or 'scienter'); (c)
10
intent to defiiaud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damages.
11
Philipson & Simon v. Gulsvig, 154 Cal App. 4tii 347, 363 (2007). Plaintiffs have alleged each
12
element of this cause of action. Plaintiffs allege twelve (12) specific misrepresentations made
13
by defendants, andjeach_ofthem"_to_the_Plaintiffs,-satisfying the first element—FAG T[-101r5ee
14
also Murphy v. BDO Seidman, LLP, 113 Cal. App. 4tii 687, 692 (2003). Plaintiffs allege tiiat
15
those representations were false and that "Defendants, at the time they made the representations
16
set forth above, knew them to be false and intended to, and did, induce Plaintiffs' reliance upon
17
those false representations," thus satisfying the second and third elements of the cause ofaction.
18
FAC 102. Plaintiffs allege they "reasonably relied upon the tmth of the aforementioned
19
statements and representations ia entering iato and continuing in an employment relationship
20
with Defendants according to the terms estabhshed by Defendants. Plaintiffs' reliance was a
21
substantial factor in causing economic harm," thus satisfying the fourth element ofthe cause of
22
action. FAC f 104. Finally, Plaintiffs allege that as a result of these misrepresentations, they
23
have suffered, and wUl continue to suffer, economic injuries. FAC ^ 105. See also Furia v.
24
Helm, 111 CA4th 945, 956 (2003) (finding allegations offiiaudsurvive demurrer even when it
25
fails to allege specific dollar amount).
26
Importantly, the requirement of "particularity" in pleadingfiaudshould not be overdone.
27
If complaints are too detailed (e.g., setting forth each statement verbatim, specifying the time.
28
OPP'N TO DEF. DEM.
1 place and medium by which made), they may provide less effective notice, and be less useful in
2 filming the issues, than would a shorter, more generahzed version. Committee on Children's
3 Television, Inc. v. General Foods Corp., 35 C3d 197, 217 (1983) (superseded by statute on other
4 grounds). "Thus the pleading should be sufficient 'to enable the court to detennine whether, on
5 the facts pleaded, there is any foundation, prima facie at least, for the charge offi^ud.'"Id.
6 Finally, an exception to the strict pleading standard is recognized when it appears that
7 the facts Ue more within defendant's knowledge than plaintiffs: i.e., less specificity is required
8 where "defendant must necessarily possess full information conceming the facts of the
9 confroversy." Id. at 216. Here, Defendants themselves concede that these facts lie more within
10 their knowledge. As they have conceded, "a demurrer as to the Tenth Cause of Action should
11 be sustained with leave to amend only if Plaintiffs detemiine, after conducting discovery that
12 facts exist to support such a Cause of Action for Fraud/intentional misrepresentation." Dem.
13 12:23-25. Because Plaintiffs make these allegations on behalf of a class of similarly situated
14" flooring installers who worked for Defendants, undoubtedly the relevant information is more
15 within the Defendants' knowledge.
16 D. Sanctions
17 "A trial court may order a party, the party's attomey, or both to pay the reasonable
18 expenses, including attomey's fees, incurred by another party as a result of bad-faith actions or
19 tactics that arefiivolousor solely intended to cause unnecessary delay." Cal. Civ. Proc. Code §
20 128.5 (a). '"Actions or tactics' include . . . the making or opposing of motions " Cal. Civ.
21 Proc. Code § 128.5(b)(1). "'Frivolous' means totally and completely without merit or for the
22 sole purpose of harassing an opposing party." Cal. Civ. Proc. Code § 128.5(b)(2). Sanctions
23 are proper wherefiivolousgrounds are a "significant and material part" ofthe motion. Bach v.
24 McNeils, 207 Cal. App. 3d 852, 875 (1989). Relevant totiiisMotion, "Beforefilinga demurrer.
25 .. the demurring party shall meet and confer in person or by telephone with the party who filed
26 the pleading that is subject to demurrer for the purpose of detemiining whether an agreement
27 can be reached that would resolve the objections to beraisedin the demurrer." Cal. Civ. Proc.
28 Code §430.41.
OPP'N TO DEF. DEM.
1 Here, on March 16, 2016, counsel for Defendant Mathew Hawkins emailed a meet and
2 confer letter to Plaintiffs' counsel purporting to address the deficiencies ofthe FAC as required
3 by Cal. Civ. Proc. Code § 430.41. LetterfromJeannine I. Maldonado, Esq. to Leyla Pasic, Esq.,
4 Mar. 11, 2016, attached to. Declaration of Leyla Pasic, Esq. in Support of Plaintiffs' Opposition
5 to Demurrer 2, Apr. 15, 2016 [hereinafter Pasic Decl.], Ex. A. That same day. Defendants
6 Mathew Hawkins and Michael Chavez "join[ed] in the request to meet and confer." E-mail
7 from Jeff Aran, Esq. to Leyla Pasic, Esq., Mar. 16, 2016, attached to, Pasic Decl. T| 3, Ex. B.
8 Defendant Roussos Constmction, Inc., however, never attempted to meet and confer in advance
9 of filing the present demurrer. Pasic Decl. Tf 4.
10 Plaintiffs' counsel responded to Hawkins' meet and confer letter on March 18, 2016
11 stating.
12 In furtherance of CCP § 430.41(a), please advise if an agreement can be reached
13 that would resolve your objections to beraisedin the demurrer, which you said
you intend to file. As I suggested, we would agree to amend to cure the
14 -~ —perceived procedural deficiencies and to address yoiu- concerns fegardiiig
Plaintiffs 10* cause ofaction, if defendants will stipulate to such amendment.
15
LetterfromLeyla Pasic, Esq. to Jeannine I. Maldonado, Esq., March 18, 2016), attached to,
16
Pasic Decl. TI 5, Ex. C. But Defendants ignored Plaintiffs letter and declined to informally
17
resolve the Parties' dispute. Pasic Decl. TI 6. The Defendants instead, simplyfiledthe Instant
18
Demurrer and the accompanying Motion to Strike. E-mailfix)mLeyla Pasic, Esq. to Jeannine I.
19
Maldonado, Esq., March 25, 2016, attached to Pasic Decl. Tl 6, Ex. D.
20
An award of sanctions is proper here. Counsel for Defendant Roussos Constmction,
21
Inc., for example, failed to meet and confer at all. Pasic Decl. TI 4. And while Mathew
22
Hawkins, Michael Chavez, and J. Trinidad Nino did initially meet and confer, they failed to
23
engage in any meaningful conference, declined to negotiate with Plaintiffs or even speak further
24
with Plaintiffs. Notably no Defendant, none of them,filedwith this Court a declaration, either
25
describing the "means by which the demurring party met and conferred with" Plaintiff or stating
26
under penalty of perjury that Plaintiffs "failed to respond to the meet and confer request of the
27
28
8
OPP'N TO DEF. DEM.
1 demurring party or otherwise failed to meet and confer in good faith." Cal. Civ. Proc. Code §
2 430.41; see Pasic Decl. TITI 4-6.
3 Moreover, the demurrer is not especially cogent and appears to be fashioned largely for
4 purposes of delay. For example: (1) it ignores the well-settled legal standard on demurrers and
5 argues factsratherthan accepting as tme the allegations of the FAC; (2) it misstates and/or
6 misapplies the law by claiming that Plaintiffs must "allege (and prove)" they were licensed
7 contractors when this is plainly not the law; and (3) Defendants ignored meet and confer,
8 declining to work with Plaintiffs to resolve any issues without the need for expensive motion
9 practice. See, e.g., Ellis v. Roshei Corp., 143 Cal. App. 3d 642,647 (1983) (holding the
10 "[d]emurrer was not brought in good faith in view of defendants and cross-complainants offer to
11 correct the minor defect in the pleading").
12 For the foregoing reasons. Defendants should be sanctioned in the amount of $ 7,650.00.
13 Pasic Decl. TI 7.
14 IV.CONCLUSION
15 For the foregoing reasons, the Demurrer should be OVERRULED. In the altemative,
16 the Court should permit Plaintiffs leave to amend: "LiberaUty in permitting amendment is the
17 rule, if a fair opportunity to correct any defect has not been given." Angie M. v. Sup. Ct., 37
18 Cal. App. 4tii 1217,1227 (1995).
19 Finally, Defendants should be sanctioned in the amount of $ 7,650.00forfilinga
20 fiivolous/dilatory demurrer and failing to satisfy the statutory meet and confer requirements in
21 advance offilingthe demurrer.
22 Dated: April 15, 2016 WOOD ROBBINS, LLP
23
24
By:
25
LEYLA PASIC
26 Attomeys for Plaintiffs JOSE J. MEJL\, MIGUEL
OSUNA, and OSCAR J. ALMAZAN-MARTINEZ
27 and the Putative Class
28
OPP'N TO DEF. DEM.
Preview
' •» i... . 1 Gregory J. Wood (200780) Leyla Pasic (250705) 2 WOOD ROBBINS, LLP One Post St., Suite 800 3 San Francisco, Califomia 94104 4 T: (415) 247-7900 F:(415) 247-7901 5 lpasic@woodrobbins.com 6 Attorneys for Plaintiffs 7 JOSE J. MEJIA, MIGUEL OSUNA, and OSCAR J. ALMAZAN-MARTINEZ 8 And Putative Class Members 9 IN THE SUPERIOR COURT OF CALIFORNIA 10 JN AND FOR THE COUNTY OF SACRAMENTO 11 12 JOSE J. MEJIA, MIGUEL OSUNA, and Case No.: 34-2016-00190824-CU-OE-GDS OSCAR J. ALMAZAN-MARTINEZ, 13 individually and on behalf of others similarly situated, MEMORANDUM OF_ POINTS AND-^ 14- AUTHORITIES IN OPPOSITION TO 15 DEMURRER Plaintiffs, 16 Date: April 29, 2016 V. Time: 9:00 am 17 Dept.: 54 ROUSSOS CONSTRUCTION, INC.; 18 MATHEW HAWKINS, dba FOCUS 19 FLOORING; MICHAEL CHAVEZ dba FLOORS UNLIMITED; J. TRINIDAD NINO 20 dba NINO'S CARPET, and DOES 1tiirough100, inclusive, 21 22 Defendants. 23 24 Plaintiffs JOSE J. MEJIA, MIGUEL OSUNA, and OSCAR J. ALMAZAN- 25 MARTINEZ (collectively "Plaintiffs") respectfully submit this Memorandum of Points and 26 Autiiorities in Opposition to Defendants ROUSSOS CONSTRUCTION, INC., MATHEW 27 HAWKINS, dba FOCUS FLOORING, MICHAEL CHAVEZ dba FLOORS UNLIMITED, and 28 1 OPP'N TO DEF. DEM. 1 J. TRINIDAD NINO dba NINO'S CARPET (collectively "Defendants'") Demurrer. By tiiis 2 Opposition, Plaintiffs request that the Court OVERRULE Defendants' Demurrer. 3 I. INTRODUCTION 4 The instant Demurrer misconstmes applicable law, seeks to try the action on its merits, 5 and, as a procedural matter, should have been resolved informally. For these reasons, 6 Defendants' Demurrer should be overmled. In the altemative. Plaintiffs should be granted leave 7 to amend the Complaint. 8 Defendants and their counsel should be sanctioned in the amount of $ 7,650.00 for 9 failing to satisfy the meet and confer requirements of Cal. Civ. Proc. Code § 430.41, for failing 10 to resolve informally, and forfilingafiivolousDemurrer and Motion to Strike, 11 n. FACTS 12 On or about October 23, 2015, Plaintiffs JOSE J. MEJIA, MIGUEL OSUNA, and 13 OSCAR J. ALMAZAN-MARTINES (collectively "Plaintiffs")filedtiieirComplaint for 14- Daraages-and Injimctive-Relief on belwlf of thems'elS^s and'all^imilai-ly-situated floom^ 15 installers in Califomia who performed work for one or more of the Defendantsfi-omOctober 16 2001 to the present, in the Alameda Coimty Superior Court. Complaint ^ 16, October 23, 2015. 17 Plaintiffsfiledtheir First Amended Complaint ("FAC") on January 19, 2016. Venue was 18 subsequently transferred to Sacramento County on or about Febmary 25, 2016. 19 On March 16, 2016, Defendants Hawkins, Chavez, and Nino met and conferred with 20 Plaintiffs' coimsel regarding the sufficiency of the FAC. But Defendant Roussos Constmction, 21 Inc. did not. Plaintiffs attempt to informally resolve the instant dispute with all Defendants but 22 none of them responded.' 23 HI. ARGUMENT 24 A. Standard on General Demurrer 25 Defendants' Demurrer should be overmled because Plaintiffs have alleged facts 26 sufficient to survive a general demurrer. When considering a demurrer, it "is wholly beyond the 27 scope of thie inquiry to ascertain whether the facts stated are tme or untme." Garton v. Title Ins. 28 ' A fuller discussion of these facts can be found in the Argument Section. See infra Part III.D. 2 OPP'N TO DEF. DEM. 1 & Trust Co., 106 Cal. App. 3d 365, 375 (1980). Fortiiepurposes oftiie demurrertiietrial court 2 must "assume the tmth of the complaint's properly pleaded or implied factual allegations." 3 Bonis Restaurant Design, Inc. v. Serrano, 134 Cal. App. 4th 1035, 1038 (2005); see Garton, 106 4 Cal. App. 3d at 375 (holding that on demurrer, the defendant effectively admits "all material, 5 issuable facts properly pleaded in the complaint, however improbable they may be"); see also 6 Gould V. Maryland Sound Industries. Inc., 31 Cal. App. 4tii 1137, 1144 (1995) ("[Djefendants 7 cannot set forth allegations of fact in their demurrers which, if trae, would defeat plaintiffs 8 complaint."). Furthermore, in mling on a demurrer, the trial court must "give the complaint a 9 reasonable interpretation, reading it as a whole and its parts in context. Blank v. Kirwan, 39 Cal. 10 3d 311, 318 (2012). 11 A defendant may demur to a complaint on the ground that the pleading does not state 12 facts sufGcient to constitute a cause of action. Cal. Civ. Proc. Code § 430.10(e). In order to 13 survive a demurrer on that ground, "[a] complaint must allege the ultimate facts necessary to the 14- statement of mi actionable-claim;''"Careai/tfeC Security PacT Business, Credit, Inc., 222 15 Cal. App. 3d 1371,1390 (1994). 16 B. California Business & Professions Code § 7031 17 Defendants argue "Plaintiffs' claims for compensation are barred under Business & 18 Professions Code § 7031, which precludes an action by unlicensed contractors." Defendants' 19 Memorandum of Points and Authorities in Support of Demurrer, at 7:2-3, Mar. 24, 2016 20 [hereinafter Dem.]. But Defendants fail to come to grips with one ofthe numerous exception to 21 this Code, which include the exception for "employees." 22 The exception for employees explains, that "this chapter" which includes section 7131, 23 "does not apply to any person who engages in the activities herein regulated as an employee" 24 Cal. Bus. & Prof. Code § 7053 (emphasis added). In short, the contractor's licensing law does 25 not allow employers to abuse their employees just by calling them "contractors" and then 26 demanding they get a contractor's license. That is not how Califomia Labor law works. 27 Here, Plaiotiffs have alleged that even though they were unlicensed, they were 28 nevertheless employed by the Defendants; that Defendants directiy and indirectiy exercised OPP'N TO DEF. DEM. 1 control over their wages, hours, work, and conditions of employment; that Defendants 2 misclassified Plaintiffs as independent contractors; and that Defendants failed to properly 3 compensate them. See e.g., FAC at 23-41; see also Cal. Bus. & Prof Code § 7053 4 (providing an exception for an "employee who receives wages as his or her sole compensation, 5 does not customarily engage in an independently established business, and does not have the 6 right to control or discretion as to the manner of performance so as to determine thefinalresults 7 of the work performed"). Because Plaintiffs have alleged they were employees, which 8 allegations must be taken as tme for purposes of ruling on the demurrer, they need not, as a 9 matter of law, also "allege (and prove) they were licensed contractors." Dem. at 7:3-4. 10 Defendants cite to Fillmore v. Irvine, arguing that Plaintiffs may not take advantage of 11 the presumption of employee status embedded in Cal. Lab. Code § 2750.5. Dem. at 8-9.^ But 12 Fillmore did not decide a demurrer. It was an adjudication of facts after the conclusion of a trial. 13 Fillmore v. Irvine, 146 Cal. App. 3d 649, 651-52 (1983). The issue, here—on demurrer—does -14"^ not involve Defendants arguing Tlie^ facts as they hope and^ay they might be. 15 Moreover, Fillmore stands for the somewhat narrow proposition "that Labor Code 16 section 2750.5 is not applicable to determinations of whether one is an employee or unlicensed 17 contractor under Business and Professions Code sections 7031 and 7053." Fillmore v. Irvine, 18 146 Cal. App. 3d 649, 657 (1983). In short, Cal. Lab. Code § 2750.5tiiatotiierwise provides a 19 "rebuttable presumption . . . that a worker performing services for which a [contractor's] 20 license is required . . . is an employeeratherthan an iadependent contractor" no longer applies 21 in any case in which a plaintiff seeks "compensation." See Hurst v. Buczek Enterprises, LLC, 22 870 F. Supp. 2d 810, 817 (N.D. Cal. 2012) ("Fillmore heldtiiat2750.5 does not apply in tiie 23 context of suits for unpaid 'compensation for the performance of any act or contract.' Instead, it 24 applies to, e.g., classification for worker's compensation purposes, pension plans, torts, etc." 25 (citation omitted)). But whether Plaintiffs in the Instant Case can teike advantage of § 2750.5's 26 27 ^ In the uncited block quote of page 9 of their brief. Defendants quote to language regarding the standard for "leave to amend" which suggests this language was takenfromFillmore. Dem. at 9:15-21. It was not. This block quote 28 comesfroma case called Hepe. See Hepe v. Paknad, 199 Cal. App. 3d 412, 421 (1988). Hepe is a motorcycle accident case, not a labor law case. OPP'N TO DEF. DEM, 1 "presumption" of employee status or not is largely academic. Better than resting on some legal 2 presumption, Plaintiffs here have actually allegedfacts that support their claim that they were 3 employees. See e.g., FAC H 23, 25, 36-39. The Court need not presume anything when Plaintiff 4 allege facts in a complaint, that on demurrer, this Court must presume to be tme. Defendants' 5 misplaced reUance on Fillmore illustrates not only Defendants' misinterpretation of the law, but 6 also, the prematurity of their argument. 7 C. Fraud/Intentional Misrepresentation 8 1. The Tenth Cause of Action is Not Preempted Under the "New Right- Exclusive Remedy" Doctrine. 9 Defendants argue that Plaintiffs' Tenth Cause of Action for Fraud/Intentional 10 Misrepresentation fails under the "New Right-Exclusive Remedy" because it is simply 11 duplicative and, thus, pre-empted by the Labor Code. Dem. 10:1-9. But the allegations in the 12 Tenth Cause of Action, are not, in fact duplicative. 13 Plaintiffs' 10''' Cause of Action for Fraud/Mentwnal ^fe^g)I5sentationJp^cif^ 14- alleges facts showing Defendants' wrongful conduct, other than their Labor Code violations. 15 The chief allegation is that Plaintiffs were deceived into believing they would be paid per square 16 foot of yard they installed or sold to customers, when in fact. Defendants never intended to pay 17 them so. FAC ^ 102. Instead, Defendants intentionally and improperly deductedfromthe 18 square footage installed or sold by Plaintiffs by misrepresenting that less materials were used, or 19 that repairs needed to be done to their work, or that work assignments were not completed. Id. 20 Thus, Plaintiffs are owed money not just under the Labor Code because they were misclassified 21 as independent contractors, but due tofi:Budulentdeductionsfromthe square foot of materials 22 Plaintiffs installed and sold. Put differentiy, even if no Labor Code violations are ultimately 23 found to have occurred. Plaintiffs may still prevail on their Tenth Cause of Action due to 24 Defendants'fraudulentdeductionsfromthe measure of materials. 25 Finally, since a demurrer does not lie to only a portion of a cause of action, any portion 26 of the allegations that state a claim will save a cause of actionfroma demurrer. See Kong v. City 27 ofHawaiian Gardens Redevelop. Agency, 108 Cal. App. 4"' 1028, 1046 (2003). Thus, any 28 OPP'N TO DEF. DEM. 1 portion of the Tenth Cause of Action which is not premised on violations ofthe Labor Code, 2 saves the cause of action from a demurrer on the ground that the claim is preempted. The 3 demurrer on this ground, thus, must be overmled. 4 2. The 10''' Cause of Action for Fraud/Intentional Misrepresentation is Not Fatally Uncertain. 5 Finally, Defendants contend that the Tenth Cause of Action for Fraud/Intentional 6 Misrepresentation fails because it is not pleaded with the requisite specificity. Dem. 11:10-12. 7 But this argument fails like the others. 8 Whenfiiaudis alleged, the elements that must be pleaded are: "(a) misrepresentation 9 (false representation, concealment or nondisclosure); (b) knowledge of falsity (or 'scienter'); (c) 10 intent to defiiaud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damages. 11 Philipson & Simon v. Gulsvig, 154 Cal App. 4tii 347, 363 (2007). Plaintiffs have alleged each 12 element of this cause of action. Plaintiffs allege twelve (12) specific misrepresentations made 13 by defendants, andjeach_ofthem"_to_the_Plaintiffs,-satisfying the first element—FAG T[-101r5ee 14 also Murphy v. BDO Seidman, LLP, 113 Cal. App. 4tii 687, 692 (2003). Plaintiffs allege tiiat 15 those representations were false and that "Defendants, at the time they made the representations 16 set forth above, knew them to be false and intended to, and did, induce Plaintiffs' reliance upon 17 those false representations," thus satisfying the second and third elements of the cause ofaction. 18 FAC 102. Plaintiffs allege they "reasonably relied upon the tmth of the aforementioned 19 statements and representations ia entering iato and continuing in an employment relationship 20 with Defendants according to the terms estabhshed by Defendants. Plaintiffs' reliance was a 21 substantial factor in causing economic harm," thus satisfying the fourth element ofthe cause of 22 action. FAC f 104. Finally, Plaintiffs allege that as a result of these misrepresentations, they 23 have suffered, and wUl continue to suffer, economic injuries. FAC ^ 105. See also Furia v. 24 Helm, 111 CA4th 945, 956 (2003) (finding allegations offiiaudsurvive demurrer even when it 25 fails to allege specific dollar amount). 26 Importantly, the requirement of "particularity" in pleadingfiaudshould not be overdone. 27 If complaints are too detailed (e.g., setting forth each statement verbatim, specifying the time. 28 OPP'N TO DEF. DEM. 1 place and medium by which made), they may provide less effective notice, and be less useful in 2 filming the issues, than would a shorter, more generahzed version. Committee on Children's 3 Television, Inc. v. General Foods Corp., 35 C3d 197, 217 (1983) (superseded by statute on other 4 grounds). "Thus the pleading should be sufficient 'to enable the court to detennine whether, on 5 the facts pleaded, there is any foundation, prima facie at least, for the charge offi^ud.'"Id. 6 Finally, an exception to the strict pleading standard is recognized when it appears that 7 the facts Ue more within defendant's knowledge than plaintiffs: i.e., less specificity is required 8 where "defendant must necessarily possess full information conceming the facts of the 9 confroversy." Id. at 216. Here, Defendants themselves concede that these facts lie more within 10 their knowledge. As they have conceded, "a demurrer as to the Tenth Cause of Action should 11 be sustained with leave to amend only if Plaintiffs detemiine, after conducting discovery that 12 facts exist to support such a Cause of Action for Fraud/intentional misrepresentation." Dem. 13 12:23-25. Because Plaintiffs make these allegations on behalf of a class of similarly situated 14" flooring installers who worked for Defendants, undoubtedly the relevant information is more 15 within the Defendants' knowledge. 16 D. Sanctions 17 "A trial court may order a party, the party's attomey, or both to pay the reasonable 18 expenses, including attomey's fees, incurred by another party as a result of bad-faith actions or 19 tactics that arefiivolousor solely intended to cause unnecessary delay." Cal. Civ. Proc. Code § 20 128.5 (a). '"Actions or tactics' include . . . the making or opposing of motions " Cal. Civ. 21 Proc. Code § 128.5(b)(1). "'Frivolous' means totally and completely without merit or for the 22 sole purpose of harassing an opposing party." Cal. Civ. Proc. Code § 128.5(b)(2). Sanctions 23 are proper wherefiivolousgrounds are a "significant and material part" ofthe motion. Bach v. 24 McNeils, 207 Cal. App. 3d 852, 875 (1989). Relevant totiiisMotion, "Beforefilinga demurrer. 25 .. the demurring party shall meet and confer in person or by telephone with the party who filed 26 the pleading that is subject to demurrer for the purpose of detemiining whether an agreement 27 can be reached that would resolve the objections to beraisedin the demurrer." Cal. Civ. Proc. 28 Code §430.41. OPP'N TO DEF. DEM. 1 Here, on March 16, 2016, counsel for Defendant Mathew Hawkins emailed a meet and 2 confer letter to Plaintiffs' counsel purporting to address the deficiencies ofthe FAC as required 3 by Cal. Civ. Proc. Code § 430.41. LetterfromJeannine I. Maldonado, Esq. to Leyla Pasic, Esq., 4 Mar. 11, 2016, attached to. Declaration of Leyla Pasic, Esq. in Support of Plaintiffs' Opposition 5 to Demurrer 2, Apr. 15, 2016 [hereinafter Pasic Decl.], Ex. A. That same day. Defendants 6 Mathew Hawkins and Michael Chavez "join[ed] in the request to meet and confer." E-mail 7 from Jeff Aran, Esq. to Leyla Pasic, Esq., Mar. 16, 2016, attached to, Pasic Decl. T| 3, Ex. B. 8 Defendant Roussos Constmction, Inc., however, never attempted to meet and confer in advance 9 of filing the present demurrer. Pasic Decl. Tf 4. 10 Plaintiffs' counsel responded to Hawkins' meet and confer letter on March 18, 2016 11 stating. 12 In furtherance of CCP § 430.41(a), please advise if an agreement can be reached 13 that would resolve your objections to beraisedin the demurrer, which you said you intend to file. As I suggested, we would agree to amend to cure the 14 -~ —perceived procedural deficiencies and to address yoiu- concerns fegardiiig Plaintiffs 10* cause ofaction, if defendants will stipulate to such amendment. 15 LetterfromLeyla Pasic, Esq. to Jeannine I. Maldonado, Esq., March 18, 2016), attached to, 16 Pasic Decl. TI 5, Ex. C. But Defendants ignored Plaintiffs letter and declined to informally 17 resolve the Parties' dispute. Pasic Decl. TI 6. The Defendants instead, simplyfiledthe Instant 18 Demurrer and the accompanying Motion to Strike. E-mailfix)mLeyla Pasic, Esq. to Jeannine I. 19 Maldonado, Esq., March 25, 2016, attached to Pasic Decl. Tl 6, Ex. D. 20 An award of sanctions is proper here. Counsel for Defendant Roussos Constmction, 21 Inc., for example, failed to meet and confer at all. Pasic Decl. TI 4. And while Mathew 22 Hawkins, Michael Chavez, and J. Trinidad Nino did initially meet and confer, they failed to 23 engage in any meaningful conference, declined to negotiate with Plaintiffs or even speak further 24 with Plaintiffs. Notably no Defendant, none of them,filedwith this Court a declaration, either 25 describing the "means by which the demurring party met and conferred with" Plaintiff or stating 26 under penalty of perjury that Plaintiffs "failed to respond to the meet and confer request of the 27 28 8 OPP'N TO DEF. DEM. 1 demurring party or otherwise failed to meet and confer in good faith." Cal. Civ. Proc. Code § 2 430.41; see Pasic Decl. TITI 4-6. 3 Moreover, the demurrer is not especially cogent and appears to be fashioned largely for 4 purposes of delay. For example: (1) it ignores the well-settled legal standard on demurrers and 5 argues factsratherthan accepting as tme the allegations of the FAC; (2) it misstates and/or 6 misapplies the law by claiming that Plaintiffs must "allege (and prove)" they were licensed 7 contractors when this is plainly not the law; and (3) Defendants ignored meet and confer, 8 declining to work with Plaintiffs to resolve any issues without the need for expensive motion 9 practice. See, e.g., Ellis v. Roshei Corp., 143 Cal. App. 3d 642,647 (1983) (holding the 10 "[d]emurrer was not brought in good faith in view of defendants and cross-complainants offer to 11 correct the minor defect in the pleading"). 12 For the foregoing reasons. Defendants should be sanctioned in the amount of $ 7,650.00. 13 Pasic Decl. TI 7. 14 IV.CONCLUSION 15 For the foregoing reasons, the Demurrer should be OVERRULED. In the altemative, 16 the Court should permit Plaintiffs leave to amend: "LiberaUty in permitting amendment is the 17 rule, if a fair opportunity to correct any defect has not been given." Angie M. v. Sup. Ct., 37 18 Cal. App. 4tii 1217,1227 (1995). 19 Finally, Defendants should be sanctioned in the amount of $ 7,650.00forfilinga 20 fiivolous/dilatory demurrer and failing to satisfy the statutory meet and confer requirements in 21 advance offilingthe demurrer. 22 Dated: April 15, 2016 WOOD ROBBINS, LLP 23 24 By: 25 LEYLA PASIC 26 Attomeys for Plaintiffs JOSE J. MEJL\, MIGUEL OSUNA, and OSCAR J. ALMAZAN-MARTINEZ 27 and the Putative Class 28 OPP'N TO DEF. DEM.