alendar Line 3
Association, Inc., et al.
I. Factual Background
This action arises from a failed attempt to open a restaurant in a commercial condominium complex. The operative First Amended Complaint (“FAC”) was filed by plaintiffs Tan Nguyen, Nghia Nguyen, Kim Thuy Ho (“Ho”) (collectively the “Owners”), the owners of the condominium unit, and San Francisco Pizza, Inc. (“San Francisco Pizza”), the restaurant (collectively “Plaintiffs”), against defendants Vietnam Town Condominium Owners Association (“VTCOA”), the commercial condominium association; Matrix Association Management (“Matrix”), the VTCOA’s property manager; David Alvarado (“Alvarado”), a Matrix employee responsible for managing the Vietnam Town condominium complex; Joseph Nguyen (“Nguyen”), Khanh Cao Huu, Joany Yuin (“Yuin”), and Ngoc Bui, members of the VTCOA board; Lap T. Tang (“Tang”), the VTCOA’s original developer; and Michael Johnson (“Johnson”), the Owners’ real estate agent.
As alleged in the FAC, Plaintiffs engaged Johnson to purchase a condominium unit known as Unit 9015 (the “Unit”), which is located at 999 Story Road, San Jose, California and is part of the Vietnam Town condominium complex (the “Complex”). (FAC, ¶¶ 1, 12.) At that time, they specifically told Johnson they wanted to purchase the Unit to open a restaurant. (Id. at ¶ 12.) Johnson represented he was very familiar with the units as he himself owned one and further stated there were no restrictions on operating a restaurant in the Unit. (Ibid.) Before escrow closed, Plaintiffs retained the services of an architect who examined the Unit in Johnson’s presence, discussed a preliminary restaurant floor plan with him, and talked with him about using a gas line to supply gas for kitchen appliances. (Ibid.) Johnson also informed Plaintiffs of another tenant at the Complex who had built a Korean barbeque restaurant and was supplied with a gas line for its use. (Ibid.)
In reliance on these representations, Plaintiffs purchased the Unit and prepared to build a pizza restaurant there. (See Id. at ¶¶ 13-14.) During these preparations, one of the Owners, Ho, contacted VTCOA board member Yuin to obtain approval to use the Unit as a restaurant. (Id. at ¶ 14.) Yuin informed Ho she should contact Alvarado with any questions. (Ibid.) Ho contacted Alvarado and sought written permission from the VTCOA board for the installation of a gas line to the Unit. (Ibid.) Alvarado orally informed Plaintiffs the Unit was approved for use as a restaurant and that the gas lines and meters serving the building, which were owned by the VTCOA, could be connected to units operating as restaurants. (Ibid.) Subsequently, Plaintiffs sent Alvarado a draft letter from their counsel that included a statement they had performed all necessary steps to obtain gas line approval from the VTCOA and PG&E. (Ibid.) Alvarado made a number of substantive changes and additions to the letter but did not dispute the statement Plaintiffs had taken all necessary steps to obtain approval. (Ibid.) His changes were incorporated and Plaintiffs believe this letter was forwarded to the VTCOA board. (Ibid.)
This approval process was consistent with Plaintiffs’ belief that, for three years or more, the VTCOA has allowed units to be converted into restaurants and supplied building gas lines for their use without any formal process or procedure. (Id. at ¶ 15.)
In reliance on Alvarado’s representations, San Francisco Pizza spent in excess of $500,000 making tenant improvements to construct the restaurant. (Id. at ¶ 17.) Plaintiffs also hired a contractor to work with PG&E to install a gas line from one of the meters in the building’s common areas to the Unit. (Ibid.) This gas line was then tested and approved by the City of San Jose. (Ibid.) Around this time, Plaintiffs and the VTCOA were sued by another party for trespass, breach of contract, interference, and injunctive and declaratory relief. (Id. at ¶ 19.) The VTCOA and this party settled the matter and the case was voluntarily dismissed. (Ibid.)
Plaintiffs were preparing for a soft opening of the restaurant when Tang, the VTCOA developer, and one of the VTCOA board members disconnected the gas line to the Unit. (Id. at ¶ 20.) They also precluded Plaintiffs’ contractors from accessing the common area to reconnect the line. (Ibid.) These actions were approved of or ratified by the VTCOA board. (Ibid.)
The FAC asserts nine causes of action for: (1) trespass; (2) conversion; (3) intentional interference with prospective economic advantage; (4) breach of contract; (5) declaratory relief; (6) fraud; (7) negligent misrepresentation; (8) civil extortion; and (9) unlawful business practices.
Currently before the Court is a demurrer filed by Matrix and Alvarado (collectively “Defendants”), which is accompanied by a request for judicial notice. The Owners and San Francisco Pizza both oppose the demurrer1 and the Owners also filed a request for judicial notice in support of their opposition. Defendants object to the Owners’ request for judicial notice and also filed “Objections to and Motion to Strike” portions of the Owners’ opposition.
II. Requests for Judicial Notice
A. Defendants’ Request
Defendants seek judicial notice of the complaint filed against Plaintiffs and the VTCOA by the other party; a case information printout for that action, which is taken from the Santa Clara Superior Court – Case Information Portal; portions of the recorded covenants, conditions and restrictions (“CC&Rs”) for the Complex; and the original complaint in this action.
With respect to the complaint from the other action and the original complaint in the current proceeding, they are generally judicially noticeable under Evidence Code section 452 (“Section 452”), subdivision (d), which authorizes judicial notice of court records. That said, a court need not take judicial notice of a matter unless it “is necessary, helpful, or relevant.” (Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, 748, fn. 6.)
Here, with respect to the complaint filed in the other action, Defendants refer to it once relative to their argument the FAC does not sufficiently allege they conspired to disconnect Plaintiffs’ gas line, and the reference is not necessary or helpful for their contention. As for the original complaint in this action, it is unclear why Defendants seek judicial notice of it as it is not discussed in any of the arguments made on demurrer. As such, the Court declines to take judicial notice of both complaints.
Regarding the website printout of case information, it is unclear in the first instance if it is a proper subject of judicial notice. Although it might be appropriate to take judicial notice of the existence of a website itself, the same is not true of its factual content especially since Defendants do not establish that the content is not reasonably subject to dispute. (See, e.g., Searles Valley Minerals Operations, Inc. v. State Bd. of Equalization (2008) 160 Cal.App.4th 514, 519; see also Duronslet v. Kamps (2012) 203 Cal.App.4th 717, 737.) Even if the printout could be judicially noticed, it is not helpful or necessary as it is not referenced anywhere in the demurrer. Therefore, the Court will not judicially notice it.
Finally, with respect to portions of the CC&Rs, they are part of a recorded document and, thus, judicially noticeable under Section 452, subdivision (h) which permits judicial notice of facts that are “not reasonably subject to dispute and capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” (See Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 264-265, disapproved of on other grounds in Yvanova v. New Century Mortg. Corp. (2016) 62 Cal.4th 919.) Moreover, they are relevant to an issue raised on demurrer. (See People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422, fn. 2 [a precondition to judicial notice is that the matter to be noticed must be relevant to a material issue before the court].) Accordingly, they are a proper subject of judicial notice.
Defendants’ request for judicial notice is therefore GRANTED as to the portions of the CC&Rs but DENIED as to the remainder of the documents.
B. The Owners’ Request
The Owners request judicial notice of a declaration by Alvarado that was filed in support of the VTCOA’s opposition to their motion for a preliminary injunction in this action. This declaration is a court record that is generally judicially noticeable under Section 452, subdivision (d).
Defendants object to the request, arguing the declaration is not relevant to the issues raised on demurrer because it did not exist at the time the complaint was filed. This argument is not well-taken. Defendants cite no authority for the proposition a matter for judicial notice is relevant only if it existed when the action was initiated. As such, their position is unsubstantiated.
With that said, the Court finds there is another reason Alvarado’s declaration is not a proper subject of judicial notice, namely that the Owners rely on it for an improper purpose. The Owners reference the declaration to try and demonstrate Alvarado made a misrepresentation to Plaintiffs and conspired with the other defendants to disconnect the gas line. This is not a fact the Court can judicially notice as it is reasonably subject to dispute and its truth cannot be determined without the introduction of evidence. (See Scott v. JPMorgan
Chase Bank, N.A. (2013) 214 Cal.App.4th 743, 755 [a matter can be judicially noticed only if it is reasonably beyond dispute and the introduction of evidence to prove that matter would not be required]; see also Herrera v. Deutsche Bank Nat. Tr. Co. (2011) 196 Cal.App.4th 1366, 1374; Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 113.) As such, the declaration is not a proper subject of judicial notice.
Accordingly, the Owners’ request for judicial notice is DENIED.
Defendants demur to the FAC in its entirety and to the first, second, third, seventh, and ninth causes of action. They also raise issues regarding Plaintiffs’ request for attorney fees, expert fees, and related costs.
A. Demurrer to FAC in its Entirety
Defendants demur to the entire pleading on the grounds of failure to state facts sufficient to constitute a cause of action and uncertainty. (See Code Civ. Proc., § 430.10, subds. (e), (f).)
1. Failure to State Sufficient Facts
Defendants advance no arguments regarding Plaintiffs’ failure to state any cause of action in the FAC. Instead, they merely contend the five claims alleged against them are deficient. This is insufficient. A demurrer to the complaint as a whole is only sustainable if each cause of action fails. (See Warren v. Atchison, Topeka & Santa Fe Ry Co. (1971) 19 Cal.App.3d 24, 36.) Defendants cite no authority to the contrary.
As such, the demurrer to the entire FAC on the ground of failure to state sufficient facts is OVERRULED.
Defendants argue the entire pleading is uncertain because there are defects in Plaintiffs’ verification to the FAC, which was signed by Ho.2 In particular, Defendants take issue with the fact Ho’s signature appears typewritten in “a font that features curved lines” and differs from her signature on the verification of the original complaint. (Dem. at p. 12:21-25.) They assert a verification is important because it relates to the veracity of statements made in the pleading. They further contend a fraudulent or ineffective verification renders the entire pleading uncertain as it prevents them from determining whether they need to verify their answer. This contention is problematic as it is based on a misunderstanding of the ground of uncertainty.
A demurrer on the ground of uncertainty may be sustained only where the allegations in a pleading are so unintelligible the defendant cannot reasonably respond them, i.e., he or she cannot reasonably determine what issues must be admitted or denied, or what counts or claims are directed against him or her. (Khoury v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612, 616.) Here, Defendants’ contention regarding potential falsehoods in the FAC and their inability to ascertain whether they need to verify their answer does not relate to this standard in any way. Defendants also do not otherwise argue the allegations of the pleading are so unintelligible they cannot reasonably determine what is being alleged against them.
Accordingly, the demurrer to the entire FAC on the ground of uncertainty is OVERRULED.
B. Demurrer to Individual Causes of Action
Defendants demur to the individual causes of action on the grounds of failure to state facts sufficient to constitute a cause of action and uncertainty. (See Code Civ. Proc., § 430.10, subds. (e) and (f).)
In advancing their arguments, they do not address each cause of action sequentially. Accordingly, the Court will address the claims in the order they are presented in the memorandum of points and authorities. Further, in addition to discussing how Plaintiffs collectively fail to state the subject causes of action, Defendants include an additional argument section discussing why San Francisco Pizza in particular does not plead certain causes of action. Where assertions specific to San Francisco Pizza are made, the Court will include them in its discussion of that claim.
1. Seventh Cause of Action
The seventh cause of action is for negligent misrepresentation, which requires a plaintiff to plead a misrepresentation that was reasonably relied on (see Ragland v. U.S. Bank Nat’l Assn. (2012) 209 Cal.App.4th 182, 196).
Plaintiffs allege the VTCOA and Defendants negligently misrepresented that consideration of their application to convert the Unit into a restaurant would be delegated to Alvarado and Alvarado was authorized to approve connection of a gas line to the Unit.
a. Failure to State Sufficient Facts
Defendants first argue this claim fails because the FAC indicates the statements they made regarding Alvarado’s authority to act were true and, thus, they did not make a misrepresentation. They point to the fact Plaintiffs plead the VTCOA delegated its management and operation responsibilities to Alvarado relative to the breach of contract claim (see FAC, ¶¶ 35, 37-38) and further plead it ratified his conduct relative to the declaratory relief claim (see FAC, ¶44). Defendants contend these allegations constitute an admission Alvarado had authority to act as he did and, thus, an admission the representations they made to Plaintiffs were true. This argument is not well-taken.
At the outset, Defendants’ contention is predicated on an incorrect understanding of the nature of a judicial admission. “A judicial admission is a party’s unequivocal concession of the truth of a matter, and removes the matter as an issue in the case.” (Minish v. Hanuman Fellowship (2013) 214 Cal.App.4th 437, 456.) Such an admission may be made in a pleading but “not every factual allegation in a complaint automatically constitutes a judicial admission.” (Barsegian v. Kessler & Kessler (2013) 215 Cal.App. 4th 446, 452.) “Rather, a judicial admission is ordinarily a factual allegation by one party that is admitted by the opposing party. The factual allegation is removed from the issues in the litigation because the parties agree as to its truth.” (Ibid., emphasis in original.) Here, there is no indication the fact Alvarado was actually authorized to act on behalf of the VTCOA is undisputed by the parties. Nor does it appear Plaintiffs are unequivocally conceding the truth of this matter. Instead, as demonstrated by their declaratory relief claim, Plaintiffs acknowledge there is an ongoing controversy over this issue. Thus, Plaintiffs’ allegations regarding Alvarado’s actual authority to act on behalf of the VTCOA do not constitute a judicial admission.
In light of the foregoing, though not well articulated, it appears what Defendants are actually taking issue with is the fact Plaintiffs inconsistently plead both that the VTCOA improperly delegated its authority to Alvarado and that Alvarado negligently misrepresented his authority to act on behalf of the VTCOA.3 To the extent this is what Defendants are attempting to argue, this contention also fails.
It is well-established that “[w]hen a pleader is in doubt about what actually occurred or what can be established by the evidence, the modern practice allows that party to plead in the alternative and make inconsistent allegations.” (Mendoza v. Contental Sales Co. (2006) 140 Cal.App.4th 1395, 1402; see also Rader Co. v. Stone (1986) 178 Cal.App.3d 10, 29.) “Tolerance for such pleading rests on the principle that uncertainty as to factual details or their legal significance should not force a pleader to gamble on a single formulation of his claim if the facts ultimately found by the court, though diverging from those the pleader might have considered most likely, still entitle him to relief.” (Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 886.) Though a pleader cannot blow hot and cold as to the facts positively stated or allege contradictory or antagonistic facts in describing the same transaction, the law permits inconsistent theories of recovery “so long as the differing grounds are separately stated and free of self-contradiction.” (Id.; Manti v. Gunari (1970) 5 Cal.App.3d 442, 449; Owens v. Traverso (1954) 125 Cal.App.2d 803, 806.)
Here, though it is true Plaintiffs allege the VTCOA delegated authority to Alvarado relative to the breach of contract claim and Defendants negligently misrepresented Alvarado had authority to act relative to the negligent misrepresentation claim, it appears they do so because they are in doubt about what actually occurred. Thus, to the extent Alvarado was actually authorized to act as he did, they plead the VTCOA breached the CC&Rs by delegating such authority to him. In the alternative, to the extent Alvarado was not actually authorized to act on the VTCOA’s behalf, they allege Defendants negligently misrepresented he had such authority. Under applicable legal principles, this form of pleading in the alternative and making
inconsistent allegations relative to different grounds for recovery is permissible. (See Mendoza, supra, 140 Cal.App.4th at 1402.) As such, the demurrer is not sustainable on the basis Plaintiffs plead inconsistent allegations.
Next, Defendants assert Plaintiffs’ reliance on their representations of approval to convert the Unit into a restaurant was not reasonable. Specifically, they contend it was not reasonable for Plaintiffs to rely on Alvarado’s oral representation regarding the restaurant approval when the CC&Rs they submitted for judicial notice explicitly state any such approval must be in writing. This argument is flawed for two reasons.
First, it is not apparent why Defendants refer to Alvarado’s representation regarding the approval of the Unit as a restaurant when the negligent misrepresentation claim does not appear to be predicated on this particular statement. (See FAC, ¶ 53.) The misrepresentations at issue in this cause of action have to do with statements Alvarado had authority to consider Plaintiffs’ application and approve their use of a gas line, not with his actual statement the Unit had been approved. (See Ibid.) Second, even if this representation was at issue, it is well- established the question of whether a plaintiff’s reliance on a misrepresentation was reasonable is a question of fact inappropriate for resolution on demurrer. (All. Mortg. Co. v. Rothwell (1995) 10 Cal.4th 1226, 1239; Blankenheim v. E. F. Hutton & Co. (1990) 217 Cal.App.3d 1463, 1475; Anderson v. Deloitte & Touche (1997) 56 Cal.App.4th 1468, 1479.)
Finally, Defendants contend this claim fails because Plaintiffs neither “specify how [it] is not belied by facts they have admitted” nor actually allege their representations regarding Alvarado’s authority to act were false. (See Dem. at p. 7:16-18, 7:21-22.)
With respect to the first argument, it is unsubstantiated. Defendants cite no authority supporting the proposition a plaintiff must plead how facts alleged in a negligent misrepresentation claim are not contradicted by other inconsistent allegations in the pleading. As for the second contention, it lacks merit. Though it is true there is no allegation in which Plaintiffs explicitly state the representations made regarding Alvarado’s authority was false, they plead these representations were made “with no reasonable basis to believe them to be true.” (See FAC, ¶ 54.) This averment clearly indicates Plaintiffs are pleading the representations made were false.
For the reasons stated, the demurrer to the seventh cause of action on the ground of failure to state sufficient facts is OVERRULED.
Defendants first argue it is “uncertain how Plaintiffs could have relied on any representation by Alvarado” as the FAC otherwise alleges Plaintiffs bought the Unit for the purpose of opening a restaurant and hired an architect and general contractor before they had any communication with Alvarado. (Dem. at p. 9:1-5.) They thus conclude any reliance is uncertain as “Plaintiffs had been working on the project for over eight months and were no doubt substantially finished by the time Alvarado could have made a representation upon which Plaintiffs relied.” (See Dem. at p. 9:1-5.) This argument is flawed.
As previously discussed, a demurrer for uncertainty may only be sustained where allegations in a pleading are so unintelligible the defendant cannot reasonably determine what
issues must be admitted or denied, or what counts or claims are directed against him or her. (Khoury, supra, 14 Cal.App.4th 612, 616.) Here, Defendants do not assert the allegations in this claim are so unintelligible they cannot determine what they are to respond to. Instead, their argument appears to be directed to whether Plaintiffs have sufficiently alleged reasonable reliance on Alvarado’s representations, an element of a negligent misrepresentation claim. (See Ragland, supra, 209 Cal.App.4th at 196.) This contention therefore relates not to the ground of uncertainty but that of failure to state sufficient facts.4 (See, e.g., Rakestraw v. California Physicians’ Serv. (2000) 81 Cal.App.4th 39, 43 [a demurrer on the ground of failure to state sufficient facts “tests the legal sufficiency of a complaint,” particularly whether every element of each cause of action has been pled].)
Second, with respect to San Francisco Pizza in particular, Defendants assert its status as a renter and not owner of the Unit renders the claim uncertain. Specifically, they contend “[i]t is unclear whether the alleged representations were made only to the Owner Plaintiffs or are alleged also to have been made to SF Pizza.” (Dem. at p. 12:1-3.) This argument lacks merit. Paragraph 53 of the FAC clearly pleads Defendants “represented to Plaintiffs” Alvarado’s authority to decide upon the conversion and gas line installation. This reference to “Plaintiffs” necessarily includes San Francisco Pizza.
Defendants also baldly assert that because San Francisco Pizza has no rights under the CC&Rs, “any basis for a punitive damages claim [it] may wish to pursue is reduced and is unclear.” (Dem. at p. 12:12-14.) They do not further elaborate or explain how a party’s ability to support its punitive damages allegation relates to the demurrer ground of uncertainty. As such, Defendants’ argument is unsubstantiated.
Finally, Defendants argue the “Owner Plaintiffs’ damages claims are also rendered uncertain” because it is unclear whether the Owners or San Francisco Pizza incurred expenses for the buildout of the restaurant. (Dem. at p. 12:6-7.) It is patently unclear what relation this argument bears to the issue of Defendants’ ability to determine what claims are being alleged against them. To the extent Defendants are arguing they are unable to determine the amount of the damages that may be apportioned to Owners as opposed to San Francisco, this is neither a contention relating to the ground of uncertainty nor an issue appropriate for resolution on demurrer. (See Izell v. Union Carbide Corp. (2014) 231 Cal.App.4th 962, 978 [the amount of damages is a question of fact]; Adams v. Pac. Motor Trucking Co. (1959) 172 Cal.App.2d 505, 506 [same].) As such, Defendants’ contention is not well-taken.
As such, the demurrer to the seventh cause of action on the ground of uncertainty is OVERRULED.
2. First, Second, Third, and Ninth Causes of Action
The first cause of action is for trespass and alleges all the defendants conspired to trespass upon Plaintiffs’ gas line by disconnecting it from the meter and preventing Plaintiffs from accessing it. The second cause of action for conversion pleads all the defendants wrongfully misappropriated the gas line, which was Plaintiffs’ property. The third cause of
action for intentional interference with prospective economic advantage avers Plaintiffs were precluded from opening their pizza restaurant when the gas line was disconnected and suffered lost profits as a result. The ninth cause of action is for violation of Business and Professions Code section 17200, otherwise known as California’s unfair competition law (“UCL”), and pleads the defendants engaged in unlawful business practices and conspired with each other to engage in self-dealing, civil extortion and fraud in the operation of the VTCOA.
a. Failure to State Sufficient Facts
Defendants argue none of these claims has been stated because they are predicated on a conspiracy theory of liability and Plaintiffs insufficiently allege they were involved in a conspiracy. In particular, they contend the FAC does not plead Defendants knew of or did anything relative to the disconnection of the gas line and, instead, suggests the conspiracy arose among the other defendants after some of them settled the lawsuit filed by another unit tenant. With respect to the first, second, and third causes of action, this assertion has merit.
To plead the existence of a conspiracy, “a plaintiff must allege that the defendant had knowledge of and agreed to both the objective and the course of action that resulted in the injury, that there was a wrongful act committed pursuant to that agreement, and that there was resulting damage.” (Berg & Berg Enterprises, LLC v. Sherwood Partners, Inc. (2005) 131 Cal.App.4th 802, 823; see also Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 510-511.) “In making such allegations bare legal conclusions, inferences, generalities, presumptions, and conclusions are insufficient.” (State of California ex rel. Metz v. CCC Info. Servs., Inc. (2007) 149 Cal.App.4th 402, 419.)
Here, the first through third causes of action are based on Plaintiffs’ allegation all of the defendants aside from Johnson “conspired and agreed to trespass upon Plaintiffs’ gas line.”5 (FAC, ¶ 22.) Plaintiffs, however, do not plead additional facts to support this bare legal conclusion. (FAC, ¶ 22.) For example, they do not aver Matrix and Alvarado had knowledge of and agreed to disconnect the gas line, or that they committed a wrongful act pursuant to their agreement with the other defendants. In fact, relative to the wrongful act performed (i.e. the disconnection of the gas line), they otherwise allege it was Tang, the VTCOA developer, and Nguyen, a VTCOA board member, who arranged to have the gas line disconnected. (FAC, ¶ 20.)
Plaintiffs’ arguments in opposition do not compel a contrary conclusion. In support of their contention Alvarado conspired with the other defendants to disconnect the gas line, Plaintiffs reference a declaration he provided to the VTCOA for their opposition to Plaintiffs’ motion for preliminary injunction. Plaintiffs’ reliance on this declaration is flawed for two reasons. First, the Court declined to take judicial notice of it and therefore cannot refer to it in its evaluation of the demurrer. Second, even if the declaration was judicially noticed, it and the fact Alvarado submitted it are matters extrinsic to the FAC and, thus, cannot be considered in evaluating the challenge to the pleading. (See Groves v. Peterson (2002) 100 Cal.App.4th 659, 667 [on demurrer, a court considers only the allegations on the face of the complaint and any judicially noticeable matters]; Vaca v. Wachovia Mortg. Corp. (2011) 198 Cal.App.4th 737,
746 [same].) As such, the demurrer to the first, second, and third causes of action is sustainable on the basis Plaintiffs do not adequately plead Defendants’ conspiracy liability.
As for the UCL cause of action, however, it is not predicated solely on a conspiracy theory of liability. Instead, in addition to alleging the individual defendants engaged in a conspiracy, Plaintiffs also plead “each of the defendant businesses has engaged in an unlawful business practice.” (FAC, ¶ 15.) It is well-established a demurrer does not lie to a portion of a cause of action. (See PH II, Inc. v. Superior Court (1995) 33 Cal.App.4th 1680, 1682; see also Financial Corp. of America v. Wilburn (1987) 189 Cal.App.3d 764, 778.) As such, the demurrer to this claim is not sustainable on the basis Plaintiffs inadequately plead conspiracy liability.
Finally, relative to San Francisco Pizza in particular, Defendants argue the first, second, and third causes of action are inadequately pled because each of these claims “derive[s] from Plaintiffs’ interpretation of their rights [to use the Unit as a restaurant and connect a gas line] under…[the] CC&Rs” which San Francisco Pizza is not a party to because it rents and does not own the Unit. (Dem. at p. 11:5-6, 11: 21-25.) This contention is flawed.
Defendants baldly assert but do not explain how Plaintiffs’ invocation of a right to convert their Unit and install a gas line is based on their interpretation of the CC&Rs. Moreover, it otherwise appears that their assertion of such a right rests not on the CC&Rs but, rather, on representations made by Alvarado regarding the VTCOA’s approval of their requests. (See FAC, ¶ 14.) In fact, Plaintiffs explicitly suggest the CC&Rs would not have permitted such a use but the VTCOA had been allowing such conversions and gas line installations without any formal process or procedure. (See FAC, ¶ 15.) As such, it is not apparent in the first instance that any of Plaintiffs’ purported rights to conversion or a gas line arose under the CC&Rs. Thus, the demurrer to these claims as alleged by San Francisco Pizza is not sustainable on the basis it had no rights under the CC&Rs.
In sum, the demurrer to the first, second, and third causes of action is sustainable solely on the basis Plaintiffs inadequately plead a conspiracy Defendants were involved in. As for the ninth cause of action for violations of the UCL, Defendants have not articulated a basis on which to sustain their demurrer.
Therefore, the demurrer to the ninth cause of action on the ground of failure to state sufficient facts is OVERRULED while the demurrer to the first, second, and third causes of action on the ground of failure to state sufficient facts is SUSTAINED with leave to amend. Plaintiffs will have until October 30, 2018 to file an amended pleading.
Defendants assert but do not substantiate their contention these claims are uncertain. The only reference they make to the ground of uncertainty is in the argument discussed above regarding San Francisco Pizza’s purported failure to plead the first, second, and third causes of action. Specifically, Defendants contend these claims “fail to state a cause of action and are uncertain” because San Francisco Pizza has no rights under the CC&Rs. (Dem. at p. 11:20-25, emphasis added.) This argument is flawed.
It is problematic that Defendants advance the same argument relative to both the grounds of failure to state sufficient facts and uncertainty as there is a significant difference between these two grounds for demurrer. A demurrer on the ground of failure to state sufficient facts “tests the legal sufficiency of a complaint,” particularly whether every element of each cause of action has been pled, while a demurrer for uncertainty relates to whether the allegations of the pleading are so unintelligible they cannot be reasonably responded to. (See, e.g., Rakestraw, supra, 81 Cal.App.4th at 43; Khoury, supra, 14 Cal.App.4th at 616.) A “[special] demurrer for uncertainty is not intended to reach the failure to incorporate sufficient facts in the pleading, but is directed at the uncertainty existing in the allegations actually made.” (Bacon v. Wahrhaftig (1950) 97 Cal.App.2d 599, 605; People v. Lim (1941) 18 Cal.2d 872, 883.)
Here, Defendants do not address the standard for uncertainty or explain how the allegations in these causes of action are so unintelligible they cannot determine what is being alleged against them. Instead, their arguments are directed towards the sufficiency of these claims. Moreover, with respect to the ninth cause of action in particular, they do not even attempt to advance any arguments why it is uncertain.
Accordingly, the demurrer to the first, second, third, and ninth causes of action on the ground of uncertainty is OVERRULED.
C. Issues Regarding Claim for Attorney Fees, Expert Fees and Related Costs
In the conclusion to their memorandum of points and authorities, Defendants anomalously assert for the first time that “Plaintiffs’ claim for attorney fees, expert fees, and related costs is uncertain.” (Dem. at p. 14:12.) They do not tether this contention to their demurrer to either the entire pleading or to individual causes of action. To the extent Defendants are attempting to demur to Plaintiffs’ request for certain types of fees and costs, this is improper. Code of Civil Procedure section 430.50, subdivision (a) clearly states a demurrer to a complaint may be directed to the entirety of the pleading or to any causes of action therein. It does not provide for a demurrer to a plaintiff’s request for fees or costs. As such, Defendants’ contention regarding Plaintiffs’ claim for attorney fees, expert fees and related costs will be disregarded.
D. “Objections to and Motion to Strike” Portions of the Owners’ Opposition
Defendants object to and move to strike various portions of the Owners’ opposition for various reasons, including that there are references to material and information extrinsic to the complaint. They cite no authority for the proposition a party may move to strike portions of an opposition to a demurrer. The Court otherwise observes that Code of Civil Procedure section 435 only provides for a motion to strike a pleading, which is defined as a demurrer, answer, complaint, or cross-complaint. As such, Defendants’ “Objections to and Motion to Strike” portions of the Owners’ opposition is DENIED.
alendar Line 4
Demurrer of Defendant Hispanicize Media Group, LLC to the First Amended Complaint
Factual and Procedural Background
Full Bottle Group, Inc. (“Full Bottle”) was founded in 2013 by Reed Berglund (“Berglund”), Natalie Enright (“Enright”), and Eric Wachs (“Wachs”). (First Amended Complaint (“FAC”), ¶1.) Full Bottle created and managed an online advertising platform that allowed brands to solicit bids for advertising campaigns from Full Bottle’s roster of highly influential social media personalities (known as “influencers”). (Id.) Influencers are celebrities and other people who have large followings on social media platforms such as Instagram, Snapchat, YouTube and Facebook. (Id.) Influencers post content on their social media channels which is viewed by followers over the Internet. (Id.) Advertisers seek to work with influencers, who position themselves as experts in a field (e.g., make-up demonstration, fitness, fashion) relating to the products being marketed. (Id.)
There are tens of thousands of social media influencers who work with advertisers to promote products through social media. (FAC, ¶24.) Traditionally, influencer marketing was highly decentralized. (Id.) Full Bottle eliminated inefficiencies with the traditional approach. (Id.) To run a campaign through Full Bottle, a brand would post a project or product, solicit bids from influencers in a competitive auction, and approve the campaign’s creators, content, and pricing simultaneously. (FAC, ¶25.) Knight & Bishop, L.P. (“K&B”) saw the promise of the Full Bottle platform and invested approximately $2 million in K&B. (FAC, ¶26.)
In December 2016, Berglund and Full Bottle’s management concluded Full Bottle lacked resources to stave off its creditors. (FAC, ¶27.) Full Bottle had a cash flow shortfall of $785,000 and a projected a cash flow shortfall of $1.7 million by October 2017. (FAC, ¶28.) Berglund and Full Bottle management began marketing the company for sale, identifying Hispanicize Media Group, LLC (“HMG”), a Hispanic-focused media organization with its own influencer network, as a potential purchaser. (Id.)
On or around March 22, 2017, HMG and Full Bottle entered into a NDA in which HMG committed not to use Full Bottle’s information in any manner detrimental to Full Bottle other than to evaluate, negotiate, or carry out a possible business relationship. (FAC, ¶29.) In the event a business relationship between HMG and Full Bottle did not come to fruition, HMG committed to return or destroy materials that included or referred to Full Bottle’s information. (Id.) Full Bottle shared information with HMG under the NDA. (Id.)
On May 23, 2017, HMG delivered a letter of intent proposing terms for the purchase of Full Bottle’s assets. (FAC, ¶31.) On June 6, 2017, Berglund and HMG representatives held a teleconference to discuss the proposed transaction including discussions about what to do with
Full Bottle’s three largest unsecured creditors: ZeptoLab, MiniClip, and K&B. (Id.) Full Bottle also disclosed to HMG its unpaid liabilities to influencers. (Id.) After learning of Full Bottle’s outstanding liabilities, HMG quickly reduced its offer price to $650,000 on June 8, 2017. (FAC, ¶32.)
By late June 2017, Full Bottle’s finances continued to deteriorate until the company had no choice but to transfer its assets through an assignment for the benefit of creditors (“ABC”)6 or file for bankruptcy. (FAC, ¶33.) On June 26, 2017, Full Bottle transferred its assets to a new entity managed by Sherwood Partners, Inc. (“Sherwood”) called Full Bottle (assignment for the benefit of creditors), LLC (“Full Bottle ABC”). (FAC, ¶¶4 and 33.) Berglund and other Full Bottle employees continued to work for or on behalf of Full Bottle or Full Bottle ABC after the ABC. (FAC, ¶34.)
The day after the ABC, Sherwood emailed K&B informing of the ABC and assessing whether K&B was interested in acquiring Full Bottle’s assets including all of its valued intellectual property. (FAC, ¶35.) K&B received incorrect or incomplete information regarding Full Bottle’s liabilities. (Id.) On July 17, 2017, K&B, through an affiliate entity, Share Edge, LLC (“Share Edge”), offered to purchase Full Bottle’s assets for $1.8 million. (Id.)
Armed with full knowledge of Full Bottle’s liabilities and damaged goodwill in the influencer community, HMG did not counter K&B’s bid. (FAC, ¶36.) Instead, HMG hired Berglund and misappropriated the intellectual property and business opportunities of Full Bottle. (Id.) In HMG’s July 5, 2017 offer to Berglund, a description of the scope of work included recruiting influencers, “merging client lists,” and “transfer[ring] all current FB client invoices to HMG.” (Id.) Sherwood expressly approved this arrangement in an email informing HMG that, “Berglund is not an employee of Fullbottle [sic] or Sherwood LLC. Any entity in the market is able to hire his services.” (Id.) On July 7, 2017, HMG wired Berglund his July 2017 consulting fee of $17,373.33. (Id.) Berglund immediately began misappropriating Full Bottle’s intellectual property for the benefit of his new employer. (FAC, ¶37.) A few days later, HMG used Full Bottle’s proprietary information to solicit business with Universal McCann and Interpublic Group, two global media and advertising agencies. (FAC, ¶38.)
After K&B placed the winning bid for Full Bottle ABC’s assets, Full Bottle ABC and K&B’s designee, Share Edge, executed an Asset Purchase Agreement (“Agreement”). (FAC, ¶40.) Under the Agreement, Share Edge acquired the assets of Full Bottle ABC in exchange for approximately $1.8 million. (Id.) The deal closed on July 28, 2017. (Id.) The Agreement gives Share Edge sole ownership of all trade secrets and intellectual property assigned by Full Bottle to Full Bottle ABC, and Full Bottle’s rights as against employees and former employees. (FAC, ¶41.)
Full Bottle ABC, through Sherwood, made various representations and warranties in the Agreement. (FAC, ¶40.) Despite knowing of threatened and actual litigation filed by ZeptoLab against Full Bottle and later Full Bottle ABC, Full Bottle ABC represented in the Agreement that no claim, suit, or proceeding was pending or threatened that “might affect in any way the Purchased Assets, Assumed Liability or the transaction contemplated by this Agreement, nor is Seller aware or have grounds to know of any reasonable basis therefor.” (Id.) Sherwood, through Full Bottle ABC, represented that all representations and warranties would be accurate as the date of closing. (FAC, ¶43.) Each of the representations and warranties was false as of the date of closing and had Share Edge known of the falsity, it would not have entered into the Agreement. (FAC, ¶44.)
Contrary to the terms of the Agreement which required Sherwood and Full Bottle ABC to effect a complete transfer of all outstanding purchased assets, Sherwood and Full Bottle ABC failed to turn over the assets necessary to run the business until November 9, 2017, nearly three and a half months after the transaction closed on July 28, 2017. (FAC, ¶¶46 and 50.) Full Bottle ABC and others, including Wachs and Sherwood, represented to influencers who were owed for campaigns run prior to closing that Share Edge was responsible for outstanding debts even though Share Edge was not responsible for such obligations under the Agreement. (FAC, ¶47.) The Agreement also required Share Edge to provide its prior written approval to any public disclosure or announcement regarding Share Edge’s acquisition of purchased assets. (Id.)
Due to false statements by Wachs and others, Share Edge received complaints from influencers who claimed to be owed payments for Full Bottle campaigns. (FAC, ¶48.) Influencers organized online and sought legal counsel to bring action against Share Edge. (Id.) Influencers discouraged their peers from working with Share Edge or Full Bottle. (Id.)
On December 22, 2017, plaintiffs K&B and Share Edge (collectively, “Plaintiffs”) filed a complaint against defendants HMG, Sherwood, Full Bottle, Full Bottle ABC, and Berglund asserting causes of action for:
(1) Misappropriation of Trade Secrets [versus HMG and Berglund] (2) Inducing Breach of Contract [versus HMG]
(3) Intentional Interference with Contract [versus HMG]
(4) Breach of Contract [versus Berglund]
(5) Breach of Contract [versus Full Bottle, Full Bottle ABC, and Sherwood] (6) Intentional Misrepresentation [versus Berglund, Full Bottle, Full Bottle ABC, and Sherwood]
On February 20, 2018, defendant Sherwood filed a general denial. On February 26, 2018, defendant Sherwood filed an amended answer and general denial.
On March 7, 2018, defendant HMG filed a demurrer to the first through third causes of action in Plaintiffs’ complaint. On June 13, 2018, the court overruled defendant HMG’s demurrer to the first cause of action, but sustained defendant HMG’s demurrer to the second and third causes of action.
On June 22, 2018, Plaintiffs filed the operative FAC which now asserts causes of action for:
(1) Misappropriation of Trade Secrets [versus HMG and Berglund] (2) Inducing Breach of Contract [versus HMG]
(3) Intentional Interference with Contract [versus HMG]
(4) Breach of Contract [versus Berglund]
(5) Breach of Contract [versus Full Bottle, Full Bottle ABC, and Sherwood] (6) Intentional Misrepresentation [versus Berglund, Full Bottle, Full Bottle ABC, and Sherwood]
(7) Intentional Interference with Prospective Economic Relation [versus HMG] (8) Breach of Contract [versus HMG under Florida Law]
On July 23, 2018, defendant HMG filed the motion now before the court, a demurrer to Plaintiffs’ FAC.
On July 24, 2018, defendants Sherwood and Full Bottle ABC filed an answer and general denial to Plaintiffs’ FAC.
I. Defendant HMG’s demurrer to Plaintiffs’ FAC is SUSTAINED, in part, and OVERRULED, in part.
A. Defendant HMG’s demurrer to the second, third, and seventh causes of action for inducing breach of contract, intentional interference with contract, and intentional interference with prospective economic relations, respectively, is SUSTAINED.
Defendant HMG contends the second cause of action for inducing breach of contract, third cause of action for intentional interference with contract, and seventh cause of action for intentional interference with prospective economic relations is preempted by the California Uniform Trade Secrets Act (“CUTSA”). “CUTSA provides the exclusive civil remedy for conduct falling within its terms, so as to supersede other civil remedies ‘based upon misappropriation of a trade secret.’” (Silvaco Data Systems v. Intel Corp. (2010) 184 Cal. App. 4th 210, 236.) Further, Civil Code “section 3426.7, subdivision (b), preempts common law claims that are ‘based on the same nucleus of facts as the misappropriation of trade secrets claim for relief.’” (K.C. Multimedia, Inc. v. Bank of America Technology & Operations, Inc. (2009) 171 Cal. App. 4th 939, 958.) However, CUTSA does not preempt claims that are related to a trade secret misappropriation, but are “independent and based on facts distinct from the facts that support the misappropriation claim.” (Angelica Textile Services, Inc. v. Park (2013) 220 Cal.App.4th 495, 499, 506 (Angelica).)
Here, Plaintiffs allege Full Bottle’s trade secrets include, “lists of Full Bottle’s customers; lists of influencers who worked with Full Bottle; technology; and details of Full Bottle’s contracts with clients and negotiations with potential clients.” (FAC, ¶53.)
In the second cause of action, Plaintiffs allege valid contracts exist between (1) “Full Bottle Group and users of the Full Bottle platform” (FAC, ¶¶63 and 65); (2) “Full Bottle and Full Bottle ABC, which assigned Full Bottle’s assets to the ABC for the benefit of Full Bottle’s creditors: (FAC, ¶64); (3) “Share Edge and Full Bottle ABC also entered into … the
Agreement, under which Sherwood was obligated to transfer Full bottle assets upon closing” (FAC, ¶64.) Plaintiffs then allege, “HMG intentionally interfered with these contracts by soliciting Berglund to assign the right to the receivables under these contracts to HMG… The interference constituted conversion of funds that Share Edge was entitled to… HMG hired Berglund for the purpose of diverting assets that Full Bottle and Sherwood were obligated to protect … and for the purpose of wrongfully seeking and obtaining business opportunities belonging to Full Bottle and its successors. …. By paying Berglund to divert receivables, contracts, and other assets to HMG, HMG intended to prevent Full Bottle ABC from transferring those assets to Share Edge under the Agreement. … [HMG] gained access to receivables and business opportunities that were rightfully the property of Share Edge.” (FAC, ¶¶66 – 68.)
In the third cause of action, Plaintiffs allege, in relevant part, “Contractual relationships existed between Full Bottle Group and users of the Full Bottle platform … which … provided that these users would pay Full Bottle a fee for using the platform… HMG became aware of this contractual relationship when it attempted to purchase Full Bottle Group. Berglund specifically discussed what receivable were owed to Full Bottle by influencers, advertisers, and other users of the Full Bottle platform. … HMG … solicited Berglund to divert these funds from Full Bottle to HMG. … Berglund diverted contracts between Full Bottle and its clients and influencers to HMG, and HMG has collected amounts due for campaigns that were Full Bottle’s sole property. … [HMG] convert[ed] receivables that rightfully belonged to Share Edge.” (FAC, ¶¶72 – 73.)
In the seventh cause of action, Plaintiffs allege, in relevant part, “HMG appropriated Full Bottle information and goodwill for its own benefit, taking for itself not only confidential and proprietary information but also interfering with current and prospective relationships with advertisers and influencers, and associated goodwill that properly belonged to Full Bottle. HMG also wrongfully hired Reed Berglund as an HMG consultant for the purpose of obtaining Full Bottle’s goodwill.” (FAC, ¶104.)
In this court’s opinion, the second, third, and seventh causes of action are based upon the same common nucleus of facts as Plaintiffs’ claim for misappropriation of trade secrets, i.e., HMG used trade secret information (details of Full Bottle’s contracts with clients; specifically, details about accounts receivable) for its own personal benefit. The acts alleged in the second, third, and seventh cause of action depend upon using confidential and proprietary information. The second, third, and seventh causes of action exist only through the alleged wrongful misappropriation of trade secret information.
Accordingly, defendant HMG’s demurrer to the second, third, and seventh causes of action in Plaintiffs’ FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for inducing breach of contract, intentional interference with contract, and intentional interference with prospective economic relations, respectively, i.e., the causes of action are barred by CUTSA preemption, is SUSTAINED WITHOUT LEAVE TO AMEND. Defendant HMG’s demurrer to the second, third, and seventh causes of action in Plaintiffs’ FAC on the ground that the pleading is uncertain [Code Civ. Proc., §430.10, subd. (f)] is OVERRULED.
B. Defendant HMG’s demurrer to the eighth cause of action for breach of contract is OVERRULED.
Defendant HMG argues initially that Plaintiffs exceeded the scope of permissible amendment by adding this new eighth cause of action, because the court did not grant Plaintiffs leave to do so when the court sustained the prior demurrer. However, this is not a grounds for demurrer. (See Code Civ. Proc., §430.10.)
“To prevail on a cause of action for breach of contract, the plaintiff must prove (1) the contract, (2) the plaintiff's performance of the contract or excuse for nonperformance, (3) the defendant's breach, and (4) the resulting damage to the plaintiff.” (Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186; see also CACI, No. 303.)
If the contract is written, “the terms must be set out verbatim in the body of the complaint or a copy of the written instrument must be attached and incorporated by reference.” (Otworth v. Southern Pacific Transportation Co. (1985) 166 Cal.App.3d 452, 459.) Alternatively, “[i]n an action based on a written contract, a plaintiff may plead the legal effect of the contract rather than its precise language.” (Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 199.) “This is more difficult, for it requires a careful analysis of the instrument, comprehensiveness in statement, and avoidance of legal conclusions, and it involves the danger of variance where the instrument proved differs from that alleged; it is not frequently employed. Nevertheless, it is an established method.” (4 Witkin, California Procedure (4th ed. 1997) Pleading, §480, p. 573.)
Defendant HMG contends the eighth cause of action is defective because Plaintiffs have not attached a copy of the contract at issue, the NDA. Without specifying any provisions in the NDA, Plaintiffs allege, “HMG breached the NDA by using Full Bottle information outside the context of negotiating a business relationship between HMG and Full Bottle, by converting Full Bottle information for its own benefit, by taking for itself business opportunities with advertisers and influencers that properly belonged to Full Bottle, and by failing to return or destroy information received under the NDA.” (FAC, ¶113.)
Defendant HMG overlooks earlier allegations where Plaintiffs allege, “a Non- Disclosure and Confidentiality Agreement (the ‘NDA’) … prohibited HMG from using Full Bottle information and technology—or exploiting opportunities belonging to Full Bottle, Full Bottle ABC (for the benefit of its creditors) and its ultimate purchaser Share Edge—outside of a business relationship with Full Bottle and/or its successors. It also required HMG to return and/or destroy all Full Bottle confidential information if the parties did not proceed with a business relationship.” (FAC, ¶10.) “Under the NDA, HMG committed not to use Full Bottle’s information in any manner detrimental to Full Bottle. The entities agreed that any use of the information other than to evaluate, negotiate, or carry out a possible business relationship between them would be deemed detrimental. In the event that a business relationship between HMG and Full Bottle did not come to fruition, HMG committed to return or destroy materials that included or referred to Full Bottle’s information.”
Plaintiffs have adequately pleaded the legal effect of the contract rather than its precise language. Accordingly, defendant HMG’s demurrer to the eighth cause of action in Plaintiffs’ FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for breach of contract is OVERRULED. Defendant HMG’s demurrer to the eighth cause of action in Plaintiffs’ FAC on the ground that the pleading is uncertain [Code Civ. Proc., §430.10, subd. (f)] is OVERRULED.
alendar line 5
Defendant City of Mountain View and Max Bosel’s Motion for Summary Judgment or, in the Alternative, Summary Adjudication of Issues
Factual and Procedural Background
Plaintiff Annie Lohman (“Lohman”) is a 38 year old female dispatcher for the Mountain View Police Department (“Department”). (Supp. Complaint, ¶3.) Plaintiff was hired by defendant City of Mountain View (“City”) in 2003. (Supp. Complaint, ¶9.) Since joining the Department’s SWAT team in 2005, plaintiff Lohman has been repeatedly subjected to sexually explicit banter, lewd jokes, nudity, and simulated sexual acts. (Supp. Complaint, ¶10.) Chief of Police, defendant Max Bosel (“Bosel”), who was SWAT team leader at the time, not only did nothing to stop this behavior, but actively encouraged it. (Id.)
After plaintiff Lohman’s personal relationship with a SWAT team member became known, Bosel no longer perceived plaintiff Lohman as a willing participant and plaintiff Lohman was no longer willing to be subject to, and resisted, the unlawful and inappropriate conduct. (Supp. Complaint, ¶11.) Thereafter, Bosel demonstrated a clear animus towards plaintiff Lohman. (Id.)
Plaintiff Lohman complained to Human Resources of sexual harassment, gender discrimination, and hostile work environment, among other things. (Supp. Complaint, ¶12.) Since Bosel took over direct leadership of the communications division where plaintiff Lohman works, plaintiff Lohman has been subjected to intense scrutiny and meritless investigations. (Supp. Complaint, ¶13.)
At Bosel’s urging, plaintiff Lohman’s supervisors have attempted to paper plaintiff’s file with disciplinary memoranda to support Bosel’s goal of pushing plaintiff out of the Department. (Supp. Complaint, ¶14.) City placed plaintiff on an unrealistic and unfair performance improvement plan, which plaintiff Lohman ultimately passed despite many obstacles imposed by her supervisors. (Id.)
In February 2015, City placed plaintiff Lohman on paid administrative leave. (Supp. Complaint, ¶15.) Afterwards, plaintiff Lohman received a notice of intended discipline from Bosel recommending plaintiff be demoted, placed on a training program, and removed from the SWAT team. (Id.) The notice informed plaintiff that she could not return to work unless she voluntarily accepted the demotion and training (Id.) The notice stated that if plaintiff accepted her demotion, she would continue to receive her salary in effect as of the date of her placement on administrative leave. (Id.) Plaintiff objected to City’s demotion, and later challenged the intended discipline at a Skelly hearing held on March 24, 2016. (Id.)
Despite multiple requests to return to work, plaintiff remained on administrative leave for more than a year until May 31, 2016, when she was demoted to Public Safety Dispatcher II and allowed to return to work. (Supp. Complaint, ¶16.) City subsequently informed plaintiff that her pay was being reduced because she contested the demotion. (Id.) Plaintiff believes the reduction in pay was in retaliation for her opposition to discrimination by challenging City’s proposed demotion. (Id.)
An audiometric evaluation revealed plaintiff had a hearing impairment. (Supp. Complaint, ¶18.) Plaintiff filed a workers’ compensation claim as a result of this hearing impairment. (Id.)
On March 7, 2016, plaintiff filed a complaint against defendants City and Bosel.
On April 5, 2016, defendants City and Bosel filed an answer to plaintiff’s complaint.
On March 30, 2017, plaintiff Lohman filed the operative supplemental complaint against defendants City and Bosel asserting causes of action for:
(2) Sexual Harassment
(3) Gender Discrimination
(4) Disability Discrimination
(5) Failure to Prevent Harassment, Discrimination, and Retaliation (6) Violation of California Fair Pay Act, Labor Code §1197.5
On April 28, 2017, defendants City and Bosel filed an answer to plaintiff Lohman’s supplemental complaint.
On July 20, 2018, defendants City and Bosel filed the motion now before the court, a motion for summary judgment/ adjudication of plaintiff Lohman’s supplemental complaint.
I. Defendants City and Bosel’s motion for summary adjudication of the second cause of action [sexual harassment] is GRANTED.
“The FEHA contains specific time limitations related to the remedies provided: a verified complaint must be filed with the Department of Fair Employment and Housing within one year of the unlawful practice (Gov. Code, § 12960).” (Murray v. Oceanside Unified School Dist. (2000) 79 Cal.App.4th 1338, 1360.) With some exceptions, “No complaint may be filed after the expiration of one year from the date upon which the alleged unlawful practice or refusal to cooperate occurred.” (Gov. Code, §12960, subd. (d).)
According to defendants, plaintiff Lohman filed an amended complaint with the DFEH on October 23, 2015 alleging for the first time that she joined the SWAT team in 2005 and was continuously subjected to sexually explicit banter, lewd jokes, nudity and simulated sexual acts as a dispatcher for the SWAT team, and this complaint mentions defendant Bosel for the first time.7
To be timely, the alleged unlawful practice (sexual harassment) had to have occurred after October 23, 2014. Defendants contend the sexual harassment against plaintiff all occurred prior to October 23, 2014 and plaintiff’s claim is, therefore, barred. Defendants proffer evidence that plaintiff Lohman was a member of the SWAT team for MVPD from 2005 until May 2016.8 After joining SWAT in 2005, plaintiff claims the SWAT team members subjected her to sexually explicit banter, lewd jokes, nudity and simulated sexual acts at after- hours parties at team training in Monterey in 2006 and 2007.9 Sometime between 2008 and 2010, plaintiff attended a party during a SWAT team training where SWAT team member Dan Vicencio received a sexually explicit birthday cake.10 Plaintiff testified that in 2014 when she last attended an out-of-town SWAT training in Fort Hunter Liggett, no one engaged in any inappropriate sexual conduct.11 Plaintiff cannot recall specifically any inappropriate sexual acts by SWAT team members that occurred in 2013 or 2014.12 Plaintiff allegedly stopped socializing with the SWAT team in 2013.13
In opposition, plaintiff Lohman invokes the continuing violation doctrine. “The continuing violation doctrine comes into play when an employee raises a claim based on conduct that occurred in part outside the limitations period. Provided at least one of the acts occurred within the statutory period, the employer may be liable for the entire course of conduct, including acts predating the statutory period, under the continuing violation doctrine.” (Chin, et al., CAL. PRAC. GUIDE: EMPLOYMENT LITIGATION (The Rutter Group 2017, ¶16:264 citing Richards v. CH2M Hill, Inc. (2001) 26 Cal. 4th 798, 823 – 824 (Richards), et al.) “A continuing violation exists if: (1) the conduct occurring within the limitations period is similar in kind to the conduct that falls outside the period; (2) the conduct was reasonably frequent; and (3) it had not yet acquired a degree of permanence.” (Dominguez v. Washington Mutual Bank (2008) 168 Cal.App.4th 714, 721 (Dominguez).)
Plaintiff Lohman notes, initially, that her claim is not one for sexual harassment based upon a hostile work environment theory. Instead, her claim of sexual harassment is based upon a “quid pro quo” theory. “Quid pro quo harassment occurs when submission to sexual conduct is made a condition of concrete employment benefits.” (Fisher v. San Pedro Peninsula Hospital (1989) 214 Cal.App.3d 590, 607.) Plaintiff Lohman alleges in her supplemental complaint that, “Chief Bosel made unwanted sexual advances to plaintiff and engaged in other unwanted verbal or physical conduct of a sexual nature. [¶] Defendants’ employment decisions affecting plaintiff were made based on her acceptance or rejection of Chief Bosel’s sexual advances and conduct.” (Supp. Complaint, ¶¶28 – 29.)
Defendants’ own evidence is that Bosel was tactical commander of the SWAT team from April 2003 to October 2007, resigning in 2007 when he was promoted to Captain.14 Defendant Bosel gave plaintiff Lohman a foot rub at a SWAT team training in Monterey when he was still on SWAT.15 Plaintiff testified defendant Bosel may have rubbed her shoulders for
a few minutes two to four times between 2005 and 2014, but she has no specific recollection of dates.16 Plaintiff testified defendant Bosel used a flirtatious, overly friendly tone with her and greeted her with a hug on one occasion.17 Plaintiff proffers evidence that defendant Bosel hugged her on more than one occasion and commented about her physical appearance.18 Plaintiff Lohman first told defendant Bosel about her relationship with Sergeant Thomas in late 2012 or early 2013.19 At that meeting, defendant Bosel asked plaintiff Lohman to voluntarily self-demote from her Lead position but plaintiff refused to do so.20 In July 2013, plaintiff received a “Good/Very Good” performance rating.21 That same month, defendant Bosel appointed Jennifer Copeland (“Copeland”) to a role with oversight over the communications division.22 On August 28, 2013, plaintiff received a verbal “counseling” from Copeland and supervisor Allison Taylor (“Taylor”).23 Despite her strong performance review one month before, Copeland and Taylor told plaintiff Lohman she was not meeting the performance standards for her position. Prior to this counseling, plaintiff had never been reprimanded or disciplined for her performance or for any other reason.24
In March 2014, plaintiff’s performance was praised by Taylor for her performance in response to two critical call situations.25 Yet plaintiff was placed on a performance improvement plan (“PIP”) in April 2014 and again asked by defendant Bosel to voluntarily demote.26 Plaintiff successfully completed the PIP on August 12, 2014.27 Defendant Bosel issued plaintiff a negative performance review in September 2014, despite successful completion of the PIP.28 In December 2014, plaintiff was informed she and Sergeant Thomas could not work the same shift pursuant to City’s nepotism policy.29 Plaintiff Lohman testified other couples in the Department had worked the same shift together.30 In February 2015, defendant Bosel placed plaintiff on an indefinite administrative leave, announcing the decision to the entire department without first notifying plaintiff.31 Defendants ultimately demoted plaintiff Lohman on July 22, 2015.32
In opposing summary adjudication, plaintiff Lohman’s theory is not that her SWAT team members engaged in sexually inappropriate behavior (creating a hostile work environment), but that it was defendant Bosel specifically who openly flirted with plaintiff Lohman, made comments about her physical appearance, hugged her, and rubbed her shoulders or feet until defendant Bosel learned, in 2012 or 2013, that plaintiff Lohman had entered into a relationship with a member of the SWAT team, Sergeant Thomas. At that point, plaintiff 16
See Defendants’ SSUF, Issue No. 1, Fact No. 59.
See Plaintiff’s SS, Issue No. 3, Fact No. 14.
Lohman no longer participated in the sexual banter and became unwilling to allow Bosel to continue his flirtatious behavior. Plaintiff’s theory is that defendant Bosel, once jilted, thereafter took action to demote her. It is these continuing acts which occurred after plaintiff Lohman refused to submit to defendant Bosel’s inappropriate/ unwelcome sexual behavior and continued beyond October 23, 2014 which, according to plaintiff, preclude application of the statute of limitations.
If this were simply a case of hostile work environment, it would be easier for the court to analyze whether defendants engaged in conduct during the limitations period which is similar in kind to conduct outside of the period. Here, however, plaintiff advances a quid pro quo theory of sexual harassment. Plaintiff attributes all the negative personnel decisions as the consequence of her withdrawing from/ refusing Bosel’s earlier sexual advances. “[S]imilar kinds of unlawful employer conduct, such as acts of harassment or failures to reasonably accommodate disability, may take a number of different forms. ...” (Dominguez, supra, 168 Cal.App.4th at p. 722.) “A continuing violation could be shown by a series of related acts so long as there is sufficient evidence to show that those acts are related closely enough to constitute a continuing violation.” (Id.)
Here, however, the court does not find sufficient evidence to show that the personnel action taken against plaintiff Lohman is related closely enough to any quid pro quo harassment by defendant Bosel. There is evidence that defendant Bosel hugged plaintiff Lohman and commented on her physical appearance. Plaintiff subjectively believed defendant Bosel was overly-friendly and flirtatious. There is also evidence that defendant Bosel gave plaintiff a foot rub in 2007. While there is some dispute about the number and dates, there is also evidence that defendant Bosel rubbed plaintiff Lohman’s shoulders between two and four times from 2005 and 2014. There is no evidence, however, that defendant Bosel made, expressly or implicitly, submission to his sexual conduct a condition of plaintiff’s continued employment or continued receipt of concrete employment benefits. Other than plaintiff’s speculation, there simply is no evidence from which a trier of fact can reasonably conclude that the negative personnel decisions taken against plaintiff are related to plaintiff’s refusal to submit to defendant Bosel’s sexual conduct. The court does not find the personnel actions taken against plaintiff Lohman during the limitations period related closely enough to constitute a continuing violation. Plaintiff Lohman’s claim for sexual harassment is time barred.
Accordingly, defendants City and Bosel’s motion for summary adjudication of the second cause of action in plaintiff Lohman’s supplemental complaint for sexual harassment is GRANTED.
In light of the court’s ruling, the court need not address defendants’ other grounds for summary adjudication of the second cause of action.
II. Defendant City’s motion for summary adjudication of the first cause of action [retaliation] is GRANTED.
“To establish a prima facie case of retaliation, the plaintiff must show (1) he or she engaged in a protected activity; (2) the employer subjected the employee to an adverse employment action; and (3) a causal link between the protected activity and the employer’s action. Once an employee establishes a prima facie case, the employer is required to offer a legitimate reason for the adverse employment action. If the employer produces a legitimate
reason for the adverse employment action, the presumption of retaliation ‘drops out of the picture,’ and the burden shifts back to the employee to prove intentional retaliation.” (Akers v. County of San Diego (2002) 95 Cal.App.4th 1441, 1453; see also Yanowitz v. L'Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1065–1066.)
Defendant City argues first that there is no causal link between the protected activity and any adverse employment action because plaintiff Lohman did not engage in a protected activity until after the adverse employment action had already taken place. Defendant City proffers evidence that it began counseling plaintiff on her performance deficiencies in 2013, placed her on a PIP in 2014, and further notified her of complaints and identified errors in her call taking from September 2014 through February 2015.33 The Notice of Intended Discipline served on plaintiff on July 22, 2015 was based entirely on incidents of poor performance that arose prior to February 5, 2015.34 Plaintiff first raised complaints about being treated differently because of her gender and sexual harassment by her co-workers in a letter dated April 8, 2015.35
In opposition, plaintiff contends she engaged in protected activity earlier than April 8, 2015 and did so by withdrawing her participation, in opposition to sexual conduct engaged in and encouraged by defendant Bosel and others on the SWAT team, once her relationship with Sergeant Thomas became publicly known in the summer of 2012.36
“The statutory language of section 12940(h) indicates that protected conduct can take many forms. Specifically, section 12940(h) makes it an unlawful employment practice ‘[f]or any employer ... to discharge, expel, or otherwise discriminate against any person because the person has opposed any practices forbidden under this part or because the person has filed a complaint, testified, or assisted in any proceeding under this part.’ (Italics added.)” (Yanowitz v. L'Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1042 (Yanowitz).) “Standing alone, an employee's unarticulated belief that an employer is engaging in discrimination will not suffice to establish protected conduct for the purposes of establishing a prima facie case of retaliation, where there is no evidence the employer knew that the employee's opposition was based upon a reasonable belief that the employer was engaging in discrimination.” (Yanowitz, supra, 36 Cal.4th at p. 1046.)
Here, plaintiff Lohman is asserting that she essentially “voiced” her opposition through her actions in refusing to socialize with SWAT. However, there is no evidence to suggest that defendant knew plaintiff’s unarticulated opposition (refusal to socialize) was based upon her belief that SWAT was engaging in sexually inappropriate conduct. Plaintiff Lohman’s own testimony emphasizes this point.
Q: When did you stop socializing with members of the SWAT team? A: Generally around 2012 or 2013.
Q: Why did you stop socializing with members of the SWAT team in 2012 or 2013?
See Defendants’ SSUF, Issue No. 4, Fact Nos. 6 – 13.
A: Because I was sick of putting up with the behavior. It felt disgusting and I didn’t want to do it anymore.
Q: Did you tell anyone that?
A: Scott Thomas.
Q: Anyone else?
A: Possibly Lisa Blackburn.
Q: Did you ever tell Max Bosel that?
Q: So when you say that your relationship with Max Bosel had changed because you were no longer socializing with members of the SWAT team, would he know whether or not you were still socializing with members of the SWAT team, to your knowledge?
A: I don’t know.
Plaintiff’s unarticulated withdrawal from participating in sexual banter and flirtations is not enough to establish protected activity.
Plaintiff Lohman acknowledges that she engaged in protected activity when she submitted a complaint to City’s Human Resources in April 2015 and argues City retaliated thereafter in July 2015 by giving her a Notice of Intended Discipline. Plaintiff Lohman does not, however, address defendant City’s point that the Notice of Intended Discipline was based solely on plaintiff’s performance prior to February 5, 2015. If plaintiff did not engage in protected activity until April 2015, there can be no causal link to adverse employment action which commenced before that date.
However, even if it is plaintiff’s contention that it was her act of complaining in April 2015 that triggered the subsequent July 2015 Notice of Intended Discipline, defendant City maintains there is no causal link. The disciplinary process commenced before plaintiff’s complaint and City had already begun working on discipline in January and February 2015 before plaintiff was placed on administrative leave.37 Defendant City proffers evidence that it hired Karen Kramer to conduct an investigation into plaintiff’s April 2015 complaint.38 Defendant City put plaintiff’s disciplinary process on hold to investigate.39 After the investigation of plaintiff’s April 2015 discrimination complaint was completed (and determined to be unsubstantiated), the City resumed the disciplinary process it had initiated in February 2015 and sent plaintiff a Notice of Intended Discipline dated July 22, 2015 that proposed her demotion.40
In opposition, plaintiff contends the mere temporal proximity between the time she made her complaint in April 2015 and the time defendant City issued its Notice of Intended Discipline in July 2015 (3 – 4 months) is enough to establish a causal link. Temporal proximity, however, is not enough. In Loggins v. Kaiser Permanente International (2007) 151 Cal.App.4th 1102, 1112 (Loggins) the court accepted the proposition that “a plaintiff can satisfy the initial burden under the McDonnell Douglas framework by producing evidence of
‘nothing more than … the proximity in time between the protected action and the allegedly retaliatory employment decision.’ ” However, “such evidence of a temporal proximity only satisfies the plaintiff's initial burden. Once an employee establishes a prima facie case, the employer is required to offer a legitimate, nonretaliatory reason for the adverse employment action. If the employer produces a legitimate reason for the adverse employment action, the presumption of retaliation drops out of the picture, and the burden shifts back to the employee to prove intentional retaliation. [¶] … temporal proximity, although sufficient to shift the burden to the employer to articulate a nondiscriminatory reason for the adverse employment action, does not, without more, suffice also to satisfy the secondary burden borne by the employee to show a triable issue of fact on whether the employer’s articulated reason was untrue and pretextual.” (Loggins, supra, 151 Cal.App.4th at p. 1112; citations and punctuation omitted.)
Plaintiff Lohman contends she also engaged in protected activity when she refused to voluntarily demote which was offered to her as an alternative disciplinary action offered in the Notice of Intended Discipline.41 Instead, plaintiff Lohman challenged the disciplinary action.42 However, as defendant City points out, Government Code section 12940 only makes it unlawful if a person “opposes any practices forbidden by this part.” The issuance of a Notice of Intended Discipline is not a forbidden practice so plaintiff’s challenge to the proposed discipline is not a protected activity.
Accordingly, defendant City’s motion for summary adjudication of the first cause of action in plaintiff Lohman’s supplemental complaint for retaliation is GRANTED.
III. Defendant City’s motion for summary adjudication of the third and fourth causes of action [gender/ disability discrimination] is GRANTED.
“The specific elements of a prima facie case [for discrimination] may vary depending on the particular facts. [Citations.] Generally, the plaintiff must provide evidence that (1) he was a member of a protected class, (2) he was qualified for the position he sought or was performing competently in the position he held, (3) he suffered an adverse employment action, such as termination, demotion, or denial of an available job, and (4) some other circumstance suggests discriminatory motive.” (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 355 (Guz).)
“California uses the three-stage burden-shifting test established by the United States Supreme Court for trying claims of discrimination based on a theory of disparate treatment,” known as the McDonnell Douglas test. (Scotch v. Art Institute of California (2009) 173 Cal.App.4th 986, 1004 (Scotch).) Under the McDonnell Douglas test, “the plaintiff [first] has the burden of establishing a prima facie case of discrimination. Second, if the plaintiff meets this burden, the employer must offer a legitimate nondiscriminatory reason for the adverse employment decision. Third, and finally, the plaintiff bears the burden of proving the employer's proffered reason pretextual.” (Knight v. Hayward Unified School Dist. (2005) 132 Cal.App.4th 121, 129.)
See Plaintiff’s AMF, Fact No. 106.
“ ‘A defendant employer’s motion for summary judgment slightly modifies the order of these [McDonnell Douglas] showings.’ ” (Scotch, supra, 173 Cal.App.4th at p. 1005.) To prevail on summary judgment, the defendant employer is “required to show either that (1) plaintiff could not establish one of the [prima facie] elements of the FEHA claim, or (2) there was a legitimate, nondiscriminatory reason for its decision to terminate plaintiff’s employment.” (Avila v. Continental Airlines, Inc. (2008) 165 Cal.App.4th 1237, 1247.)
Here, defendant City proffers a legitimate, non-discriminatory reason for demoting plaintiff Lohman. “[T]he employer’s burden is satisfied if he simply ‘explains what he has done’ or ‘[produces] evidence of legitimate nondiscriminatory reasons.’” (Board of Trustees v. Sweeney (1978) 439 U.S. 24, 25.) As discussed above in the context of retaliation, defendant City has met its initial burden here by proffering evidence that it began counseling plaintiff on her performance deficiencies in 2013, placed her on a PIP in 2014, and further notified her of complaints and identified errors in her call taking from September 2014 through February 2015.43 City began working on discipline of plaintiff in January and February 2015 before she was placed on paid administrative leave.44 City put plaintiff’s disciplinary process on hold to investigate plaintiff’s allegations of discrimination and harassment raised on April 8, 2015.45 After completing an investigation of plaintiff’s April 8, 2015 complaint, the City resumed its disciplinary steps against plaintiff.46 City served plaintiff with a Notice of Intended Discipline on July 22, 2015 proposing her demotion from Lead Dispatcher to Public Safety Dispatcher II.47 City held a Skelly hearing on March 24, 2016 to address the Notice of Intended Discipline and to review the proposed discipline against plaintiff.48 Plaintiff’s representatives attended the March 24, 2016 Skelly hearing and opposed the City’s proposed discipline of demotion, presenting arguments on plaintiff’s behalf.49 City issued a Notice of Demotion to plaintiff on May 5, 2016 which informed plaintiff of her right to appeal, but plaintiff did not appeal.50 City demoted plaintiff on May 5, 2016 from Lead Public Safety Dispatcher to Public Safety Dispatcher II.51 City demoted plaintiff because her performance as a Lead Public Safety Dispatcher was unacceptable due to her many call taking errors and she failed to meet public safety dispatching and supervisor standards.52
“If the employer has met its burden by showing a legitimate reason for its conduct, the employee must demonstrate a triable issue by producing substantial evidence that the employer’s stated reasons were untrue or pretextual, or that the employer acted with a discriminatory animus, such that a reasonable trier of fact could conclude that the employer engaged in intentional discrimination or other unlawful action.” (DeJung v. Super. Ct. (2008) 169 Cal.App.4th 533, 553, citing Cucuzza v. City of Santa Clara (2002) 104 Cal. App. 4th 1031, 1038 (Cucuzza) and Guz, supra, 24 Cal.4th at p. 357.)
See Defendants’ SSUF, Issue No. 5, Fact Nos. 6 – 13 and 20 – 21.
In opposition, plaintiff renews her argument that temporal proximity is sufficient to demonstrate pretext. As already discussed above, temporal proximity alone is not sufficient. Apart from the temporal proximity, plaintiff contends there is evidence of pretext because she received negative performance reviews very shortly after or simultaneously receiving positive performance reviews and/or having successfully completed her PIP.53
“Speculation cannot be regarded as substantial responsive evidence.” (Cucuzza, supra, 104 Cal. App. 4th at p. 1038.) “Further, an inference of intentional discrimination cannot be drawn solely from evidence, if any, that the company lied about its reasons.” (Guz, supra, 24 Cal.4th at p. 360; see also Guz, supra, 24 Cal.4th at p. 361 (stating that “[t]he pertinent statutes do not prohibit lying, they prohibit discrimination… [and] there must be evidence supporting a rational inference that intentional discrimination, on grounds prohibited by the statute, was the true cause of the employer’s actions”) (emphasis original).) “[E]ven where the plaintiff has presented a legally sufficient prima facie case of discrimination, and has also adduced some evidence that the employer’s proffered innocent reasons are false, the fact finder is not necessarily entitled to find in the plaintiff’s favor.” (Id. at pp. 361-362.) “For instance, an employer would be entitled to judgment as a matter of law if the record conclusively revealed some other, nondiscriminatory reason for the employer’s decision, if the plaintiff created only a weak issue of fact as to whether the employer’s reason was untrue and there was abundant and uncontroverted independent evidence that no discrimination had occurred.” (Id. at p. 362.)
Plaintiff’s evidence does not demonstrate any falsity with defendant City’s proffered reason for demotion. At most, plaintiff’s evidence calls into question the propriety of defendant City’s decision making. Even liberally construing plaintiff’s evidence, it would be entirely speculative for a reasonable trier of fact to conclude that the real reason for plaintiff’s demotion was because of some discriminatory reason.
The same is true with plaintiff’s evidence regarding disability discrimination. Plaintiff contends there is evidence that City did not know the full extent of plaintiff’s hearing loss and did not wait for an independent medical examination before making its decision to demote her.54 Again, this calls into question the propriety of defendant City’s decision making, but it does not create a rational inference of discriminatory motive.
Accordingly, defendant City’s motion for summary adjudication of the third and fourth causes of action in plaintiff Lohman’s supplemental complaint for gender discrimination and disability discrimination, respectively, is GRANTED.
IV. Defendants City and Bosel’s motion for summary adjudication of the fifth cause of action [failure to prevent harassment, discrimination, and retaliation] is GRANTED.
A claim for “Failure to Prevent Harassment, Discrimination, and Retaliation” necessarily depends upon establishing that harassment, discrimination, and/retaliation occurred in the first place. Under FEHA, an employer has an obligation to “take all reasonable steps necessary to prevent discrimination and harassment from occurring.” (See Gov. Code §12940, subd. (k).) A prerequisite to a finding of liability for the failure to take all reasonable steps,
however, is a finding that the plaintiff actually suffered unlawful discrimination, harassment, or retaliation. (See Trujillo v. North County Transit Dist. (1998) 63 Cal.App.4th 280, 282 – 283; see also Scotch v. Art Institute of California (2009) 173 Cal.App.4th 986, 1021.) Defendant City argues that since there is no harassment, discrimination, or retaliation in the first instance, there can be no claim for the failure to prevent it.
In light of the rulings above, defendant City’s motion for summary adjudication of the fifth cause of action in plaintiff Lohman’s supplemental complaint for failure to prevent harassment, discrimination, and retaliation is GRANTED.
V. Defendants City and Bosel’s motion for summary adjudication of the sixth cause of action [violation of California Fair Pay Act] is GRANTED.
Labor Code section 1197.5, subdivision (a) provides:
An employer shall not pay any of its employees at wage rates less than the rates paid to employees of the opposite sex for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions, except where the employer demonstrates: (1) The wage differential is based upon one or more of the following factors: (A) A seniority system.
(B) A merit system.
(C) A system that measures earnings by quantity or quality of production.
(D) A bona fide factor other than sex, such as education, training, or experience. This factor shall apply only if the employer demonstrates that the factor is not based on or derived from a sex-based differential in compensation, is job related with respect to the position in question, and is consistent with a business necessity. For purposes of this subparagraph, “business necessity” means an overriding legitimate business purpose such that the factor relied upon effectively fulfills the business purpose it is supposed to serve. This defense shall not apply if the employee demonstrates that an alternative business practice exists that would serve the same business purpose without producing the wage differential.
(2) Each factor relied upon is applied reasonably.
(3) The one or more factors relied upon account for the entire wage differential. Prior salary shall not, by itself, justify any disparity in compensation.
In Hall v. County of Los Angeles (2007) 148 Cal.App.4th 318, 323, the court wrote, “The EPA exists to ensure that employees performing equal work are paid equal wages without regard to gender. To prove a violation of that basic principle, a plaintiff must establish that, based on gender, the employer pays different wages to employees doing substantially similar work under substantially similar conditions.”
Plaintiff Lohman claims Andre Harrison (“Harrison”), a former Lead Public Safety Dispatcher for City, earned more than plaintiff when they were both Lead Public Safety Dispatchers because Harrison is a man. (Supp. Complaint, ¶57.)
In moving for summary adjudication, defendant City contends the wage differential between plaintiff and Harrison fits within one of the enumerated exceptions. Specifically, defendant City contends the wage differential between plaintiff and Harrison is legitimately based upon a “bona fide factor other than sex, such as education, training, or experience. This factor shall apply only if the employer demonstrates that the factor is not based on or derived from a sex-based differential in compensation, is job related with respect to the position in question, and is consistent with a business necessity.” (Lab. Code, §1197.5, subd. (a)(1)(D).)
Defendant City explains Harrison was hired by City in 1995 and promoted to Communication Operations Supervisor from 2008 to 2011, during which time he supervised all the public safety dispatchers, including plaintiff.55 Harrison voluntarily demoted back to Lead Dispatcher in June 2011.56 Plaintiff was hired in 2003 and became a Lead Dispatcher in approximately October 2005.57 Harrison had more experience as a dispatcher than plaintiff when they were both Lead Dispatchers.58 City agreed to y-rate Harrison’s salary when he stepped down to the position of Lead Dispatcher, which allowed him to keep the higher Communications Operations Supervisor salary, but disqualified him from any increases until the other Lead Dispatcher salaries reached his salary level.59 The other Lead Dispatchers (including plaintiff) caught up with Harrison’s salary in 2013.60
In opposition, plaintiff cites Labor Code section 1197.5, subdivision (a)(3) which states, in relevant part, “Prior salary shall not, by itself, justify any disparity in compensation.” However, this statutory provision does not defeat summary adjudication here because the disparity in plaintiff and Harrison’s compensation is not based solely on Harrison’s prior salary, but also based on the proffered fact that Harrison has more experience. (See Green v. Par Pools, Inc. (2003) 111 Cal.App.4th 620, 632—“Mr. Leyva's experience justified his employment at a substantially greater wage rate than Ms. Green. Defendant therefore established that business reasons other than sex led to the wage differential.”)
Accordingly, defendant City’s motion for summary adjudication of the sixth cause of action in plaintiff Lohman’s supplemental complaint for violation of California Fair Pay Act, Labor Code section 1197.5, is GRANTED.
In light of the rulings above, defendant City’s motion for summary judgment is GRANTED.
VI. Plaintiff’s Objections to Defendants’ Evidence.
To the extent the court relied on defendants’ evidence in making this ruling, plaintiff Lohman’s objections thereto are OVERRULED. All other objections are preserved. “In granting or denying a motion for summary judgment or summary adjudication, the court need rule only on those objections to evidence that it deems material to its disposition of the motion. Objections to evidence that are not ruled on for purposes of the motion shall be preserved for appellate review.” (Code Civ. Proc., §437c, subd. (q).)
See Defendants’ SSUF, Issue No. 9, Fact No. 77.
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Mobile Home Park, LLC
Motion for Summary Judgment to the Verified Complaint by Defendant Casa Alondra Mobile Home Park, LLC
Factual and Procedural Background
This is a declaratory relief action. Defendant Casa Alondra Mobile Home Park, LLC (“CAMHP” or “LLC”) is a limited liability company with its principal place of business in Santa Clara County, California. (See Complaint at ¶ 1.) Plaintiff Wade H. Hover, Trustee of the Wade H. Hover Family Trust (“Plaintiff”), is the owner of 50% of the voting membership of the LLC. (Id. at ¶ 14.)
In June 2014, the members of the LLC entered into a document titled “Unanimous Written Consent of the Members of Casa Alondra Mobile Home Park LLC” (the “Instructions” or “Written Consent”). (Complaint at ¶ 3, Exhibit A.) The Instructions were drafted and signed by 100% of the membership with voting power pursuant to the terms and provisions of the Operating Agreement of the LLC (“Operating Agreement”). Pursuant to the Instructions, the members adopted the following resolutions:
WHEREAS, the LLC is the lessee under that certain lease agreement, dated June 12, 1970, originally between Pauline Di Tomaso, as lessor, and Ryan Enterprises, as lessee, a copy of which is attached hereto (the “Di Tomaso Lease”) concerning the real property upon which the Casa Alondra Mobile Home Park is operated (the “Property”); and
WHEREAS, Section 28 of the Di Tomaso Lease provides that the lessee has the option to purchase the Property under certain terms and conditions (the “Option”); and WHEREAS, Section 5.3 of the Operating Agreement of the LLC provides that a minimum of 62.5% of the LLC Members must approve the purchase of any real property; and
WHEREAS, the undersigned Members believe it is in the best interest of the LLC and its Members to pursue the purchase of the Property;
BE IT RESOLVED, that the undersigned Members approve the pursuit of the exercise of the Option to purchase the Property under the Di Tomaso Lease; and RESOLVED FURTHER, that the undersigned Members authorize David Hover61 and Fred Lester, as the General Managers of the LLC, to exercise the Option in accordance with the terms of the Di Tomaso Lease.
(Id. at Exhibit A.)
David Hover is the adult son of Plaintiff in this action.
The Instructions were reapproved by all members at a meeting held on December 2, 2014. (Complaint at ¶ 9.) In March 2015, David Hover resigned as Co-General Manager. (Id. at ¶ 10.) Thereafter, Frederick Lester, as the sole remaining General Manager, assumed the duties and obligations of the Operating Agreement and has continued in that capacity. (Ibid.)
The Complaint alleges there is a present and actual controversy between Plaintiff and CAMHP which pertains to the interpretation and effect of the Instructions and General Manager Frederick Lester’s performance of the LLC duties. (Complaint at ¶ 11.) In particular, Plaintiff alleges the true, correct and appropriate meaning of the Instructions is that they constitute directions to the General Manager to move forward with and consummate the exercise of the Option provided under the Lease and to complete the purchase of the Property without delay. (Id. at ¶ 12.) Conversely, defendant CAMHP asserts the Instructions were merely a guide to the LLC General Manager that allows an exploration of the possibility of purchasing the Property and that it contains no explicit language to that purpose. (Ibid.) The General Manager should first determine risks and cost and what course of action he wished to recommend to the members. (Ibid.)
Plaintiff contends such an interpretation is incorrect, illogical and inconsistent with the plain language of the Instructions. (Complaint at ¶ 13.) The Instructions specifically authorizes the General Manager to exercise the Option with no reference to the exercise of his discretion as the General Manager to purchase or not purchase. (Ibid.) The LLC Operating Agreement specifically prohibits the General Manager, from conducting any of the LLC affairs in a manner wholly inconsistent with the actual language and the logical interpretation of the Instructions. (Ibid.) Two years has now lapsed since the Instructions were agreed to by all members of the LLC and the General Manager has declared that he has suspended all action to carry out the purchase. (Id. at ¶ 14.)
On August 9, 2016, Plaintiff filed the operative verified Complaint against defendant CAMHP alleging a single cause of action for declaratory relief. The LLC filed its answer to the Complaint on November 18, 2016.
Motion for Summary Judgment
Currently before the Court is defendant CAMHP’s motion for summary judgment to the Complaint. (Code Civ. Proc., § 437c.) Both sides filed requests for judicial notice and evidentiary objections in conjunction with the motion. Plaintiff filed written opposition. CAMHP filed reply papers. Trial is set for November 5, 2018.
CAMHP’s Request for Judicial Notice
In support of the motion, defendant CAMHP requests judicial notice of the malpractice complaint filed in Wade Hover v. Brian Hannon, et al. (case no. 2016-CV-302436) in Santa Clara County. (See Request for Judicial Notice at Exhibit A.) The Court may take judicial notice of the malpractice complaint under Evidence Code section 452, subdivision (d) as it constitutes a record of the superior court. (See Stepan v. Garcia (1974) 43 Cal.App.3d 497, 500 [the court may take judicial notice of its own file].)
Accordingly, the request for judicial notice is GRANTED.
Plaintiff’s Request for Judicial Notice
In opposition, Plaintiff seeks judicial notice of the City of San Jose Mobile Home Rent Ordinance in San Jose Municipal Code – Chapter 17.22. (See Exhibit A to Request for Judicial Notice.) Specifically, section 17.22.155 identified as the “Maximum standard annual percentage increase.” Plaintiff requests judicial notice of the ordinance under Evidence Code section 452, subdivision (d). The ordinance however does not constitute a record of the court and thus subdivision (d) is not applicable. Furthermore, the request is not relevant in resolving issues raised by the motion for summary judgment. (See Gbur v. Cohen (1979) 93 Cal.App.3d 296, 301 [judicial notice is confined to those matters which are relevant to the issue at hand].)
Consequently, the request for judicial notice is DENIED.
Plaintiff’s Evidentiary Objections
In opposition, Plaintiff asserts various objections to evidence submitted in the moving papers. “In granting or denying a motion for summary judgment or summary adjudication, the court need rule only on those objections to evidence that it deems material to its disposition of the motion. Objections to evidence that are not ruled on for purposes of the motion shall be preserved for appellate review.” (Code Civ. Proc., § 437c, subd. (q).) Here, the Court declines to rule on the objections as they are not material to the outcome of the motion.
CAMHP’s Evidentiary Objections
In reply, defendant CAMHP objects to evidence submitted by Plaintiff in opposition to the motion. The Court SUSTAINS Objection Nos. 6 and 10. The Court OVERRULES Objection Nos. 23, 24, and 47. The Court declines to rule on the remaining objections which are not material to the outcome of the motion.
“A moving party defendant is entitled to summary judgment if it establishes a complete defense to the plaintiff’s causes of action, or shows that one or more elements of each cause of action cannot be established. [Citation.] A moving party defendant bears the initial burden of production to make a prima facie showing that no triable issue of material fact exists. Once the initial burden of production is met, the burden shifts to the responding party plaintiff to demonstrate the existence of a triable issue of material fact. [Citation.] From commencement to conclusion, the moving party defendant bears the burden of persuasion that there is no triable issue of material fact and that the defendant is entitled to judgment as a matter of law. [Citation.]” (Eriksson v. Nunnink (2011) 191 Cal.App.4th 826, 847-848.)
The Complaint alleges a single cause of action for declaratory relief. Code of Civil Procedure section 1060, which governs actions for declaratory relief, provides: “Any person interested under a written instrument …, or under a contract, or who desires a declaration of his or her rights or duties with respect to another … may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action … for a declaration
of his or her rights and duties in the premises, including a determination of any question of construction or validity arising under the instrument or contract.”
“Declaratory relief operates prospectively, serving to set controversies at rest before obligations are repudiated, rights are invaded or wrongs are committed. Thus the remedy is to be used to advance preventive justice, to declare rather than execute rights. [Citation.] Declaratory relief serves a practical purpose in stabilizing an uncertain or disputed legal relation, thereby defusing doubts which might otherwise lead to subsequent litigation. [Citation.]” (Kirkwood v. California State Automobile Assn. Inter-Ins. Bureau (2011) 193 Cal.App.4th 49, 59.)
“Summary judgment is appropriate in a declaratory relief action when only legal issues are presented for the court’s determination.” (California Public Records Research, Inc. v. County of Yolo (2016) 4 Cal.App.5th 150, 185.) The defendant’s burden in a declaratory relief action “is to establish the plaintiff is not entitled to a declaration in its favor. It may do this by establishing (1) the sought-after declaration is legally incorrect; (2) undisputed facts do not support the premise for the sought-after declaration; or (3) the issue is otherwise not one that is appropriate for declaratory relief.” (Gafcon, Inc. v. Ponsor & Associates (2002) 98 Cal.App.4th 1388, 1401-1402.)
In determining the issues that a motion for summary judgment must address, courts look to the pleadings. The function of the pleadings in a motion for summary judgment is to delimit the scope of the issues and to frame the outer measure of materiality in a summary judgment proceeding. (FPI Development, Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 381.)
As stated above, the Complaint alleges there is a present and actual controversy between Plaintiff and CAMHP which pertains to the interpretation and effect of the Instructions and General Manager Fred Lester’s performance of the LLC duties. (Complaint at ¶ 11.) Plaintiff contends the Instructions require the General Manager to exercise the Option and complete purchase of the Property without delay. (Id. at ¶ 12.) By contrast, defendant CAMHP claims the Instructions were merely a guide to the LLC General Manager that allows for an exploration of the possibility of purchasing the Property and that it contains no explicit language to that purpose. (Ibid.)
On the motion for summary judgment, defendant CAMHP argues there is no actual controversy to support declaratory relief.
To qualify for declaratory relief under Code of Civil Procedure section 1060, a plaintiff is required to show two essential elements: (1) a proper subject of declaratory relief; and (2) an actual controversy involving justiciable questions relating to the rights or obligations of a party. (Lee v. Silveira (2016) 6 Cal.App.5th 527, 546.) “The ‘actual controversy’ language in … section 1060 encompasses a probable future controversy relating to the legal rights and duties of the parties.” (Environmental Defense Project of Sierra County v. County of Sierra (2008) 158 Cal.App.4th 877, 885 (Environmental Defense).) It does not embrace controversies that are “conjectural, anticipated to occur in the future, or an attempt to obtain an advisory opinion from the court.” (Brownfield v. Daniel Freeman Marina Hospital (1989) 208 Cal.App.3d 405, 410.)
Whether a claim presents an “actual controversy” within the meaning of Code of Civil Procedure section 1060 is a question of law. (Environmental Defense, supra, 158 Cal.App.4th at p. 885.) When an actual controversy does exist, Code of Civil Procedure section 1061 gives the trial court discretion to determine whether it is “necessary” and “proper” to exercise the power to provide declaratory relief. (Code Civ. Proc., § 1061.)
The critical issue in the case is whether the General Manager of the LLC was required to exercise the Option and complete the purchase of the Property without delay. To resolve this issue, the Court would need to examine and interpret the language set forth in the Instructions and the Operating Agreement. However, as the opposition points out, defendant CAMHP barely addresses the actual language and interpretation of the documents at issue. Instead, CAMHP argues: (1) LLC members understood that CAMHP would be obligated to utilize seller financing if it exercised the option; (2) Plaintiff’s conduct in this action is inconsistent with exercising the Option; and (3) Plaintiff is unable to obtain 62.5% of the members to approve any exercise of the Option.
Defendant CAMHP first argues that the issue of seller financing was one of the major open questions that its members were contemplating in connection with the decision of whether to exercises the option. (See Declaration of Frederick Lester at ¶ 8.) CAMHP claims its members understood that, when they signed the Written Consent, CAMHP would not be obligated to utilize Seller Financing, as provided under section 28 of the DiTomaso Lease. Section 28, which is referred to as “Seller Financing,” provides:
OPTION TO PURCHASE
During the term of the Lease the Lessee may purchase the Lessor’s real property at any time on the following terms: 29% down in cash and the balance over 15 years at interest of 8% per annum. The balance is to be represented by a promissory note providing for equal annual payments plus accrued interest on the anniversary date of closing purchase transaction. Said note shall be secured by deed of trust on the realty.
(Declaration of Frederick Lester at ¶ 8.)
In support, defendant CAMHP relies on an email sent by Frederick Lester to the membership where he allegedly confirmed that all members “support[ed]” and understood that CAMHP could purchase the Di Tomaso Property “outside section 28, and without preconditions.” (CAMHP’s Separate Statement of Undisputed Facts at No. 11.) CAMHP argues that Plaintiff never advised the members of the fact that they would be obligated to utilize Seller Financing if the purchase option was exercised. This argument is not supported by legal authority and appears to be underdeveloped as defendant CAMHP fails to articulate why the issue of Seller Financing should preclude Plaintiff’s claim for declaratory relief. (See Badie v. Bank of America (1998) 67 Cal. App. 4th 779, 784-785 [“[w]hen [a party] fails to raise a point, or asserts it but fails to support it with reasoned argument and citations to authority, we treat the point as waived”]; see also Schaeffer Land Trust v. San Jose City Council (1989) 215 Cal.App.3d 612, 619, fn. 2 [“a point which is merely suggested by a party’s counsel, with no supporting argument or authority, is deemed to be without foundation and requires no discussion”].) Nor is the issue of Seller Financing incorporated as part of the
Written Consent executed by the membership to establish guidelines for exercising the option. If anything, the issue of Seller Financing appears to be a factual matter to be weighed by the trier of fact during trial for the purpose of determining whether Plaintiff is entitled to declaratory relief. This contention therefore does not weigh in favor of summary judgment.
Plaintiff’s Conduct was Inconsistent with Exercising the Option
Defendant CAMHP also argues Plaintiff engaged in various actions that are inconsistent with exercising the option. Such actions include the following: (1) Plaintiff agreed in “principle” that CAMHP should sell the mobile home park, but only so long as he received $10 million of any sales proceeds; (2) at no time before the filing of the Complaint in this action did Plaintiff ever demand in writing that David Hover or Frederick Lester, as the General Managers, exercise the option; and (3) Plaintiff never took any action to remover David Hover and Frederick Lester as General Managers. (See CAMHP’s Separate Statement of Undisputed Facts at Nos. 22, 24, 26.) Again, these arguments are undeveloped as defendant CAMHP fails to explain why these actions should preclude Plaintiff’s claim for declaratory relief. Nor does CAMHP provide any legal authority in support of this contention. In addition, to the extent that Plaintiff engaged in conduct inconsistent with exercising the option, this raises merely a factual issue to be considered by the trier of fact in deciding whether Plaintiff is entitled to declaratory relief. This argument therefore does not support a basis for summary judgment.
Insufficient Membership to Approve Exercise of Purchase Option
Even if Plaintiff intended for the General Manager to exercise the option, defendant CAMHP argues Plaintiff cannot obtain approval from 62.5% of the voting members. It is undisputed that Plaintiff holds a 50% ownership and voting interest in CAMHP. (See CAMHP’s Separate Statement of Undisputed Facts at No. 3.) In support, CAMHP provides evidence showing that Frederick Lester and Linda Lester each hold a 25% ownership interest in CAMHP. (See CAMHP’s Separate Statement of Undisputed Facts at Nos. 4, 5.) Both Frederick Lester and Linda Lester submit declarations signed under penalty of perjury stating that, after considering the possible financial repercussions, they do not believe exercising the option would be in the best interests of the membership. (Id. at Nos. 31-32; Declaration of Frederick Lester at ¶ 25; Declaration of Linda Lester at ¶ 7.)
With this argument, defendant CAMHP appears to argue that Plaintiff’s request for declaratory relief is moot as 50 percent of the voting membership no longer has any interest in exercising the option. Moot cases are those in which an actual controversy did exist but, by the passage of time or a change in circumstances, ceased to exist. (Wilson & Wilson v. City Council of Redwood City (2011) 191 Cal.App.4th 1559, 1573.) “When events render a case moot, the court, whether trial or appellate, should generally dismiss it.” (Id. at p. 1574.)
Here, the Written Consent was signed by Plaintiff, Frederick Lester and Linda Lester among other members allegedly for the purpose of exercising the Option to purchase the Property. (See CAMHP’s Evidence at Exhibit 3.) The Written Consent was also signed by Jean A. Denning and Leland E. Lester on behalf of various trusts. (Ibid.) Defendant CAMHP however does not submit any evidence regarding the respective ownership and voting interests of Jean A. Denning or Leland E. Lester. For example, if Jean A. Denning and Leland E. Lester each held a 10% interest, combined with Plaintiff’s 50%, this would result in 70% approval
thus exceeding the required 62.5% necessary to exercise the Option. In fact, Plaintiff argues in opposition that Jean A. Denning held at least a 6% interest thus calling into question whether Frederick Lester and Linda Lester each held a 25% ownership and voting interest. (See Plaintiff’s Disputed Facts at Nos. 2, 4, 5.) Furthermore, as the opposition points out, no vote has been taken to modify, change or reverse the Written Consent in accordance with Section 5.6.2 of the Operating Agreement. (See Plaintiff’s Additional Facts at Nos. 2, 3.) This argument therefore does not provide a basis for summary judgment.
Finally, defendant CAMHP raises the remaining arguments in support of the motion: (1) Plaintiff never objected to the retention of the Greenfield firm which advised CAMHP about risks associated with purchase of the land; (2) David Hover informed CAMHP and the Greenfield firm that the members needed to get a good understanding of the risks and worst case scenarios before exercising the Option; and (3) Plaintiff demanded that Mr. Gregory, attorney for the heirs of Pauline Di Tomaso, retract his claim that CAMHP had exercised the Option. (See CAMHP’s Separate Statement of Undisputed Facts at Nos. 12, 14, 28, 29, 30.) These arguments however are undeveloped as defendant CAMHP fails to explain why these actions should preclude Plaintiff’s claim for declaratory relief. Nor does defendant cite any legal authority in support of these contentions which appear to be factual issues to be resolved at the time of trial. Consequently, such arguments do not provide grounds for summary judgment.
The motion for summary judgment is DENIED.
Footnote 1: The Owners and San Francisco Pizza are represented by different counsel and, therefore, filed separate oppositions. San Francisco Pizza’s opposition purports to join in the Owners’ opposition and incorporate by reference its own oppositions to two prior demurrers filed by other defendants in this matter.
Footnote 2: In the initial memorandum, this argument is made under the heading “There are Issues Regarding the Verification of the FAC” and appears to relate to the demurrer to the entire pleading on the ground of uncertainty. In Defendants’ reply, however, they additionally state that they are “demurr[ing] to the verification on the grounds of uncertainty.” (Reply at p. 8:10-11, emphasis added.) This assertion is anomalous as Code of Civil Procedure section 430.50, subdivision (a) does not contemplate a demurrer to a pleading’s verification. Rather, that statute clearly states a demurrer to a complaint may be directed to the entirety of the pleading or to any causes of action therein. As such, the Court will disregard the contention made in reply that Defendants are demurring to the verification.
Footnote 3: Incidentally, Defendants’ memorandum includes a section discussing the general principle a plaintiff may not allege inconsistent facts. (See Dem. at p. 4:9-14.) It does not, however, tether this statement of law to any particular demurrer argument. Instead, it merely concludes at the end of this section that “[t]o the extent Plaintiffs allege ultimate facts which are inconsistent with a purported cause of action against [Defendants], Plaintiffs fail to state a cause of action.” (Dem. at p. 4:13-14.)
Footnote 4: The Court otherwise observes that, even if this contention was advanced relative to the ground of failure to state sufficient facts, it would not be well-taken as the issue of reasonableness of a plaintiff’s reliance is a question of fact inappropriate for resolution on demurrer. (See All. Mortg., supra, 10 Cal.4th at 1239.)
Footnote 5: This allegation appears in the first cause of action for trespass but is incorporated by reference in the second and third causes of action for conversion and intentional interference with prospective economic advantage.
Footnote 6: In Credit Managers Assn. v. National Independent Business Alliance (1984) 162 Cal. App. 3d 1166 [209 Cal. Rptr. 119], the court explained: ‘An assignment for [the] benefit of creditors is a business liquidation device available to an insolvent debtor as an alternative to formal bankruptcy proceedings.’ [Citation.]” (Sherwood Partners, Inc. v. EOP-Marina Business Center, LLC (2007) 153 Cal.App.4th 977, 981 – 982 (Sherwood).) “An assignment for the benefit of creditors is a recognized but less than comprehensive statutory procedure that is an alternative to liquidation in bankruptcy. [Citations.]” (Berg & Berg Enterprises, LLC v. Boyle (2010) 178 Cal.App.4th 1020, 1025, fn. 1.) The assignee is supposed to be as a disinterested third party who would then liquidate and distribute the assets of the assignor to creditors. (Sherwood, supra, 153 Cal.App.4th at p. 982.) The assignee for the benefit of creditors has “a duty to marshal and protect the assets of tenant, which may include filing and defending lawsuits.” (Id. at p. 983.)
Footnote 7: See Separate Statement of Undisputed Facts in in Support of Motion for Summary Judgment or, in the Alternative, Summary Adjudication of Issues (“Defendants’ SSUF”), Issue No. 1, Fact No. 49.
Footnote 8: See Defendants’ SSUF, Issue No. 1, Fact No. 4.
Footnote 9: See Defendants’ SSUF, Issue No. 1, Fact No. 37.
Footnote 10: See Defendants’ SSUF, Issue No. 1, Fact No. 38.
Footnote 11: See Defendants’ SSUF, Issue No. 1, Fact No. 39.
Footnote 12: See Defendants’ SSUF, Issue No. 1, Fact No. 40.
Footnote 13: See Defendants’ SSUF, Issue No. 1, Fact No. 43.
Footnote 14: See Defendants’ SSUF, Issue No. 1, Fact No. 52.
Footnote 15: See Defendants’ SSUF, Issue No. 1, Fact No. 53.
Footnote 17: See Defendants’ SSUF, Issue No. 8, Fact No. 60.
Footnote 18: See Plaintiff’s Separate Statement of Disputed and Undisputed Material Facts in Opposition, etc. (“Plaintiff’s SS”), Issue No. 8, Fact No. 60.
Footnote 19: See Plaintiff’s Additional Undisputed Material Facts, etc. (“Plaintiff’s AMF”), Fact No. 116. 20
Footnote 21: See Plaintiff’s AMF, Fact No. 118.
Footnote 22: See Plaintiff’s AMF, Fact No. 90.
Footnote 23: Id.
Footnote 24: See Plaintiff’s AMF, Fact No. 91.
Footnote 25: See Plaintiff’s AMF, Fact No. 120.
Footnote 26: See Plaintiff’s AMF, Fact Nos. 116 and 121.
Footnote 27: See Plaintiff’s AMF, Fact No. 90.
Footnote 28: See Plaintiff’s AMF, Fact No. 122.
Footnote 29: See Defendants’ SSUF, Issue No. 3, Fact No. 14. See also Plaintiff’s SS, Issue No. 3, Fact No. 14. 30
Footnote 31: See Plaintiff’s AMF, Fact No. 124.
Footnote 32: See Plaintiff’s AMF, Fact No. 125.
Footnote 34: See Defendants’ SSUF, Issue No. 4, Fact No. 85.
Footnote 35: See Defendants’ SSUF, Issue No. 5, Fact No. 22.
Footnote 36: See Plaintiff’s AMF, Fact No. 89.
Footnote 37: See Defendants’ SSUF, Issue No. 5, Fact Nos. 10 – 15.
Footnote 38: See Defendants’ SSUF, Issue No. 5, Fact Nos. 22 – 26.
Footnote 39: See Defendants’ SSUF, Issue No. 5, Fact No. 16.
Footnote 40: See Defendants’ SSUF, Issue No. 5, Fact No. 31.
Footnote 42: See Plaintiff’s AMF, Fact No. 108.
Footnote 44: See Defendants’ SSUF, Issue No. 5, Fact No. 15.
Footnote 45: See Defendants’ SSUF, Issue No. 5, Fact No. 16.
Footnote 46: See Defendants’ SSUF, Issue No. 5, Fact No. 17.
Footnote 47: See Defendants’ SSUF, Issue No. 5, Fact No. 18.
Footnote 48: See Defendants’ SSUF, Issue No. 5, Fact No. 64.
Footnote 49: See Defendants’ SSUF, Issue No. 5, Fact No. 65.
Footnote 50: See Defendants’ SSUF, Issue No. 5, Fact Nos. 66 – 67.
Footnote 51: See Defendants’ SSUF, Issue No. 5, Fact No. 68
Footnote 52: See Defendants’ SSUF, Issue No. 5, Fact No. 70.
Footnote 53: See Plaintiff’s AMF, Fact Nos. 90, 100, 121, and 122.
Footnote 54: See Plaintiff’s AMF, Fact Nos. 131 – 133. See also Plaintiff’s SS, Issue No. 5, Fact No. 25.
Footnote 55: See Defendants’ SSUF, Issue No. 8, Fact No. 77 and Issue No. 9, Fact No. 76. 56
Footnote 57: See Defendants’ SSUF, Issue No. 9, Fact No. 1.
Footnote 58: See Defendants’ SSUF, Issue No. 9, Fact No. 82.
Footnote 59: See Defendants’ SSUF, Issue No. 9, Fact No. 78.
Footnote 60: See Defendants’ SSUF, Issue No. 9, Fact No. 80.