Case Name: Louis Christopher Arriaga, et al. v. Jason Lara, et al.
Case No.: 17CV310003

This matter arises from a dispute between Louis Christopher Arriaga, the sole shareholder of Arriaga & Associates, Inc. (collectively “Plaintiff”) and Plaintiff’s former employees Jason Lara and Jose Segura and the business entity they had previously formed, Maddison Group, Inc. (collectively “Defendants”). Following the granting of Defendants’ motion for summary judgment directed at Plaintiff’s First Amended Complaint on March 15, 2018, the Court issued a Judgment in Defendants’ favor on July 13, 2018. What remains of the action is the Cross-Complaint filed by Defendants Jason Lara and Jose Segura only (“Cross-Complainants”) on October 3, 2017 stating 26 causes of action. The bulk of the Cross-Complaint is now alleged by Cross-Complainant Jose Segura only as cross-claims 1-16 and 19-26 as alleged by Jason Lara were dismissed without prejudice on March 1, 2018.

Currently before the Court are two separate motions for judgment on the pleadings (“JOP”) both filed by Plaintiff on April 26, 2018 and directed at Defendants’ Cross-Complaint, and Defendants’ motion for summary adjudication (“MSA”) of the tenth and eleventh causes of action in their Cross-Complaint, filed May 30, 2018.

I. Plaintiff’s Motions for JOP
A motion for judgment on the pleadings “is equivalent to a belated general demurrer.” (Sprague v. County of San Diego (2003) 106 Cal.App.4th 119, 127.) Except as provided by statute, Code of Civil Procedure (“CCP”) § 438, the rules governing demurrers apply. (See County of Orange v. Association of Orange County Deputy Sheriffs (2011) 192 Cal.App.4th 21, 32; Southern Calif. Edison Co. v. City of Victorville (2013) 217 Cal.App.4th 218, 227. See also Smiley v. Citibank (South Dakota) N.A. (1995) 11 Cal.4th 138, 146 [“[T]he trial court generally confines itself to the complaint and accepts as true all material facts alleged therein… [and] may extend its consideration to matters that are subject to judicial notice.”]) As with a demurrer, no extrinsic evidence (such as declarations) may be considered and the factual allegations in the pleading under attack are accepted as true for purposes of the motion. “[J]udgment on the pleadings must be denied where there are material factual issues that require evidentiary resolution.” (Schabarum v. California Legislature (1998) 60 Cal.App.4th 1205, 1216.)

The Court notes that CCP § 439, effective January 1, 2018, states that a party bringing a motion for JOP “shall file and serve” with the motion a declaration describing the meet and confer efforts now required to be made before filing such a motion. Neither of Plaintiff’s motions for JOP are accompanied by the required meet and confer declaration. While this is not a basis for denying the motions in and of itself, Plaintiff’s counsel is directed to comply with the statute in the future.

A. Requests for Judicial Notice: A precondition to judicial notice in either its permissive or mandatory form is that the matter to be noticed be relevant to the material issue before the Court. (Silverado Modjeska Recreation and Park Dist. v. County of Orange (2011) 197 Cal.App.4th 282, 307, citing People v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422 fn. 2.)

The purported requests for judicial notice made by Plaintiff in support of both motions for JOP and the one reply filed by Plaintiff are all DENIED for failure to comply with California Rule of Court 3.1113(l) (“Any request for judicial notice must be made in a separate document listing the specific items for which notice is requested and must comply with rule 3.1306(c).”) Furthermore, while two of these requests make reference to exhibits none are attached.

B. Motion for JOP #1
Plaintiff’s first motion for JOP (brought by Louis Arriaga and Arriaga & Associates, Inc.) is brought pursuant to CCP § 438 and is directed at the seventeenth cross-claim only as alleged by Cross-Complainant Jason Lara on the grounds that he “voluntarily dismissed all wage claims against Cross-Defendants and therefore has no grounds upon which to sustain his UCL, B&P 17200 cause of action and that in addition, that the remaining cause of action is entirely based on wage claims which are presently before the California State Labor Commissioner and a ruling by this court could lead to double recovery or conflicting holdings.” (Notice of Motion at 2:5-12.)

Plaintiff’s motion for JOP #1 is DENIED. Once again a motion for JOP is the functional equivalent of a general demurrer. A defendant or (as here) a cross-defendant’s motion for JOP can only be brought on two grounds pursuant to CCP § 438(c)(1)(B): that the court has no jurisdiction of the subject of the targeted cause of action, or; that the targeted cause of action does not state sufficient facts. Plaintiff has not established either ground.

Defendant’s argument that the seventeenth cause of action as alleged by Jason Lara is entirely based on his dismissed wage and hour claims is incorrect. The seventeenth cause of action incorporates all prior paragraphs by reference and alleges (Cross-Complaint at para. 81) that “Cross-Defendants have engaged in (and continue to engage in) unfair and unlawful business practices in California by practicing, employing and utilizing the employment practices outlined above, including California Labor Code §§ 226, 226.7, 226.8, 512, 1985.5, and 2802, and Industrial Wage Order Nos. 4-2001, Sections 3, 9, 11 and 12.” (Court’s emphasis.)

“Business and Professions Code section 17200 et seq. prohibits unfair competition, including unlawful, unfair, and fraudulent business acts. The UCL covers a wide range of conduct. It embraces anything that can properly be called a business practice and that at the same time is forbidden by law.” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1143.) “By proscribing unlawful business practices, the UCL borrows violations of other laws and treats them as independently actionable. In addition, practices may be deemed unfair or deceptive even if not proscribed by some other law. Thus, there are three varieties of unfair competition: practices which are unlawful, or unfair, or fraudulent.” (Blakemore v. Superior Court (2005) 129 Cal.App.4th 36, 48 [emphasis added].)

The factual allegations in the Cross-Complaint at paragraphs 1-18, assumed to be true for purposes of this motion, state sufficient facts to support the seventeenth cause of action as alleged by Jason Lara regardless of his dismissal of other claims.

As for Plaintiff’s argument that the Court’s ability to rule on the seventeenth cross-claim is somehow constrained by proceedings before the California State Labor Commissioner, this is not a basis for granting the motion for JOP. While the Cross-Complaint admits (at para. 18) that Cross-Complainants filed a complaint with the Labor & Workforce Development Agency, Plaintiff has not shown that this has resulted in any administrative decision or that any such decision would bar the Court from ruling on the seventeenth cross-claim. The Labor Commissioner has no jurisdiction to decide an unfair business practices claim. (See Noble v. Draper (2008) 160 Cal.App.4th 1, 16-17.)

C. Motion for JOP #2
Plaintiff’s second motion for JOP (brought by Louis Arriaga only) is also brought pursuant to CCP § 438 and is made “on the grounds that Jason Lara and Jose Segura have failed to plead that Louis Arriaga personally employed them and have failed to state any basis for personal liability against Louis Arriaga and claims 1-17 and 19-26 must therefore be thrown out as against Louis Arriaga.” (Notice of Motion at 2:8-11.)

Plaintiff’s Motion for JOP #2 is GRANTED WITHOUT LEAVE TO AMEND as it is unopposed by Cross-Complainants.

II. Cross-Complainants’ motion for summary adjudication
The pleadings limit the issues presented for summary judgment or adjudication. (See Government Employees Ins. Co. v. Sup. Ct. (2000) 79 Cal.App.4th 95, 98; Laabs v. City of Victorville (2008) 163 Cal.App.4th 1242, 1258; Nieto v. Blue Shield of Calif. Life & Health Ins. (2010) 181 Cal.App.4th 60, 73 [“the pleadings determine the scope of relevant issues on a summary judgment motion.”].) The moving party bears the initial burden of production to make a prima facie showing that there are no triable issues of material fact. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an “issue of duty.” (See CCP §437c(f)(1); McClasky v. California State Auto. Ass’n (2010) 189 Cal.App.4th 947, 975 [“If a cause of action is not shown to be barred in its entirety, no order for summary judgment—or adjudication—can be entered.”]; Palm Spring Villas II Homeowners Association, Inc. v. Parth (2016) 248 Cal.App.4th 268, 288.) Summary adjudication of general “issues” or of facts is not permitted. (See Raghavan v. The Boeing Company (2005) 133 Cal.App.4th 1120, 1136.) CCP § 437c(t) sets forth the only mechanism for seeking adjudication of a “legal issue” or “claim for damages” that does not completely dispose of a cause of action.

Where a plaintiff (or cross-complainant) seeks summary judgment or adjudication, the burden is to produce admissible evidence on each element of a “cause of action” entitling him or her to judgment. (CCP § 437c(p)(1); S.B.C.C., Inc. v. St. Paul Fire & Marine, Ins. Co. (2010) 186 Cal.App.4th 383, 388. This means that plaintiffs who bear the burden of proof at trial by a preponderance of evidence must produce evidence that would require a reasonable finder of fact to find any underlying material fact more likely than not. “Otherwise, he would not be entitled to judgment as a matter of law.” (Aguilar, supra at p. 851; LLP Mortgage v. Bizar (2005) 126 Cal.App.4th 773, 776 [burden is on plaintiff to persuade court there is no triable issue of material fact].)

Cross-Complainants’ motion seeks “Declaratory Relief on the Tenth and Eleventh Causes of Action of the Cross-Complaint as against Louis Arriaga and Arriaga & Associates.” (Notice of Motion at 2:3-5.)

The tenth and eleventh causes of action are both claims for declaratory relief. The Cross-Complaint’s tenth cause of action for declaratory relief alleges in pertinent part (at paragraphs 59-61) that “[a]n actual controversy has arisen and now exist between Cross-Complainants and Cross-Defendants concerning their respective rights and duties in that Cross-Complainants contend that Cross-Defendants violated California Labor Code § 226.7 (First Cause of Action) herein. Cross-Complainants desire a judicial determination of Cross-Defendants’ violation of California Labor Code § 226.7. A judicial declaration is necessary and appropriate under the circumstances in order that Cross-Complainants may ascertain its [sic] rights.” The eleventh cause of action for declaratory relief in turn alleges in pertinent part (at paragraphs 62-64) that “[a]n actual controversy has arisen and now exists between Cross-Complainants and Cross-Defendants concerning their respective rights and duties in that Cross-Complainants contend that Cross-Defendants violated California Labor Code § 512 and Industrial Wage Order No. 4-2001, Section 11. Cross-Complainants desire a judicial determination of Cross-Defendants’ violation of California Labor Code § 512 and Industrial Wage Order No. 4-2001, Section 11 (Second Cause of Action). A judicial declaration is necessary and appropriate under the circumstances in order that Cross-Complainants may ascertain its [sic] rights.”

Cross-Complainants’ MSA is DENIED as follows.

As an initial matter, the motion is DENIED in its entirety as brought by Cross-Complainant Jason Lara. Having dismissed the tenth and eleventh cross-claims (as well as the first and second cross-claims they are entirely dependent upon), Lara cannot now seek summary adjudication of those same cross-claims.

The MSA is also DENIED in its entirety as brought by Cross-Complainant Jose Segura for failure to meet the initial burden as “the propriety of the application of [summary judgment to] declaratory relief lies in the trial court’s function to render such a judgment when only legal issues are presented for its determination.” (City of Torrance v. Castner (1975) 46 Cal.App.3d 76, 83, fn. 3.) The tenth and eleventh cross-claims do not present only legal issues for determination as they depend entirely upon resolution of the disputed facts of the first and second cross-claims, which are not subjects of the current motion.

More fundamentally summary adjudication of the tenth and eleventh cross-claims is denied because they are both improper attempts to use the declaratory relief statute (CCP § 1060) to duplicate other cross-claims arising entirely from alleged past wrongs. The Court notes that it is undisputed that both Cross-Complainants are no longer employed by Plaintiff. (See Cross-Complaint at 1 and 5.) There is no continuing relationship between Mr. Segura and Plaintiff that might require guidance from the Court moving forward and, assuming for purposes of argument that Plaintiff did in fact violate Labor Code §§ 226.7 or 512 during Mr. Segura’s employment, such violations could only be rationally characterized as past wrongs. “Declaratory relief operates prospectively, serving to set controversies at rest. If there is a controversy that calls for a declaration of rights, it is no objection that past wrongs are also to be redressed; but there is no basis for declaratory relief where only past wrongs are involved. Hence, where there is an accrued cause of an action for an actual breach of contract or other wrongful act, declaratory relief may be denied.” (Witkin, California Procedure, (5th Ed., 2008) 5 Pleading § 869, p. 284, Court’s emphasis.) “The requirement that plaintiffs seeking declaratory relief allege ‘the existence of an actual present controversy’ would be illusory if a plaintiff could meet it by simply pointing to the very lawsuit in which he or she seeks that relief.” (City of Cotati v. Cashman (2012) 29 Cal.4th 69, 80 [internal citation omitted].)

Pursuant to CCP § 1061 the Court “may refuse to exercise the power granted by this chapter in any case where its declaration or determination is not necessary or proper at the time under all the circumstances.” Here it would be improper to issue the declaratory judgments requested, as both the tenth and eleventh cross-claims wholly concern past wrongs and are entirely duplicative of other cross-claims. (See Osseous Technologies of America, Inc. v. DiscoveryOrtho Partners LLC (2010) 119 Cal.App.4th 357 [where there is an accrued cause of action for an actual breach of contract or other wrongful act, declaratory relief may be denied].)