Case Number: 19STCV15343 Hearing Date: February 10, 2020 Dept: 37

HEARING DATE: February 10, 2020

CASE NUMBER: 19STCV15343

CASE NAME: Katy M. Setoodeh, M.D. v. Saint John’s Multispecialty Medical Group, Inc., dba Doctors of St. John’s Medical Group, a California Corporation, et al.

MOVING PARTY: Defendants, Providence St. John’s Medical Foundation, Providence St. John’s Health Clinic and Providence St. John’s Health Center

OPPOSING PARTY: Plaintiff, Katy M. Setoodeh, M.D.

TRIAL DATE: March 2, 2021

PROOF OF SERVICE: OK

MOTION: Defendants’ Demurrer to the Second Amended Complaint,

OPPOSITION: January 28, 2020

REPLY: February 3, 2020

TENTATIVE: Providence Defendants’ demurrer to the seventh and eighth causes of action is sustained. Plaintiff is given leave to amend within 30 days of this date. Providence Defendants are to provide notice.

BACKGROUND

This action arises out of Plaintiff, Katy M. Setoodeh, M.D (“Plaintiff”)’s employment with Defendant, Saint John’s Multispecialty Medical Group (“Saint John’s”). Plaintiff alleges that Saint John’s employs doctors who provide medical services at Providence Saint John’s Medical Foundation (“Foundation”, erroneously sued as “Providence St. John’s Medical Foundation”), and Providence Saint John’s Health Center d/b/a Saint John’s Health Clinic (“Center”) (erroneously sued as “Providence St. John’s Health Clinic, Providence St. John’s Hospital, Providence St. John’s Health Center, and St. John’s Providence Health Systems”) (the “Providence Defendants”).

Plaintiff alleges that she was hired by Saint John’s and entered into an employment contract, to which the Providence Defendants were not parties. However, the Providence Defendants allegedly were aware of the contract between Plaintiff and Saint John’s as Katherine Kerr, a Providence employee, discussed the contract with Plaintiff. Plaintiff alleges that she was hired as one of Saint John’s s founding staff and that beginning in 2014, she began receiving communications regarding transition to electronic medical records. However, Plaintiff alleges that while she was told her examination rooms would be built out to accommodate the new systems, they were never built out, and she was expected to use computers placed in such a way that she developed carpal tunnel syndrome and pain in her neck, arms and hands. Plaintiff alleges that she continued attempting to seek the appropriate ergonomic accommodation over the next several years, but that her requests were repeatedly dismissed and she was eventually terminated for “her disability, requests for accommodation and need for leave in February 2018.

Plaintiff’s Complaint alleged five causes of action against each of the Defendants: (1) discrimination based on disability in violation of the Fair Housing Employment Act (“FEHA”), (2) failure to accommodate disability in violation of the FEHA, (3) failure to engage in the interactive process in violation of the FEHA, (4) failure to take all reasonable steps to prevent discrimination and retaliation in violation of the FEHA, (5) retaliation in violation of the FEHA.

On June 27, 2019, Plaintiff filed a First Amended Complaint, which added three causes of action as follows: (6) wrongful termination in violation of public policy, (7) intentional interference with contractual relations, and (8) intentional interference with prospective economic relations. Only the seventh and eighth causes of action are alleged against Providence Defendants, and the remaining causes of action are alleged against Saint John’s.

On October 17, 2019, the court sustained the Providence Defendants’ demurrer to seventh and eighth causes of action of the FAC, with leave to amend.

On November 6, 2019, Plaintiff filed her Second Amended Complaint (“SAC”), which alleges the same eight causes of action. Providence Defendants now demurrer to the seventh and eighth causes of action of the SAC on the grounds that each fails to state a cause of action as to Providence Defendants. Plaintiff opposes the demurrer.

REQUEST FOR JUDICIAL NOTICE

Providence Defendants request, pursuant to Evidence Code sections 452 and 453, that the court take judicial notice of all of the following:

The written contract between Plaintiff and Saint John’s, entitled “Professional Employment Agreement” effective February 1, 2014, Bates numbered SETOODEH000001-20.

The Charge filed by Plaintiff with the Department of Fair Employment and Housing (“DFEH”) and the accompanying Right-to-Sue letter, both dated May 3, 2018.

The Amended Charge filed by Plaintiff with the DFEH, dated June 1, 2018.

The request for judicial notice is GRANTED as to the documents filed with the DFEH. The existence and legal effect of these documents are judicially noticeable; reasonably disputable assertions of fact contained therein are not. (Evid. Code, § 452, subds. (b), (h).)

DEMURRER[1]

Legal Standard

A demurrer is an objection to a pleading, the grounds for which are apparent from either the face of the complaint or a matter of which the court may take judicial notice. (Code Civ. Proc., § 430.30, subd. (a); see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The purpose of a demurrer is to challenge the sufficiency of a pleading “by raising questions of law.” (Postley v. Harvey (1984) 153 Cal.App.3d 280, 286.) The court “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. . . .” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525 (Berkley).) “In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” (Code Civ. Proc., § 452; see also Stevens v. Sup. Ct. (1999) 75 Cal.App.4th 594, 601.) “When a court evaluates a complaint, the plaintiff is entitled to reasonable inferences from the facts pled.” (Duval v. Board of Trustees (2001) 93 Cal.App.4th 902, 906.)

The general rule is that the plaintiff need only allege ultimate facts, not evidentiary facts. (Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550.) “All that is required of a plaintiff, as a matter of pleading, even as against a special demurrer, is that his complaint set forth the essential facts of the case with reasonable precision and with sufficient particularity to acquaint the defendant with the nature, source and extent of his cause of action.” (Rannard v. Lockheed Aircraft Corp. (1945) 26 Cal.2d 149, 156-157.) “[D]emurrers for uncertainty are disfavored and are granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond.” (Mahan v. Charles W. Chan Ins. Agency, Inc. (2017) 14 Cal.App.5th 841, 848, fn. 3 (Mahan), citing Lickiss v. Fin. Indus. Regulatory Auth. (2012) 208 Cal.App.4th 1125, 1135.) In addition, even where a complaint is in some respects uncertain, courts strictly construe a demurrer for uncertainty “because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616.)

Demurrers do not lie as to only parts of causes of action where some valid claim is alleged but “must dispose of an entire cause of action to be sustained.” (Poizner v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 119.) “Generally it is an abuse of discretion to sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment.” (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.)

Analysis

The Providence Defendants’ demurrer to both the seventh and eighth causes of action on the following grounds: (1) the SAC fails to allege that the Providence Defendants are “strangers” to Plaintiff’s employment contract with Saint John’s such that the Providence Defendants can be held liable under these causes of action, and (2) the SAC fails to allege that the Providence Defendants did anything to intentionally interfere with Plaintiff and Saint John’s contractual relationship. (Motion, 18-19.)

Intentional Interference with Contractual Relations

“The elements of a cause of action for intentional interference with contractual relations are “(1) the existence of a valid contract between the plaintiff and a third party; (2) the defendant’s knowledge of that contract; (3) the defendant’s intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.” (Redfearn v. Trader Joe’s Co. (2018) 20 Cal.App.5th 989, 997 (“Redfearn”).) Only a “a stranger to a contract” may be liable for interfering with it. (Mintz v. Blue Cross of California (2009) 172 Cal.App.4th 1594, 1603 [holding that administrative entity for insurance company cannot be held liable for interference with insurance contract it was charged with administering].) Further, “corporate agents and employees acting for and on behalf of a corporation cannot be held liable for inducing a breach of the corporation’s contract.” (Shoemaker v. Myers (1990) 52 Cal.3d 1, 24.)

Providence Defendants contend that the SAC still fails to sufficiently allege a cause of action for intentional interference with contractual relations because it fails to allege that the Providence Defendants were “strangers” to the employment contract between Plaintiff and Saint John’s. (Motion, 12-17.) Providence Defendants further contend that the court previously found the FAC insufficient as to the intentional interference with contractual relations cause of action based on the FAC’s inclusion of alter ego allegations, and that Plaintiff’ SAC which removes all such allegations is thereby improper because it contradicts the FAC. Providence Defendants rely on Javor v. Taggart (2002) 98 Cal.App.4th 795 (Javor) for the proposition that Plaintiff’s removal of alter ego allegations constitutes improperly contradicting prior pleadings.

In Javor, Plaintiff, a government contractor, alleged a cause of action for violation of his federal civil rights against government employees and alleged in his original Complaint that the government employee defendants acted “within” the scope of their employment. (Id. at 810.) On the third amended complaint, Plaintiff instead alleged that these defendants acted “outside” the scope of their employment. (Id.) Given that Plaintiff first alleged that they acted “within” the scope of their employment, the Court of Appeal found that it was not required to consider the third amended complaint’s allegations about the defendants acting “outside” the scope of their employment as such allegations directly contradicted the allegations of the original complaint. (Id.) While Plaintiff’s prior allegations of alter ego and contention that the Providence Defendants were not strangers to the employment contract are somewhat contradicted by the omission of those allegations and the current position that they are strangers to the contract, they are not completely contradictory such that the current allegations may be treated as a sham pleading.

On opposition, Plaintiff contends that the Providence Defendants are strangers to her employment contract with Saint John’s because merely having economic interest does not preclude the Providence Defendants from being strangers. Plaintiff relies on Popescu v. Apples, Inc. (2016) 1 Cal.App.5th 39 (Popescu) for this proposition. Plaintiff’s reliance is correct. Popescu held that a third party which has “some interest” in the manner in which a Plaintiff performed his employment contract is not immune from tort liability for interfering with the contract. (Id. at 56.)

Here, the SAC alleges that the Providence Defendants were aware of Plaintiff’s employment contract with Saint John’s because Plaintiff discussed the contract with Katherine Kerr, who was an employee of Providence. (SAC ¶¶7, 9-10.) Further, the SAC alleges that Plaintiff contacted Ms. Kerr or her assistants from approximately 2015, when she allegedly began experiencing carpal tunnel pain, to inquire into why Providence Defendants allegedly continued to not build out her exam rooms as promised to accommodate the electronic medical record equipment. (SAC ¶¶ 13-14, 18, 20-24.) The SAC alleges that the Providence Defendants were responsible for providing equipment and technology to Plaintiff’s workplace, and that they “intended to disrupt the performance” of Plaintiff’s employment contract by failing to timely provide a build out of Plaintiff’s exam rooms so as to accommodate electronic medical equipment. (SAC ¶¶ 84-85.)

However, by alleging that the Providence Defendants either intended to disrupt or knew that a disruption was likely to occur if they did not build out the space sooner, Plaintiff has failed to positively allege that they acted with an intent to interfere with her contract. Here, the SAC pleads many instances of Katherine Kerr, who is a Providence employee interacting with Saint John’s employees. However, the allegations made do not show that the Providence Defendants had any obligation to build out the facilities or make changes that they did not complete or that their schedule for upgrading the facilities was in anyway intended to interfere with Plaintiff’s contract with Saint John’s.

Accordingly, the demurrer is sustained as to the seventh cause of action.

Intentional Interference with Prospective Economic Advantage

The elements of the tort of intentional interference with prospective economic advantage are “(1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant’s knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant.” (Marsh v. Anesthesia Services Medical Group, Inc. (2011) 200 Cal.App.4th 480, 504.)

Providence Defendants contend that the eighth cause of action for intentional interference with prospective economic advantage remains insufficiently pled because it does not plead that Providence Defendants engaged in “intentional acts” that interfered with Plaintiff’s employment, as Providence does not employ Plaintiff. (Motion, 18-19.) Providence Defendants contend that the allegations regarding FEHA violations can only pertain to Plaintiff’s employer. (Id.)

In opposition, Plaintiff contends that the SAC’s allegations regarding Providence Defendants “aiding and abetting” in Saint John’s alleged violations of FEHA are sufficient to sustain the eighth cause of action. (Opposition, 14-15.) Plaintiff contends that aiding and abetting in a violation of FEHA is independently wrongful pursuant to statute and controlling case law. (Id.)

Government Code section 12940, subdivision (i) provides that in addition to the other unlawful employment practices previously delineated, that it is also unlawful for any person to “aid, abet, incite, compel or coerce the doing of any of the acts forbidden under this part.” (see also Alch v. Superior Court (2004) 122 Cal.App.4th 339, 389 [ holding that talent agencies can be liable for aiding and abetting employer’s violation of FEHA if agencies knew of employer’s unlawful practice and gave substantial assistance.])

Here, the SAC alleges at paragraph 91 that the Providence Defendants engaged in wrongful conduct by “aiding and abetting Defendant Saint John’s discrimination against Plaintiff based on her disability.” (SAC, ¶ 91.) Further, the SAC alleges that the Providence Defendants, by engaging in this conduct, intended to disrupt Plaintiff’s employment relationship with Saint John’s. (SAC, ¶ 92.) However, these conclusory allegations are unsupported by factual allegations of the Providence Defendant’s acts to aid and abet. The Providence Defendants were under no obligation to engage in the interactive process or to make accommodations for Plaintiff. There are no allegations that the Providence Defendants aided Saint John’s in failing to engage in the interactive process, if it did, or in refusing to provide reasonable accommodations.

Accordingly, the demurrer to the eighth cause of action is SUSTAINED.

[1] Providence Defendants submit the declaration of their attorney, Camilo Echavarria (“Echavarria”) to demonstrate that they have met their statutory meet and confer obligations under Code of Civil Procedure section 430.41 prior to filing the instant demurrer. Echavarria attests that on November 11, 2019 and November 14, 2019, his office sent emails notifying Plaintiff that they intended to demurrer to the SAC. (Echavarria Decl. ¶ 11, Exhibit H.) On November 18, 2019, the parties agreed to meet and confer by telephone on November 20, 2019. (Echavarria Decl. ¶ 12, Exhibit I.) Thereafter, Echavarria attests that he is informed and believes the parties met and conferred in person at the November 20, 2019 case management conference but did not come to an agreement. (Echavarria Decl. ¶ 13.) Accordingly, Providence Defendants have sufficiently met and conferred prior to filing the instant motion.