In this employment dispute, plaintiff Gerald Bottero (“Plaintiff”) alleges that defendants Hoya Holdings, Inc. (“HHI”) and Hoya Corporation (“Hoya”) (collectively, “Defendants”) failed to pay him bonuses he was owed for the fiscal year ending March 31, 2013 under his employment contract. (See First Amended Complaint (“FAC”), ¶¶ 13-17.)

On October 21, 2013, Plaintiff filed his original complaint against HHI, asserting claims for (1) breach of written contract, (2) breach of implied covenant of good faith and fair dealing, and (3) declaratory relief. On November 22, HHI demurred on the basis that it is not a party to Plaintiff’s employment agreement and thus is not a proper party to this action. The Court (Hon. Elfving) issued a tentative ruling sustaining the demurrer without leave to amend on January 27, 2014. On January 28, Plaintiff filed a peremptory challenge to Judge Elfving. On January 29, this action was reassigned to Department 9. Judge Elfving never issued an order on HHI’s first demurrer. On February 4, Plaintiff filed the FAC, alleging the same three causes of action as in the original complaint against HHI and adding Hoya as a defendant to each claim. Currently before the Court is HHI’s second demurrer to these claims.

HHI’s demurrer is SUSTAINED without leave to amend.

Plaintiff’s allegations that Hoya is the 100% shareholder owner of HHI and HHI employs and pays individuals rendering services to Hoya (FAC, ¶¶ 9, 10) fail to support either of the two prongs of an alter ego theory. (See Zoran Corp. v. Chen (2010) 185 Cal.App.4th 799, 811 [“in order to prevail on an alter-ego theory, the plaintiff must show that ‘(1) there is such a unity of interest that the separate personalities of the corporations no longer exist; and (2) inequitable results will follow if the corporate separateness is respected’”], quoting Tomaselli v. Transamerica Ins. Co. (1994) 25 Cal.App.4th 1269, 1285; Neilson v. Union Bank of Cal., N.A. (C.D. Cal. 2003) 290 F.Supp.2d 1101, 1117 [pleading failed to allege injustice prong of alter ego theory where it stated that inequity would result but failed to allege facts supporting this statement]; see also Leek v. Cooper (2011) 194 Cal.App.4th 399, 418 [in order to show inequitable result, plaintiffs must allege some conduct amounting to bad faith; difficulty in enforcing a judgment does not suffice].) Plaintiff fails to allege even the conclusion that inequitable results will follow if Defendants’ corporate separateness is respected, and the only facts he pleads in support of the identity of interest between Defendants is that HHI is a subsidiary that employs and pays individuals rendering services to Hoya, which is inadequate to support this prong. (See Leek v. Cooper, supra, 194 Cal.App.4th at pp. 415, 418 [allegation that an individual owns all of the corporate stock and makes all of the management decisions is insufficient to cause the court to disregard the corporate entity; listing exemplary factors that may support the unity of interest prong].)

Further, Plaintiff’s allegations and the offer letter attached to the FAC establish that Hoya rather than HHI is the party to the agreement at issue. (See FAC, ¶¶ 13 [Plaintiff entered into the agreement offered “with HOYA” only], 15 [HHI “performed HOYA’s contractual obligations”], Ex. A, ¶ 1, 5(4-5).) Plaintiff’s allegation that he remained employed by HHI during the relevant time period (see FAC, ¶¶ 11, 12) is irrelevant, because this allegation does not bear on HHI’s status as a party to the specific agreement at issue, and Plaintiff does not allege that HHI owes him a bonus under a prior employment agreement to which it was a party. Further, while Plaintiff alleges that HHI performed certain of Hoya’s obligations under the contract, he does not allege that HHI became a party to the contract or assumed Hoya’s ultimate liability therein by doing so. To the contrary, Plaintiff clearly alleges that HHI pays individuals “as HOYA’s agent” and that these payments are “owed by HOYA but paid by HHI.” (FAC, ¶ 10.)

Plaintiff does not indicate how he would amend the FAC to state a claim against HHI on any theory, and it is not apparent how he could do so. Consequently, leave to amend is denied. (See Camsi IV v. Hunter Technology Corp. (1991) 230 Cal.App.3d 1525, 1542 [“absent an effective request for leave to amend in specified ways,” it is an abuse of discretion to deny leave to amend “only if a potentially effective amendment were both apparent and consistent with the plaintiff’s theory of the case”]; Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1387 [“An order sustaining a demurrer without leave to amend will constitute an abuse of discretion if there is any reasonable possibility that the defect can be cured by an amendment.”], italics original, internal quotations and citations omitted; Pacific States Enterprises, Inc. v. City of Coachella (1993) 13 Cal.App.4th 1414, 1421-1422 [demurrer properly sustained without leave to amend where letters related to contract made it clear that Coachella’s redevelopment agency rather than the City of Coachella was the party to the contract]; F.D.I.C. v. Frankel (N.D. Cal. Nov. 29, 2011) No. 11–CV–03279–LHK, 2011 WL 5975262, *5 [“In general, under California law, an agent acting on behalf of a disclosed principal cannot be held personally liable on the contract. … [B]ecause Plaintiff unequivocally alleges that Furman was acting solely as Appraisal Choice’s employee or agent in entering and executing the alleged contract with Hilltop to make an Appraisal, … Plaintiff cannot plead a valid breach of contract claim against Furman without contradicting the allegations of its original Complaint. Accordingly, Plaintiff’s breach of contract claim against Furman is dismissed without leave to amend.”].)

Given that HHI’s liability under the second and third causes of action depends upon its status as a party to the contract at issue in the first cause of action (see FAC, ¶¶ 20 [covenant implied into the offer letter], 25 [seeking a declaration of the parties’ rights under the offer letter]), its demurrer to these claims is also SUSTAINED without leave to amend. (See Molecular Analytical Systems v. Ciphergen Biosystems, Inc. (2010) 186 Cal.App.4th 696, 711-712 [existence of a contractual relationship between the parties is a prerequisite to an action for breach of the implied covenant of good faith and fair dealing]; Pacific States Enterprises, Inc. v. City of Coachella, supra, 13 Cal.App.4th at p. 1426 [“Inasmuch as the City demonstrably was not a party to the alleged oral contract which formed the underlying basis for the ‘contract related’ causes of action …, the City’s demurrer as to those causes of action was properly sustained without leave to amend.”].)

The Court will prepare the order.