CASE#: MSC13-02656
CASE NAME: COZZITORTO VS. AAA
HEARING ON DEMURRER TO 1st Amended COMPLAINT of COZZITORTO FILED
BY AMERICAN AUTOMOBILE
* TENTATIVE RULING: *
Defendant American Automobile Association of Northern California, Nevada & Utah (“AAA”) demurs to the entire First Amended Complaint (“FAC”) on the ground of uncertainty, and to the First, Second, Third and Fourth causes of action of the FAC. For the reasons stated below, the demurrer to the entire complaint is sustained with leave to amend; the demurrer to the first cause of action is sustained with leave to amend; the demurrer to the second cause of action is sustained with leave to amend; the demurrer to the third cause of action is sustained with leave to amend, and the demurrer to the fourth cause of action is sustained without leave to amend. Plaintiffs are granted twenty days leave to amend as to those causes of action for which leave to amend is granted.
In this action, plaintiffs allege that persons who work as AAA emergency service providers, including plaintiffs in this action, are misclassified as independent contractors when they should be classified as AAA employees. As a first cause of action, plaintiffs allege violation of Labor Code Section 2802, requiring that employees be reimbursed for work-related expenses. Plaintiffs further state a second cause of action for violation of the Business and Professions Code Section 17200 et seq., the Unfair Competition Law (“U.C.L.”) due to the alleged Labor Code violations and alleged breaches of the agreement between plaintiffs and AAA. Plaintiffs state a third cause of action for breach of contract, alleging that AAA has breached the terms of the Emergency Road Service Contract Agreement (“the Agreement”) entered into with plaintiffs. Plaintiffs’ fourth cause of action is for breach of the covenant of good faith and fair dealing, also relating to AAA’s actions with respect to compensation provided to plaintiffs under the agreement. Plaintiffs seek to have the case certified as a class action as to all causes of action, and set forth definitions of an “employee misclassification class” and a “breach of contract class.” Although plaintiffs rely in part on their class definitions to argue that they have adequately defined the terms used in the FAC, the court notes that no class has been certified in this case, and that it must therefore determine the adequacy of the complaint and each cause of action as stated on behalf of the named plaintiffs.
AAA’s first ground for demurrer, stated both as to the entire complaint and each of the causes of action, is that the complaint is uncertain because plaintiffs fail to define key terms such as “emergency road service provider” and “contract station” and state all claims on behalf of all plaintiffs, making it difficult or impossible to distinguish between those claims stated on behalf of individual plaintiffs and those stated on behalf of business entity plaintiff Cozz’s Auto Body & Service, Inc. (“Cozz’s”) AAA further argues that Cozz’s lacks standing on the first and second causes of action, and that the individual plaintiffs lack standing on the third and fourth causes of action. AAA argues that the third and fourth causes of action fail because the contract in question is not attached to the complaint, nor are its terms set out verbatim. Finally, AAA argues that all claims in this action are pre-empted by the Federal Aviation Administration Authorization Act (the “FAAA Act”).
The demurrer on the ground of uncertainty is sustained with leave to amend. Although reading the FAC as a whole the nature of the claims is clear, defendant should not have to fill in the blanks as to what plaintiffs mean when they refer to “emergency road service providers” or “contract stations,” nor guess which causes of action are stated on behalf of which plaintiffs. Plaintiffs, in their opposition, concede that their intent is to state their first cause of action on behalf of “persons” only, and not for Cozz’s. Plaintiffs’ Opposition, p. 7, n.2. Similarly, plaintiffs state in their opposition that the breach of contract claims are stated only on behalf of signatories to the Agreement, citing the definition of the Breach of Contract Class. Plaintiffs’ Opposition, p. 9. However, in the FAC, the headings of the actual counts state that “plaintiffs” – i.e., all plaintiffs – bring each of the causes of action. If AAA cannot determine from the FAC which plaintiffs state which causes of action, it cannot determine whether the plaintiffs have standing to bring their claims or how to respond. The demurrer on the ground of uncertainty is therefore sustained with leave to amend.
Because plaintiffs’ opposition concedes that the first cause of action should be stated only by individual plaintiffs and that the third and fourth causes of action should be stated only by Cozz’s, and leave to amend is granted to clarify the FAC accordingly, the court does not reach AAA’s argument on lack of standing as to these causes of action. As to Cozz’s standing to bring the second cause of action for violation of the U.C.L., the court finds that the allegations of the FAC regarding violation of the U.C.L. by systematic violation of the Agreement, and of the injury to Cozz’s from such violation, sufficiently allege an injury in fact to Cozz’s from violation of the U.C.L.
The demurrer to the third and fourth causes of action for failure to attach the Agreement, or to quote its terms verbatim, is overruled. Plaintiffs have sufficiently pled the substance of the terms of the Agreement. See Construction Protective Services Inc. v. TIG Specialty Ins. Co. (2002) 20 Cal. 4th 189, 198-199.
Finally, the court turns to AAA’s argument that plaintiffs’ claims are preempted by the FAAA Act. As to the alleged labor code and UCL violations, the laws at issue do not significantly impact motor carriers, so as to be subject to preemption, but instead only have a “tenuous, remote or peripheral” effect. Morales v. TWA (1992) 504 U.S. 374, 390. Indeed, the Ninth Circuit has held that California’s prevailing wage law is not pre-empted by the FAAA Act, reasoning that these wage protections did not have a direct effect on the prices, routes or services of motor carriers . Californians for Safe & Competitive Dump Truck Transp. v. Mendonca (1998) 152 F. 3d 1184, 1189. The protection provided for employees under Labor Code Section 2802 is closely analogous. American Trucking Ass’ns v. City of Los Angeles (9th Cir 2009) 559 F. 3d. 1046 (“ATA I) and American Trucking Ass’ns v. City of Los Angeles (9th Cir. 2011) 660 F. 3d 384 (“ATA II”) are not on point: regulations requiring a trucking company to use employee drivers as opposed to independent contractors are not the same as laws applicable to all employers, recognizing that under certain conditions someone must be considered an employee rather than an independent contractor, and subject to the protections applicable to an employee. The demurrer to the first and second causes of action on the grounds of FAAA Act preemption is overruled.
As to the fourth cause of action for breach of the implied covenant of good faith and fair dealing, AAA cites authority that such claims are preempted if the application of the implied covenant, a condition imposed by state law, directly affects a matter of pricing. Samica Enters., LLC v. Mail Boxes Etc. USA Inc. (C.D. Cal. 2008) 637 F. Supp. 2d 712, 719-721. Here, as in Samica Enters., plaintiffs assert a cause of action for breach of the implied covenant of good faith and fair dealing as it relates to the prices paid by AAA for the services provided by plaintiffs and other providers of emergency road service. This claim directly relates to pricing, and attempts to impose a standard set under state law; the claim is therefore preempted, and the demurrer to the fourth cause of action on the ground of preemption is sustained without leave to amend.
Evidentiary Rulings:
AAA’s request for judicial notice is granted. Evidence Code Section 452 (h).
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