Case Name: Denise Reilly v. Morgan Hill Unified School District, et al.
Case No.: 16CV303125

I. Factual Background

This action arises from a dispute over defendant Morgan Hill Unified School District’s (“Defendant”) purported failure to pay plaintiff Denise Reilly (“Plaintiff”) longevity pay. As alleged in the Third Amended Complaint (“TAC”), Plaintiff began working for Defendant in 1977. (TAC, ¶ 7.) Under the terms of a continuing agreement between the Morgan Hill Educational Leaders Association (“MHELA”) and Defendant, Plaintiff was entitled to longevity pay. (Id. at ¶ 9.)

In 2006, Plaintiff made an irrevocable election to maintain her “Extended Longevity Bonus Pay” in the amount of $12,000 instead of accepting standard longevity pay and increased health benefits. (Id. at ¶ 11.) This election was memorialized by a signed agreement between the parties. (Ibid.)

Several years later, Defendant discontinued Plaintiff’s longevity pay without her permission in breach of their agreements. (Id. at ¶¶ 10-11.) Plaintiff believed this violated the Labor Code and Education Code, and apprised Defendant of the same. (Id. at ¶¶ 13-15.) Her belief was shared by another of Defendant’s employees, Barbara Neal (“Neal”), the secretary for MHELA, who was later instructed not to discuss the issue with her. (Id. at ¶¶ 16-17.)

Subsequently, Defendant advised Plaintiff that her longevity pay agreement would not be honored unless she elected to take a pay cut. (Id. at ¶ 18.) Plaintiff continued to inquire about her longevity pay and, for a brief period, began receiving it again. (Id. at ¶ 19.) Shortly thereafter, Defendant suspended Plaintiff for an alleged overpayment of wages related to the longevity pay and placed her on paid administrative leave. (Id. at ¶ 20.) It also threatened her with criminal prosecution when she refused to surrender her longevity pay. (Id. at ¶ 21.) During a meeting between the parties, Defendant threatened to call the police in an attempt to further intimidate Plaintiff. (Id. at ¶ 22.) These efforts to scare Plaintiff furthered her belief Defendant knew its failure to pay her longevity pay violated the law. (Id. at ¶ 23.) The District Attorney declined to prosecute her, which was further proof of Defendant’s bad faith. (Id. at ¶ 21.) Defendant eventually terminated Plaintiff and illegally excluded longevity pay from her final pay. (Id. at ¶ 25.)

The TAC asserts causes of action against Defendant for breach of contract and retaliatory action in violation of Labor Code section 1102.5 (“Section 1102.5”).

Currently before the Court are Defendant’s demurrer to the second cause of action and motion to strike. Defendant filed a request for judicial notice in support.

II. Request for Judicial Notice

Defendant requests judicial notice of the TAC and this Court’s order sustaining its demurrer to the second amended complaint. Under Evidence Code section 452, subdivision (d), court records are generally proper subjects of judicial notice. With respect to the order, it is relevant to resolving issues raised in the motion to strike. (See People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422, fn. 2 [a precondition to taking judicial notice is that the matter to be noticed is relevant to an issue in the case].) As for the TAC, however, judicial notice is unnecessary because it is the pleading under review and, as such, must be considered by the Court. (See Paul v. Patton (2015) 235 Cal.App.4th 1088, 1091, fn. 1.) Therefore, the Court will take judicial notice of the order but not the TAC.

Defendant also seeks judicial notice of California Rules of Court, rule 3.1320(b). Under Evidence Code section 451, subdivision (c), judicial notice of a rule of court is mandatory. (See, e.g., Sosinsky v. Grant (1992) 6 Cal.App.4th 1548, 1562.)

Accordingly, Defendant’s request for judicial notice is GRANTED as to the Court’s order and California Rules of Court, rule 3.1320(b), and DENIED as to the TAC.

III. Demurrer and Motion to Strike

Defendant demurs to the second cause of action for violation of Section 1102.5. It also moves to strike the TAC in its entirety or, in the alternative, a portion thereof.

Ordinarily, the Court would address a demurrer before evaluating a motion to strike. Here, however, if the Court strikes the entire TAC on any of the grounds raised by Defendant, this would render the demurrer moot. The Court will therefore first address the motion to strike the TAC in its entirety.

A. Motion to Strike Entire TAC

Defendant moves to strike the entire TAC pursuant to Code of Civil Procedure section 436 (“Section 436”), which authorizes a court to strike out any irrelevant, false, or improper matter inserted into any pleading or any pleading not drawn or filed in conformity with an order of the court. It advances two arguments in support.

First, Defendant argues the TAC was untimely because it was not filed within 10 days of service of the order sustaining the demurrer to the second amended complaint (“SAC”). For context, this order granted Plaintiff 10 days’ leave to amend and was served on April 6, 2016. (See RJN, Exh. 1, p. 6, 7.) Defendant asserts Plaintiff was accordingly required to file the TAC no later than April 16, 2018. Because the TAC was filed on April 20, 2018, it concludes the pleading was untimely. This argument is not well-taken.

It is not apparent to the Court in the first instance that the TAC was filed late. Under Code of Civil Procedure 472b, when “a demurrer to any pleading is sustained…and time to amend…is given, the time so given runs from the service of notice of the decision or order.” (Code Civ. Proc., § 472b, emphasis added.) Because the time to amend in that instance is triggered by the service of the notice of order, Code of Civil Procedure section 1013 (“Section 1013”) is implicated. (See Citicorp N. Am., Inc. v. Superior Court (1989) 213 Cal.App.3d 563; Sw. Airlines v. Workers’ Comp. Appeals Bd. (1991) 234 Cal.App.3d 1421, 1426.) That statute provides that any prescribed time period to act or respond is extended when service of a notice occurs through means other than personal service. When notice is served by mail, this period is extended by five calendar days. (Code Civ. Proc., § 1013, subd. (a).)

Here, the Court’s order was served by mail on April 6, 2018. (See RJN, Exh. 1, p. 7.) As such, under Section 1013, the 10-day period within which Plaintiff was required to amend was extended by five calendar days. Thus, Plaintiff was not required to file her TAC until April 21, 2018. Because she filed her pleading on April 20, 2018, it was timely.

Even it was untimely, there is no authority requiring the Court to strike an entire pleading under these circumstances. Section 436 provides that any decision to strike an entire pleading is within the discretion of the court. (Code Civ. Proc., § 436; CLD Constr., Inc. v. City of San Ramon (2004) 120 Cal.App.4th 1141, 1145.) By Defendant’s computation, the TAC was only filed a few days late and Defendant suffered no apparent prejudice as a result. Given these facts, the Court finds that striking the entire pleading is not warranted.

Second, Defendant moves to strike the entire TAC on the basis it is frivolous. It argues the recent amendments made to the pleading do not cure the deficiencies in the SAC. This is not a proper ground for moving to strike an entire pleading or even a cause of action. In essence, Defendant is arguing Plaintiff’s TAC and, more specifically, the second cause of action is inadequately pled. Such arguments must be raised in a demurrer and not a motion to strike. (See Quiroz v. Seventh Ave. Ctr. (2006) 140 Cal.App.4th 1256, 1281 [where a whole cause of action is subject to a challenge, the proper procedural vehicle is a demurrer and not a motion to strike]; see also CLD Constr., Inc., supra, 120 Cal.App.4th at 1146 [motion to strike is not the appropriate vehicle for raising defects properly raised by demurrer].) Defendant cites no authority supporting the position a motion to strike can be granted on the basis a claim is insufficiently pled. As such, its argument is unsubstantiated.

Thus, the motion to strike the TAC in its entirety is DENIED.

The Court will therefore address the merits of Defendant’s demurrer followed by its motion to strike a portion of the pleading.

B. Demurrer

Defendant demurs to the second cause of action for violation of Section 1102.5 on the ground of failure to state facts sufficient to constitute a cause of action. (See Code Civ. Proc., § 430.10, subd. (e).)

Under Section 1102.5, otherwise known as California’s whistleblowing statute, an employer may not “retaliate against an employee for disclosing information…to a person with authority over the employee or another employee who has the authority to investigate, discover, or correct the violation or noncompliance” if the employee has reasonable cause to believe there is a state or federal statute, rule or regulation that is being violated. (Lab. Code., § 1102.5, subdivision (b).)

Plaintiff’s claim is predicated on Defendant’s termination of her employment after she reported its failure to pay longevity pay to various employees including her immediate supervisor. Previously, Defendant successfully demurred to this claim on the basis Plaintiff did not identify the specific statute, rule or regulation she believed was being violated. In her TAC, Plaintiff attempts to cure the deficiency by alleging she believed Defendant violated Labor Code sections 200, 201, 202, 203, 204, and 218.5, and Education Code sections 42644 and 42646. (TAC, ¶¶ 14-15.)

Defendant does not argue the TAC fails to cure the defect discussed in this Court’s prior ruling. Instead, given the specific statutes now identified, it contends Plaintiff’s belief these statutes were violated was not reasonable. Specifically, it asserts the Labor Code sections cited do not apply to school districts and the factual allegations in the TAC do not support a reasonable belief any of the referenced statutes were violated. This contention is well-taken.

It is not enough for a plaintiff to allege the reasonableness of his or her belief a statute, rule or regulation was being violated; a plaintiff must allege facts demonstrating his or her belief was reasonable. (Ferrick v. Santa Clara Univ. (2014) 231 Cal.App.4th 1337, 1345-53; see also Edgerly v. City of Oakland (2012) 211 Cal.App.4th 1191, 1202.) Where the misconduct alleged does not amount to a violation of the statutes or regulations referenced, a plaintiff’s belief a violation occurred is not reasonable. (Ibid.)

With respect to the Labor Code sections referenced – namely, sections 200, 201, 202, 203, 204, and 218.5 – the belief these statutes were violated is not reasonable because, as Defendant correctly points out, these provisions do not apply to school districts. Section 220 provides in relevant part that Labor Code sections 200 to 211 and 215 to 219 “do not apply to the payment of wages of employees directly employed by any county, incorporated city, or town or other municipal corporation.” (Lab. Code, § 220, subd. (b).) For purposes of this statute, school districts are “other municipal corporation[s].” (Gateway Cmty. Charters v. Spiess (2017) 9 Cal.App.5th 499, 507; Kistler v. Redwoods Cmty. Coll. Dist. (1993) 15 Cal.App.4th 1326, 1337.) Because the statutes cited by Plaintiff do not apply to Defendant in the first instance, there are no facts that could support the reasonableness of her belief these laws were violated. Thus, Plaintiff does not allege facts supporting the reasonableness of her belief these Labor Code sections were violated.

As for Education Code sections 42644 and 42646, these provisions govern the payroll schedules and procedures for school district employees. For example, section 42644 addresses the frequency with which the wages of school district employees should be drawn. (Educ. Code, § 42644.) Plaintiff alleges she believed these statutes were violated but pleads no facts relating to deficiencies in the payroll schedules or procedures employed by Defendant. Rather, the only misconduct alleged in the TAC is that Defendant failed to pay her longevity pay – a fact bearing no apparent relation to the payroll issues governed by these statutes. There are, therefore, no facts supporting the reasonableness of Plaintiff’s belief these laws were violated.

In opposition, Plaintiff states at the outset that demurrers for uncertainty are disfavored and will only be sustained where the complaint is so ambiguous and unintelligible that the defendant cannot reasonably respond. This contention is anomalous as Defendant’s demurrer is not based on the ground of uncertainty; at no point does Defendant argue the pleading is so ambiguous it cannot respond.

Next, Plaintiff argues she need not allege an actual violation of the law, only a reasonable belief in one. This contention misses the point of Defendant’s argument, which is predicated on the fact Plaintiff’s belief was not reasonable. Plaintiff also contends the issue of the reasonableness of her belief “can only be left to the finder of fact and cannot be determined as a matter of law.” (Opp. at p. 4:2-3.) She does not, however, cite any authority in support. As such, her argument is unsubstantiated. (See People v. Dougherty (1982) 138 Cal.App.3d 278, 282 [a point asserted without citation to authority may be disregarded].)

In sum, Defendant’s demurrer to the second cause of action is sustainable. The only question remaining is whether leave to amend should be granted. When sustaining a demurrer, a court may deny leave to amend if the plaintiff does not demonstrate any reasonable possibility of curing the defect in the pleading through amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.) Here, Plaintiff does not articulate how she could amend the pleading to state a viable claim if given another opportunity to do so.

Accordingly, Defendant’s demurrer to the second cause of action on the ground of failure to state sufficient facts is SUSTAINED WITHOUT LEAVE TO AMEND.

C. Motion to Strike Prayer for Attorney’s Fees and Costs

Defendant moves to strike Plaintiff’s prayer for attorney’s fees and costs relative to the first cause of action on the basis the TAC alleges no contractual or statutory basis for such fees. Plaintiff “concedes that there is no appropriate contract, statute, or rule on which attorney fees can be successfully requested for Plaintiff’s 1st cause of action.” (Opp. at p. 3:16-17.)

As such, the unopposed motion to strike the prayer for attorney’s fees and costs relative to the first cause of action is GRANTED WITHOUT LEAVE TO AMEND.