Case Name:   Gautam Musinipally v. The San Jose Inn Partnership, et al.

Case No.:       1-13-CV-256394

 

Defendants Bhupen Magan and Saroj B. Magan (the “Individual Defendants”) demur to the entire First Amended Complaint (the “FAC”) of Plaintiff Gautam Musinipally (“Plaintiff”) and each cause of action asserted therein; defendant The San Jose Inn Partnership, dba Super 8 (“SJ Inn”) (collectively with the Individual Defendants, “Defendants”) demurs to the fifth, sixth, thirteenth, and fourteenth causes of action of the FAC; and SJ Inn moves to strike portions of the FAC.

 

Plaintiff alleges that he was subjected to a number of illegal working conditions while employed by aDefendants.  (See FAC, ¶¶ 1-4, 12-40.)  Plaintiff alleges that he was ultimately suspended from his job on January 9, 2014 in retaliation for filing this lawsuit.  (FAC, ¶ 41.)

 

On February 14, 2014, Plaintiff filed the FAC, asserting the following causes of action against all Defendants: (1) unlawful failure to pay required minimum wage; (2) unlawful failure to pay required overtime; (3) unlawful failure to provide rest periods; (4) unlawful failure to provide adequate meal periods; (5) penalties for violation of Labor Code sections 204 and 210; (6) unlawful failure to furnish accurate wage statements; (7) unfair competition; (8) failure to provide employee records; (9) retaliation; (10) violation of Wage Order 5-2001 for excess charge for lodging; (11) intentional infliction of emotional distress; (12) negligent infliction of emotional distress; (13) wrongful suspension in violation of public policy; (14) California Private Attorney General Act; (15) breach of oral contract; and (16) fraud.

 

The Individual Defendants’ Demurrer

 

The Individual Defendants demur to the entire FAC and each cause of action asserted therein on the grounds of uncertainty (Code Civ. Proc., § 430.10, subd. (f)), failure to state a claim (Code Civ. Proc., § 430.10, subd. (e)), and failure to join an indispensable party (Code Civ. Proc., § 430.10, subd. (d)).  They contend that their demurrer should be sustained on the first two grounds because the FAC alleges that SJ Inn, not the Individual Defendants, was Plaintiff’s employer, and argue that if an action against the individual partners in SJ Inn is appropriate, all of the partners must be joined.

 

As an initial matter, uncertainty is a disfavored ground for demurrer and is typically sustained only where the pleading is so unintelligible that the responding party cannot reasonably respond.  (See Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616 [“A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.”].)  Here, the FAC clearly alleges that the Individual Defendants employed Plaintiff in their capacities as partners in SJ Inn (FAC, ¶ 7), and the Individual Defendants are well able to respond to that allegation as evidenced by their demurrer.

 

With respect to the Individual Defendants’ remaining grounds for demurrer, “all partners are liable jointly and severally for all obligations of the partnership unless otherwise agreed by the claimant or provided by law.”  (Corp. Code, § 16306, subd. (a).)  Accordingly, “[a] member of the partnership or other unincorporated association may be joined as a party in an action against the unincorporated association.”  (Code Civ. Proc., § 369.5, subd. (b), italics added; see also Corp. Code, § 16307, subd. (b) [“an action may be brought against the partnership and any or all of the partners in the same action or in separate actions,” italics added].)  As demonstrated by its permissive language, Code of Civil Procedure section 369.5 provides “for permissive joinder of partners in a suit against the partnership” (In re Hoover WSCR Associates Ltd. (Bkrtcy. C.D. Cal. 2001) 268 B.R. 227), but not for mandatory joinder.  In light of these principles, the Individual Defendants may be joined in an action against the partnership, but every partner need not be joined for the action to proceed.  (See Blew v. Horner (1986) 187 Cal.App.3d 1380, 1393 [“the liability of partners for torts is joint and several and … an action may be brought against one partner without joining the others”]; see also Williams v. Reed (1957) 48 Cal.2d 57, 65 [noting that joint and several obligors may be sued separately].)  The authorities cited by the Individual Defendants for the proposition that joinder is mandatory construed provisions of the Civil Code that have since been repealed and provided that partners were jointly, rather than jointly and severally, liable for the obligation at issue.  (See Berringer v. Krueger (1924) 69 Cal.App. 711, 713 [“[i]n this state the common-law rule that the liabilities of a partnership are joint, or not joint and several, has been expressly adopted into our code,” citing Civ. Code, § 2442]; Kadota Fig Ass’n of Producers v. Case-Swayne Co. (1946) 73 Cal.App.2d 796, 801-802 [“[a]ll partners are jointly and severally liable for everything chargeable to the partnership, and the partners are jointly liable for all other debts and obligations,” citing Civ. Code, § 2409].)

 

The Individual Defendants’ demurrer is accordingly OVERRULED.

 

SJ Inn’s Demurrer

 

SJ Inn demurs to the fifth, sixth, and fourteenth causes of action on the grounds that the Court lacks subject matter jurisdiction over these claims (Code Civ. Proc., § 430.10, subd. (a)) and they fail to state causes of action (Code Civ. Proc., § 430.10, subd. (e)) because Plaintiff did not plead compliance with pre-filing notice and exhaustion requirements.

 

The fifth cause of action seeks penalties for Defendants’ failure to timely pay Plaintiff’s wages pursuant to Labor Code section 204.  The sixth cause of action seeks relief under Labor Code section 226 for Defendants’ failure to provide Plaintiff with an itemized statement of hours worked.  The fourteenth cause of action seeks additional penalties as provided by the California Private Attorney General Act (“PAGA”), Labor Code section 2698, et seq., for Defendants’ violations of Labor Code sections 226, subdivision (a), 226.7, 1194, 1197, 1197.1, and 1198, as well as Industrial Welfare Commission (“IWC”) Wage Order No. 16-2001.

 

Prior to bringing a PAGA claim or any claim for “civil penalties” under these provisions of the Labor Code, an employee must exhaust certain administrative remedies provided by Labor Code section 2699.3.  (See Labor Code, § 2699.5 [the provisions of subdivision (a) of section 2699.3 apply to any alleged violation of sections 204, 226, 226.7, 1194, 1197, 1197.1, and 1198]; see also Bright v. 99cents Only Stores (2010) 189 Cal.App.4th 1472, 1481 [PAGA penalties available for violations of IWC Wage Orders that violate Labor Code section 1198].)  “Civil penalties” are those that were enforceable only by the State’s labor law enforcement agencies prior to the adoption of PAGA, and exclude statutory penalties that were available to employees prior to that time.  (See Caliber Bodyworks, Inc. v. Super. Ct. (Herrera) (2005) 134 Cal.App.4th 365, 377.)

 

Plaintiff does not contest that these claims are subject to the requirements of section 2699.3 and allows that the FAC does not currently allege compliance therewith, but asserts that he can amend it to do so.  (See Caliber Bodyworks, Inc. v. Super. Ct., supra, 134 Cal.App.4th at 383, n.18, 385, n.19 [granting in part petition for writ of mandate directing trial court to sustain demurrer to claims for civil penalties where plaintiffs did not plead compliance with section 2699.3, but noting that plaintiffs were not precluded from seeking leave to amend their complaint to seek penalties after satisfying the requirements of that section].)  However, only the fourteenth cause of action, which is expressly a PAGA claim, and the fifth cause of action, which seeks only “civil penalties” (see Caliber Bodyworks, Inc. v. Super. Ct., supra, 134 Cal.App.4th at p. 379 [claim alleging violations of section 204 and seeking civil penalties as provided in section 210 subject to exhaustion requirements]), are subject to demurrer.  The sixth cause of action, which also seeks statutory penalties as provided in Labor Code section 226, subdivision (e) and injunctive relief, is not subject to demurrer.  (See Dunlap v. Super. Ct. (Bank of America, N.A.) (2006) 142 Cal.App.4th 330, 341 [section 226, subdivision (e) provides for a statutory penalty that was available prior to the adoption of PAGA]; Caliber Bodyworks, Inc. v. Super. Ct., supra, 134 Cal.App.4th at p. 384 [demurrer is not an appropriate vehicle to challenge a claim seeking both civil penalties and other remedies].)  The sixth cause of action is appropriately addressed below in the context of SJ Inn’s motion to strike.

 

SJ Inn’s demurrer to the fifth and fourteenth causes of action is thus SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND on the ground that these causes of action fail to state a claim.  The demurrer to the sixth cause of action is OVERRULED.

 

SJ Inn demurs to the thirteenth cause of action for wrongful suspension in violation of public policy on the ground that it fails to state a claim because an earlier allegation in the FAC establishes that Plaintiff’s suspension was not related to any actions he took that are protected by a fundamental public policy.  (See Turner v. Anheuser-Busch, Inc. (1994) 7 Cal.4th 1238, 1258 [wrongful discharge claim failed where no nexus between reporting of alleged statutory violations and adverse treatment by employer was established].)  It contends that Plaintiff’s allegation that he was terminated “for no reason or rhyme” (FAC, ¶ 92) is factually inconsistent with his later allegation that he was terminated “due to the pending litigation” (FAC, ¶ 110).  However, as urged by Plaintiff, these allegations are not inconsistent.  Paragraph 92 itself provides context to the “no reason or rhyme” language by stating that Plaintiff “has been threatened to be terminated whenever he complained to [the Individual Defendants] to pay his legal minimum wages.”  (FAC, ¶ 92.)  Reading the FAC as a whole, it is reasonable to infer that that the “no reason or rhyme” language means something akin to “no valid reason,” and SJ Inn’s argument consequently fails.

 

SJ Inn’s demurrer to the thirteenth cause of action is accordingly OVERRULED.

 

SJ Inn’s Motion to Strike

 

SJ Inn moves to strike portions of the first cause of action and the fifth and sixth causes of action in their entireties.  Plaintiff’s opposition, which assertedly addresses both SJ Inn’s demurrer and its motion to strike in one document, does not contain any argument respecting the motion to strike.

 

Plaintiff’s first cause of action is for unlawful failure to pay required minimum wages in violation of Labor Code section 1197.  SJ Inn correctly contends that references to civil penalties in this cause of action must be struck because Plaintiff has failed to plead compliance with Labor Code section 2699.3.  (See Labor Code, §§ 1197, subd. (a) [providing for “civil penalties” of $100 for initial violations and $250 for subsequent violations in addition to wages and liquidated damages recoverable by the employee], 2699.5 [the provisions of subdivision (a) of section 2699.3 apply to alleged violation of section 1197]; see also Brewer v. Premier Golf Properties (2008) 168 Cal.App.4th 1243, 1253 [noting $100 and subsequent $250 fines for underpayment are “civil penalties” as provided in a former version of the statute].)

 

Accordingly, the motion to strike is GRANTED WITH 10 DAYS’ LEAVE TO AMEND as to the language in the first cause of action.  The following language is hereby struck:

 

the entirety of paragraph 45

 

“and penalties” (FAC, ¶ 46 at p. 11, l. 12.)

 

“and civil penalties” (FAC, ¶ 47 at  p. 11, l. 15.)

 

In light of the ruling on SJ Inn’s demurrer, the motion to strike the fifth cause of action is MOOT.

 

In addition to demurring to the sixth cause of action, SJ Inn moves to strike it on the basis that it seeks civil penalties and Plaintiff has failed to exhaust his remedies under PAGA.  As discussed above, the sixth cause of action seeks remedies not subject to the requirements of PAGA, so it would be inappropriate to strike the entire cause of action.  However, the Court will strike paragraph 77, which seeks only “civil penalties” pursuant to Labor Code section 226.3.  (See Caliber Bodyworks, Inc. v. Super. Ct., supra, 134 Cal.App.4th at p. 384 [directing trial court to strike only those portions of claims seeking civil penalties where claims also sought other relief]; see also Brewer v. Premier Golf Properties (2008) 168 Cal.App.4th 1243, 1253, n.8 [contrasting civil penalties provided by section 226.3 with “other statutory penalties available for wage stub violations,” italics original].)

 

Accordingly, the motion to strike is GRANTED IN PART AND DENIED IN PART as to the sixth cause of action.  The entirety of paragraph 77 is hereby STRUCK WITH 10 DAYS’ LEAVE TO AMEND.  The motion to strike the sixth cause of action is otherwise DENIED.