2014-00173292-CU-WT

Melanie Huang vs. North Valley Fleet Services, Inc.

Nature of Proceeding: Motion for Summary Adjudication

Filed By: Stuckey, Brad

*** If oral argument is requested, the parties are directed to notify the clerk and opposing counsel at the time of the request which of the Issues identified in the Notice of Motion and which of the Undisputed Material Facts offered by the moving defendant and/or the Additional Material Facts offered by plaintiff will be addressed at the hearing and the parties should be prepared to point to specific evidence which is claimed to show the existence or non-existence of a triable issue of material fact. ***

Defendants North Valley Fleet Services, Inc. (“NVFS”) and Chan Gi’s (“Gi”) (collectively “Defendants”) motion for summary adjudication is ruled upon as follows.

1. Overview

This is an employment action. Plaintiff Melanie Huang alleges that she was employed with NVFS working in various capacities managing the company from January 2005 until March 4, 2014. She met Steven Hayashida (“Hayashida”) in February 2004. Hayashida asked Plaintiff to quit her job, and marry him, but they agreed to wait to marry until the business was stronger. Plaintiff began working for NVFS. Plaintiff alleges that Hayashida expected and forcibly demanded sex from Plaintiff in the workplace as quid pro quo. Hayashida also represented to Plaintiff that she was the half-owner of the company, even if her name was not technically on the business. He

told Plaintiff that if he were ever to die, then she would own the business. Hayashida died on May 25, 2013.

William Austin Cooper (“Cooper”) was an attorney that Hayashida and Plaintiff had previously met with. Plaintiff took Hayashida’s unexecuted will to Cooper, who explained he would assist and represent her. In August 2013, Cooper showed Plaintiff a marriage license Hayashida had taken with GI in 1997. Unbeknownst to Plaintiff, Cooper filed papers identifying Gi as a potential heir of Hayashida’s estate. Plaintiff alleges that Gi has been taking coordinated steps to oust her from the business.

On February 28, 2014, Plaintiff was fired. However, Cooper insisted that she sign release papers saying she was quitting. Plaintiff explained that she was not quitting and intended to show up at work. Plaintiff arrived at work on March 4, 2014, but the locks had been changed and she was locked out.

Plaintiff attempted to file a late Creditor’s Claim and challenge Gi’s designation as the putative spouse and heir to Hayashida’s Estate, but was unsuccessful.

Trial was originally scheduled for April 17, 2018, but has been vacated.

Defendants move for summary adjudication of the following cause of action: (1) Wrongful Termination in Violation of Public Policy, (2) Sexual Harassment Cal. Civil Code §§51.9 and 52, (3) Fraud, (4) Intentional Misrepresentation, (5) Negligent Misrepresentation, (6) Conversion, and (7) Intentional Interference with Prospective Economic Advantage.

Defendants’ and Plaintiff’s requests for judicial notice are granted. In taking judicial notice of these documents, the court accepts the fact of their existence, not the truth of their contents. (See Professional Engineers v. Dep’t of Transp. (1997) 15 Cal.4th 543, 590 [judicial notice of findings of fact does not mean that those findings of fact are true]; Steed v. Department of Consumer Affairs (2012) 204 Cal.App.4th 112, 120-121.)

2. Wrongful Termination in Violation of Public Policy

Defendants move for summary adjudication of this cause of action on the ground that “the facts show that the alleged discharge could not have been substantially motivated by a violation of public policy.”

Plaintiff bases this cause of action on violations of FEHA sexual harassment and violation of Civ. Code §§ 51.9 and 52. Defendants contend that there is no causal nexus between the sexual harassment and her termination because there is no evidence that the sexual harassment was a substantial motivating factor for her termination.

Defendants proffer the following undisputed facts. Plaintiff claims that she and

Hayashida were the only two people who had knowledge of Hayashida’s alleged sexual
harassment against her. (UMF 3.) Plaintiff claims that Cooper and Gi were the only people who participated in the decision to terminate Plaintiff from NVFS. (UMF 7.) Plaintiff claims that Cooper and Gi were the only people who provided information relied upon in the decision to terminate Plaintiff from NVFS. (UMF 8.) Gi had no knowledge about the alleged sexual harassment of Plaintiff by Hayashida until this lawsuit. (UMF 9.) Cooper had no knowledge about the alleged sexual harassment of Plaintiff by Hayashida until this lawsuit. (UMF 10.) Defendants have satisfied their initial burden to demonstrate that no triable issue of material fact exists.

Plaintiff fails to satisfy their burden to demonstrate a triable issue of material fact. Although Plaintiff attempts to create a triable issue, Plaintiff does not substantively dispute Defendants’ material facts. For example, Plaintiff claims that Defendants improperly rely on her responses to Form Interrogatory No. 207.2 to support UMF 3 because she served supplemental responses to the interrogatory. Her supplemental response, however, continue to identify only Hayashida as the only other person who knew of the sexual harassment. Moreover, although Plaintiff claims that Jonathan Cruz (“Cruz”) was “present” at the office during the first incident of sexual harassment, there is no evidence that Cruz knew of the sexual harassment. With respect to UMFs 7 and 8, Plaintiff tries to distance herself from her response to Form Interrogatory No. 201.1(b) by claiming that her “response was based upon information and belief Plaintiff was not privy to who or how many people participated in the decision to

terminate.” (Plaintiff’s response to UMFs 7-8.) Again, this does not create a material dispute. Lastly, Plaintiff “disputes” UMFs 9-10 because Gi’s and Cruz’s deposition have not been completed/taken. (Plaintiff’s response to UMFs 9-10.) Plaintiff, however, did not request a continuance as required by CCP §437c(h). Nor has Plaintiff satisfied the CCP §437c(h) requirements which requires a declaration establishing not only that there likely exists evidence which would support an opposition to the present motion but also that such discovery could not have reasonably been completed prior to the opposition’s due date.

The motion for summary adjudication is GRANTED.

3. Sexual Harassment Cal. Civil Code §§51.9 and 52

Plaintiff alleges that NVFS and its principal/agent Hayashida subjected her to unlawful sexual harassment. She alleges that “[a]t the time the unlawful conduct was perpetrated, the relationship between, on the one hand, and NVFS on the other hand, was one of Employer and Employee and or a substantially similar relationship.” (Complaint, ¶ 102.)

Defendants move for summary adjudication of this cause of action on the ground that “the Civil Codes on which the claim is based do not apply to the employer-employee context.”

Civ. Code §51.9 provides:

(a) A person is liable in a cause of action for sexual harassment under this section when the plaintiff proves all of the following elements: (1) There is a business, service, or professional relationship between the plaintiff and defendant. Such a relationship may exist between a plaintiff and a person, including, but not limited to, any of the following persons:

(A) Physician, psychotherapist, or dentist. For purposes of this section, “psychotherapist” has the same meaning as set forth in paragraph (1) of subdivision (c) of Section 728 of the Business and Professions Code.

(B) Attorney, holder of a master’s degree in social work, real estate agent, real estate appraiser, accountant, banker, trust officer, financial planner loan officer, collection service, building contractor, or escrow loan officer.

(C) Executor, trustee, or administrator.

(D) Landlord or property manager.

(E) Teacher.

(F) A relationship that is substantially similar to any of the above.

Civ. Code §52 lists the damages and relief available for violation of Civ. Code §51.9.

The Court agrees with Defendants. Civ. Code §51.9 was drafted to address sexual harassment that occurs in professional relationships outside the employment context, such as doctor-patient, etc. (See Hughes v. Pair (2009) 46 Cal.4th 1035, 1044 [Civ. Code §51.9 covers sexual harassment in certain business relationships outside the workplace.].) The remedy for an employee who is subject to sexual harassment is found in the Fair Employment and Housing Act. To the extent Plaintiff, in opposition, attempts to take her complaint outside the employment context by arguing that she and Hayashida were “business partners and had a business relationship” (Opposition, 14:9-10), this theory is outside the scope of her complaint. In evaluating a motion for summary adjudication, the Court first identifies the issues framed by the pleadings, as they define the scope of the issues in a motion for summary judgment or summary adjudication. (FPI Dev. Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 381-382.) “The [papers] filed in response to a defendant’s motion for summary judgment may not create issues outside the pleadings and are not a substitute for an amendment to the pleadings.” (Nativi v. Deutsche Bank National Trust Co. (2014) 223

Cal.App.4th 261, 290.)

The motion for summary adjudication is GRANTED.

4. Fraud (promise made without intention to perform), Intentional Misrepresentation, Negligent Misrepresentation

Defendants move for summary adjudication of these causes of action on the ground that “they are time-barred and the representations were Hayashida’s personal promises.” The applicable statute of limitations is three years. (CCP §338(d).) Plaintiff filed her complaint on December 24, 2014. Thus, any claims for fraudulent conduct prior to December 24, 2011 are barred by the three years statute of limitations.

Plaintiff alleges the following misrepresentations were made to her: (1) she would be a 50% owner of NVFS, and (2) she would receive and run NVFS upon his death so that she would be taken care of the remainder of her lifetime. She alleges that at the time he made these misrepresentations, Hayashida was acting in his capacity as the sole

shareholder and member of the corporation.

a. 50% Ownership

Defendants insist that given the eight years Plaintiff worked at NVFS with Hayashida, and Hayashida’s “evasive behavior” regarding her present and future ownership

interest in NVFS (UMFs 19-35), any reasonable person in Plaintiff’s position would have suspected fraud early on.

In opposition, Plaintiff claims that the causes of action are subject to the delayed discovery rule, which is a question of fact. The Court concludes that Plaintiff fails to satisfy her burden to show that the discovery rule applies.

First, Plaintiff’s complaint fails to specifically plead facts showing: (1) the time and manner of discovery, and (2) the inability to have made earlier discovery despite

reasonable diligence. (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 808 see April Enterprises, Inc. v. KTTV (1983) 147 Cal.App.3d 805, 832 [“plaintiff must plead facts sufficient to convince the trial judge that delayed discovery was justified”].) In evaluating a motion for summary adjudication, the Court first identifies the issues framed by the pleadings, as they define the scope of the issues in a motion for summary

judgment or summary adjudication. (FPI Dev. Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 381-382.) “The [papers] filed in response to a defendant’s motion for summary judgment may not create issues outside the pleadings and are not a substitute for an amendment to the pleadings.” (Nativi v. Deutsche Bank National Trust Co. (2014) 223

Cal.App.4th 261, 290.) Plaintiff’s complaint merely states “[a]t the time this promise was made and at the time HUANG took the actions herein alleged, she was ignorant of DEFENDANT NVFS’s secret intention not to perform and HUANG could not, in the exercise of reasonable diligence, have discovered the secret intention of DEFENDANT NVFS.” (Complaint, ¶ 116.) These allegations are deficient.

Second, even if Plaintiff alleged delayed discovery in her complaint, she fails to proffer evidence showing her inability to have made earlier discovery despite reasonable diligence. A potential plaintiff who suspects that an injury has been wrongfully caused must conduct a reasonable investigation of all potential causes of that injury. If such an investigation would have disclosed a factual basis for a cause of action, the statute of limitations begins to run on that cause of action when the investigation would have brought such information to light. In order to adequately allege facts supporting a theory of delayed discovery, the plaintiff must plead that, despite diligent investigation of the circumstances of the injury, he or she could not have reasonably discovered facts supporting the cause of action within the applicable statute of limitations period.” (Fox, 35 Cal.4th at 807-809.)

Plaintiff blames Cooper and Gi for their misrepresentations and deceit after Hayashida’s death, however, the fraud and misrepresentation causes of action are not directed towards Cooper or Gi. Only NVFS is identified as the named defendant to these causes of action. Indeed, the case cited by Plaintiff, Snow v. A. H. Robins Co. (1985) 165 Cal.App.3d 120, shows that the delayed discovery rule may apply when the named defendant makes false representations or conceals facts which hinder the plaintiff from bringing the action. Plaintiff additionally asserts that “once Hayashida

concealed and/or misled Huang regarding the cause of the injury, Huang was excused from further investigation and the statute of limitations is tolled.” (Opposition, 17:12-14.) The Court is not convinced by Plaintiff’s argument because neither Hayashida nor his estate is named as a defendant in the action.

b. Full Ownership Upon Hayashida’s Death

Defendants move for summary adjudication on the ground that NVFS made no false promise or misrepresentation because the shares belonged personally to Hayashida.

Thus, “any promise by Hayashida to bequeath a personal asset, like his shares in NVFS, was a representation that only Hayashida, not NVFS could make.” (Motion, 18:15-17.)

Plaintiff contends that Hayashida made these promises “in his official capacity as the 100% corporate shareholder and officer of the NVFS.” (Opposition, 16:7-9.) To support this fact, Plaintiff cites to her response to Special Interrogatory No. 35, which states, in part “Hayashida told Plaintiff repeatedly in his position as an Officer, Director

and Owner of NVFS . . . that she would be supported by the business for the remainder of her life.” (AMF 18.)

The Court concludes that Plaintiff fails to demonstrate a triable issue. Plaintiff’s reliance on her own conclusory discovery response does not assist her. Her response
fails to provide any facts supporting her statement that Hayashida made the representations as an “Officer, Director and Owner of NVFS”, rather than in his personal capacity. Additionally, Plaintiff proffers no analysis as to how, even if, the statements were made in his capacity as Officer, Director and Owner of NVFS, that the NVFS should be liable for such statements. Indeed, NVFS having already issued the

shares to Hayashida, could not have promised Hayashida’s shares to Plaintiff.

The motion for summary adjudication is GRANTED.

Conversion

In the conversion cause of action against NVFS, Plaintiff alleges that prior to Hayashida’s death, NVFS leased a Mercedes ML 350 and gave it to her as a gift for her birthday. She alleges that Hayashida, in his capacity as the President of NVFS told her that he bought the car for her because “he loved her and [she] deserved

it.” (Complaint, ¶ 150.) Plaintiff alleges that NVFS demanded that she return the car, which she did. (Complaint, ¶ 153.)

Defendants move for summary adjudication of this cause of action on the ground that “Plaintiff cannot establish that NVFS converted Plaintiff’s property by a wrongful action or disposition.”

The elements for a claim of conversion are (1) plaintiff’s ownership or right to possession of property, (2) defendant’s wrongful act toward or disposition of the properly, interfering with the plaintiff’s possession, and (3) damage to the plaintiff. (See PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro LLP (2007) 150 Cal. App. 4th 384, 395.)

It is undisputed that NVFS and Hayashida leased the Mercedes in 2013. (UMF 40.) NVFS, Hayashida and Daimler Trst Lsr are named as the registered owner. (Id.) On March 5, 2014, the Estate of Hayashida, by and through it counsel, sent a letter to Plaintiff’s counsel requesting the return of the Mercedes. (UMF 41.) Plaintiff returned the Mercedes on March 6, 2014. (UMF 42.)

In opposition, Plaintiff insists that Hayashida gifted the Mercedes to her for her birthday, that she “understood” the Mercedes was her personal property, and that Hayashida agreed that the lease would be “bought out” so that she could own the Mercedes outright. (Opposition, 18:20-24.)

The Court concludes that Plaintiff fails to show a triable issue of material fact. Only NVFS and Hayashida are the named lessees. NVFS, Hayashida and Daimler Trst Lsr are named as the registered owner. There is no showing that Plaintiff owned or had a right to possession of the Mercedes. There is also no evidence that the lease was bought out enabling Hayashida to give the Mercedes to Plaintiff. Lastly, Hayashida’s estate, and not NVFS, requested the return, and Plaintiff returned the Mercedes to the estate’s counsel.

The motion for summary adjudication is GRANTED.

Intentional Interference with Prospective Economic Advantage

Plaintiff alleges that “[b]y virtue of their relationship with HUANG through and attendant to the business of NVFS and COOPER’S representative relationship with HUANG, COOPER and GI knew or reasonably should have known that HUANG built the business with HAYASHIDA, relied on the business for her personal income and had an agreement with NVFS through HAYASHIDA, the principal of NVFS, that she would receive the business in the event of HAYASHIDA’s death.” (Complaint, 171.) She alleges that “GI made false statements and representations to third parties and to the Probate Court, and plac[ed] herself on the payroll at a rate of $12,000 in order to obtain ownership and control of NVFS and to deny HUANG’s financial prospects for the future ownership of the conipany(ies).” (Complaint, ¶ 174.)

Defendants move for summary adjudication of this cause of action on the ground that “Gi was not aware of any economic relationship between Plaintiff and NVFS and her statements to the Probate Court are protected by the litigation privilege.”

Plaintiff does not appear to dispute that Gi had no personal knowledge/awareness of Plaintiff’s economic relationship with NVFS. Instead, Plaintiff contends that Cooper’s knowledge should be imputed on Gi because he was “the corporate counsel for NVFS, the business consultant for NVFS and directly counseled Gi in those
capacities.” (Opposition, 19:1-3.) Plaintiff, however, fails to cite any legal authority that Cooper’s knowledge may be imputed on Gi in these circumstances.

The motion for summary adjudication is GRANTED.

The Court declines to rule on Plaintiff’s objections to evidence included in her response to separate statement as Plaintiff fails to comply with CRC Rule 3.1354.