Case Number: VC065653 Hearing Date: August 07, 2018 Dept: SEC

MERIBEAR PRODUCTIONS, INC. v. BAER

CASE NO.: VC065653

HEARING: 08/07/18

JUDGE: LORI ANN FOURNIER

#3

TENTATIVE ORDER

Plaintiff/Cross-Defendants MERIBEAR PRODUCTIONS, INC.’s demurrer to Defendants/Cross-Complainants’ CALEB MORSE, BRETT BAER, and JAMIE BAER’s Fourth Amended Cross-Complaint is OVERRULED. CCP §430.10(e).

Moving Party to give Notice.

This action was filed in June 30, 2016 by Plaintiff/Cross-Defendant MERIBEAR PRODUCTIONS, INC. (“Meribear”). Defendants/Cross-Complainants’ Brett Baer, Jaime Baer, and Caleb Morse (collectively “Cross-Complainants”) are former employees of Plaintiff Meribear Productions, Inc. All parties are in the business of “luxury home staging.” Defendants’ employment relationships ended with Plaintiff in 2016. At some point, the Baer Defendants and Morse formed a separate staging business by the name of City Lights Staging (also a named Defendant in the instant suit.)

Cross-Complainants filed their Fourth Amended Cross-Complaint on May 29, 2018. The 4AXC asserts the following causes of action: (1) Rescission of Settlement Agreement; (2) Wrongful Termination in Violation of Public Policy; (3) Retaliation; (4) Intentional Infliction of Emotional Distress; (5) Failure to Pay Minimum Wages; (6) Failure to Pay Overtime Wages; (7) Failure to Provide Accurate Wage Statements Cal. Lab. Code §226; (8) Waiting Time Penalties Pursuant to Cal. Lab. Code §201 and §203; (9) Failure to Provide Break Periods; (10) Disability Discrimination; (11) Failure to Accommodate; (12) Failure to Engage in the Interactive Process; (13) Sexual Harassment & Discrimination; (14) Stalking; (15) Breach of Contract; (16) Breach of the Implied Covenant of Good Faith and Fair Dealing; (17) Declaratory Relief; (18) Removal of Director; (19) Fraud; (20) Breach of Fiduciary Duty- Individual; (21) Breach of Fiduciary Duty- Derivative; (22) Accounting; and (23) Violation of Business & Professions Code §17200.

Plaintiff/Cross-Defendant MERIBEAR, INC. and Cross-Defendant MERIDITH BAER (“Meribear”) demur to the first, second, third, fourth, fifth, sixth, seventh, eighth, ninth, fourteenth, and twenty-third causes of action as to Cross-Complainant CALEB MORSE.

First Cause of Action – Rescission of Settlement/Severance Agreement (Against CALEB MORSE only)

Meribear demurs on the basis that the relevant terms of the Severance Agreement bars Cross-Complainant CALEB MORSE’s claim. Specifically, Meribear argues that “there are specific statements agreed to by CALEB in the settlement/severance agreement directly contradicting his allegations in the Fourth Amended Cross-Complaint concerning whether all of his wages were paid. Unfortunately for CALEB, regretting the execution of a severance agreement is not grounds to rescind it.” (Demurrer 8:16-19.) The 4AXC states, in pertinent part: “Specifically, you acknowledge and affirm that you have been fully paid all wages and other compensation owed to you by the Company, including any overtime wages and incentive compensation.” (4AXC ¶120.) “In exchange for the Severance provided for in this Agreement, you agree to waive any and all claims against the Company, its parent, subsidiary and affiliated corporations, and their respective successors….” (Id.)

“A party to a contract may rescind the contract in the following cases: (1) If the consent of the party rescinding…was given by mistake, or obtained through duress, menace, fraud, or undue influence, exercised by or with the connivance of the party as to whom he rescinds, or of any other party to the contract jointly interested with such party.” (Cal. Civ. Code §1689(b)(1).)

The demurrer to the first cause of action is overruled as to Cross-Complainant CALEB MORSE. Although the terms of the Severance Agreement, as alleged, indicate that Cross-Complainant CALEB MORSE was “paid all wages,” Cross-Complainants also allege that “Due to Caleb’s severe anxiety, stress, humiliation, and worry caused by Meridith’s retaliation against him, he did not remember the wages unpaid to him at the time of the Severance Agreement…. [¶] The only reason Caleb signed the Severance Agreement is because Meridith had regularly harassed and retaliated against him, banned him from the MBH office, slandered him heavily to his co-workers, his fiancé, and future family, threatened him that she would disparage him further, and he would not be eligible for unemployment benefits if he didn’t sign the agreement. Due to these circumstances, Caleb was not given any choice by MBH but to sign the Severance Agreement.” (4AXC ¶¶127 and 128.) The facts, as alleged, are sufficient to show that CALEB MORSE would not have signed the Severance Agreement, but for his unilateral mistake. Moreover, the arguments raised by Meribear in the instant demurrer raise factual determinations inappropriately decided at this stage in the litigation.

Second through Ninth, Fourteenth, and Twenty-Third Causes of Action – (Against CALEB MORSE only)

Pursuant to the Court’s findings above, the demurrer to the second through ninth, fourteenth, and twenty-third causes of action is overruled as to Cross-Complainant CALEB MORSE.