Case Name: Ronald Verdugo v. Cushman & Wakefield, et al.

Case No.: 18CV331234

Defendant Facebook, Inc.’s General Demurrer to Complaint

Factual and Procedural Background

David Nikoley (“Nikoley”), Senior Vice President of defendant Cassidy Turley, L.P. d/b/a DTZ (“Cassidy” or “DTZ”), approached plaintiff Ronald Verdugo (“Verdugo”) to work on a large scale project involving a data center for defendant Facebook, Inc. (“Facebook”) in the state of Texas. (Complaint, ¶4.) Plaintiff Verdugo received an initial offer letter on April 6, 2015 and was hired by defendant Cassidy/ DTZ for the full time position of Vice President, Project & Development Services. (Id.)

Plaintiff Verdugo began working from his home in San Jose and attending meetings with defendant Cassidy/ DTZ and defendant Facebook representatives. (Complaint, ¶5.) Almost immediately after he began working, plaintiff Verdugo’s superior and others began making age-based comments to plaintiff Verdugo who was 63 years old at the time. (Id.) On June 22, 2015, plaintiff Verdugo met the DTZ Managing Director for the first time. The DTZ Managing Director seemed shocked and surprised at plaintiff Verdugo’s age. (Id.)

On June 29, 2015, plaintiff Verdugo attended a meeting at DTZ where the DTZ Managing Director commented that the team should not act or appear “crusty” and should, instead, be more “hipster.” (Id.) Another team member at the meeting stated the team should not act “like 50 year olds.” (Id.) When plaintiff Verdugo complained, the team member responded, “okay let’s not act like 60 year olds,” which brought laughter from many young team members. (Id.) The Managing Director did not discourage such comments or apologize for them and instead stated that sometimes they had the “wrong” person for a project and the team would re-assign the project to the “right” person. (Id.) The Managing Director mentioned the company needed to recruit two “senior” people for two other clients. (Id.)

On June 30, 2015, the Facebook Director of the data center project plaintiff Verdugo was hired to oversee sent an email to the Facebook project manager stating he and plaintiff Verdugo’s superior at DTZ agreed to release plaintiff Verdugo from the Facebook project. (Complaint, ¶6.) A copy of the email was sent to plaintiff Verdugo’s supervisor at DTZ. (Id.)

On July 8, 2015, plaintiff’s DTZ superiors advised plaintiff Verdugo that his employment was being terminated and that Facebook did not want him on the project any longer. (Complaint, ¶7.) Plaintiff inquired about the other two positions mentioned at the June 29, 2015 meeting but was told one of the positions would be filled by a Junior Project Manager and there were no other opportunities available. (Id.) The Junior Project Manager who filled one of the other positions turned out to be much younger and less experienced than plaintiff. (Id.)

When plaintiff inquired about unemployment benefits, DTZ’s human resources department told plaintiff that his termination was “client driven and not based on anything else.” (Complaint, ¶8.) However, a document in plaintiff’s personnel file indicated plaintiff had been terminated for “unsatisfactory performance.” (Id.) An email between plaintiff’s superiors at DTZ indicated plaintiff was being terminated and that they needed documentation for the file in writing from Facebook asking that plaintiff be removed from the project. (Id.)

On July 9, 2018, plaintiff Verdugo filed a complaint against defendants Cushman & Wakefield (“Cushman”), DTZ, Cassidy, and Facebook asserting causes of action for:

(1) Unruh Civil Rights Act (Civil Code Section 51) Violation [versus Facebook]
(2) Civil Code Section 52.1 Violation [versus Facebook]
(3) Fraudulent Interference with Contractual Relations [versus Facebook]
(4) Intentional Misrepresentation [versus Cushman, DTZ, and Cassidy]
(5) Negligent Misrepresentation [versus Cushman, DTZ, and Cassidy]
(6) Concealment [versus Cushman, DTZ, and Cassidy]
(7) False Promise [versus Cushman, DTZ, and Cassidy]
(8) Labor Code Section 709 [versus Cushman, DTZ, and Cassidy]

On January 3, 2019, defendants Cushman, DTZ, and Cassidy jointly filed an answer to plaintiff Verdugo’s complaint.

On June 14, 2019, defendant Facebook filed the motion now before the court, a demurrer to the first through third causes of action of plaintiff Verdugo’s complaint.

Discussion

IV. Defendant Facebook’s demurrer to plaintiff Verdugo’s complaint is SUSTAINED, in part, and OVERRULED, in part.

A defendant may raise a general demurrer based on statute of limitations grounds. “Where the dates alleged in the complaint show the action is barred by the statute of limitations, a general demurrer lies.” (Weil & Brown, et al., CAL. PRAC. GUIDE: CIV. PRO. BEFORE TRIAL (The Rutter Group 2019) ¶7:50, p. 7(I)-31 citing Saliter v. Pierce Bros. Mortuaries (1978) 81 Cal.App.3d 292, 300, et al.) However, “[t]he running of the statute must appear ‘clearly and affirmatively’ from the dates alleged. It is not sufficient that the complaint might be barred. If the dates establishing the running of the statute of limitations do not clearly appear in the complaint, there is no ground for general demurrer. The proper remedy ‘is to ascertain the factual basis of the contention through discovery and, if necessary, file a motion for summary judgment.’” (Roman v. County of Los Angeles (2000) 85 Cal.App.4th 316, 324 – 325; internal citations omitted.)

A. Unruh Civil Rights Act Violation.

It is defendant Facebook’s contention on demurrer that plaintiff Verdugo’s first cause of action for Unruh Civil Rights Act Violation is subject to a two year statute of limitations and that the cause of action accrued on June 30, 2015, the date plaintiff Verdugo alleges defendants Facebook and DTZ agreed to release plaintiff from the project. (See Complaint, ¶6.) Since plaintiff Verdugo did not file this action until more than three years later on July 9, 2018, defendant Facebook contends the cause of action is barred.

Civil Code section 51, subdivision (b) states, “All persons within the jurisdiction of this state are free and equal, and no matter what their sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, sexual orientation, citizenship, primary language, or immigration status are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever.”

“Whoever denies, aids or incites a denial, or makes any discrimination or distinction contrary to Section 51, 51.5, or 51.6, is liable for each and every offense for the actual damages, and any amount that may be determined by a jury, or a court sitting without a jury, up to a maximum of three times the amount of actual damage but in no case less than four thousand dollars ($4,000), and any attorney’s fees that may be determined by the court in addition thereto, suffered by any person denied the rights provided in Section 51, 51.5, or 51.6.” (Civ. Code, § 52, subd. (a).)

In support of its demurrer, defendant Facebook cites West Shield Investigations and Sec. Consultants v. Superior Court (2000) 82 Cal.App.4th 935, 953 (West Shield) where the court wrote:

Thus, because the Act, as set forth at Civil Code section 51 et seq., constitutes a refinement and codification of existing common law liability for violation of civil rights, the applicable statute of limitations for claims under the Act is section 340, subdivision (3), the one-year limitations period for personal injury actions, rather than the section 338, subdivision (a), the three-year limitations period for liability created upon a statute.

West Shield was decided under the former one-year statute of limitations for personal injury actions, now a two-year statute of limitations. (See Code Civ. Proc., § 335.1)

In opposition, plaintiff Verdugo cites Gatto v. County of Sonoma (2002) 98 Cal.App.4th 744 (Gatto) which agreed with the West Shield court’s reasoning, but went on to find the analysis to be incomplete.

The [West Shield] court’s reasoning deserves to be set forth at length: “Our analysis begins with a review of common law, because ‘ “[a] cause of action is based upon a liability created by statute” ’ only where the liability is embodied in a statutory provision and was of a type which did not exist at common law.” (Briano v. Rubio (1996) 46 Cal.App.4th 1167, 1177, 54 Cal.Rptr.2d 408….) Thus, where a cause of action is based upon a statute which did not ‘create a new form of liability … but merely codified and refined existing law,’ the section 338 three-year limitations period for actions based upon statutory liability does not apply. (Briano v. Rubio, supra, 46 Cal.App.4th at p. 1179, 54 Cal.Rptr.2d 408.)

“Accordingly, resolution of this issue depends upon whether the Act created a new form of liability, or whether liability for violation of civil rights is derived from common law.

…

We believe West Shield was correctly decided but that the court’s analysis is incomplete and misleading. West Shield is unquestionably correct that section 51, subdivision (b), codifies “existing common law liability for violation of civil rights.” (Ibid.) However, West Shield’s analysis proceeds on the assumption that all Unruh Civil Rights Act claims are subject to the same statute of limitations. This assumption fails to attend to the complexity of the Unruh Civil Rights Act and the variety of claims that may be adjudicated under its rubric, some of which derive from the common law and some of which do not.

(Gatto, supra, 98 Cal.App.4th at pp. 755–757.)

Without citation to any authority, plaintiff Verdugo argues his claim is based on age discrimination which does not evolve from common law and so a three year statute of limitations should apply. The court rejects plaintiff Verdugo’s recharacterization of his first cause of action which is explicitly premised upon Civil Code section 51, subdivision (b) and seeks the remedy provided by Civil Code section 52. (See Complaint, ¶¶11 and 13.) Just as in Gatto, plaintiff Verdugo’s first cause of action “clearly derives from common law principles and is for that reason subject to the one-year statute.” (Gatto, supra, 98 Cal.App.4th at p. 760. See also p. 759—“The present case, of course, presents only the question of the proper statute of limitations for claims under section 51, subdivision (b)….”)

Accordingly, defendant Facebook’s demurrer to the first cause of action on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., § 430.10, subd. (e)], i.e., barred by the applicable statute of limitations, is SUSTAINED with 10 days’ leave to amend. The court need not reach defendant Facebook’s secondary argument that the Unruh Civil Rights Act does not apply in the employment context.

B. Bane Act Violation.

The Bane Act permits an individual to pursue a civil action for damages where another person “interferes by threat, intimidation, or coercion, or attempts to interfere by threat, intimidation, or coercion, with the exercise or enjoyment by any individual or individuals of rights secured by the Constitution or laws of the United States, or of the rights secured by the Constitution or laws of this state.” (Civ. Code, § 52.1, subd. (a).) “The essence of a Bane Act claim is that the defendant, by the specified improper means (i.e., ‘threat[ ], intimidation or coercion’), tried to or did prevent the plaintiff from doing something he or she had the right to do under the law or to force the plaintiff to do something that he or she was not required to do under the law.” (Austin B., supra, 149 Cal.App.4th at p. 883, 57 Cal.Rptr.3d 454.)

(King v. State of California (2015) 242 Cal.App.4th 265, 294; see also CACI, No. 3066.)

Similar to the first cause of action, defendant Facebook also demurs to plaintiff Verdugo’s second cause of action for a Bane Act violation on the ground that it is barred by a two year statute of limitations.

In opposition, plaintiff again cites to Gatto asserting that the Gatto “court concluded that Civil Code section 52.1 claims that did not evolve from the common law are subject to a three year statute of limitations.” Gatto did not reach this conclusion. On the contrary, the Gatto court held, “The second [claim pursuant to Civil Code section 52.1] is analogous to a federal claim for personal injury under 42 U.S.C. § 1983 which, as the West Shield court correctly observed, sounds in tort (see, Wilson v. Garcia, supra, 471 U.S. at pp. 277–280, 105 S.Ct. 1938), and this claim is therefore also subject to the one-year statute.” (Gatto, supra, 98 Cal.App.4th at p. 760.)

Accordingly, defendant Facebook’s demurrer to the second cause of action on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., § 430.10, subd. (e)], i.e., barred by the applicable statute of limitations, is SUSTAINED with 10 days’ leave to amend. The court need not reach defendant Facebook’s secondary argument that the second cause of action fails because plaintiff does not allege violence or a threat of violence.

C. Intentional Interference with Contractual Relations

The elements which a plaintiff must plead to state the cause of action for intentional interference with contractual relations are (1) a valid contract between plaintiff and a third party; (2) defendant’s knowledge of this contract; (3) defendant’s intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage. (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 55; Tuchscher Development Enterprises, Inc. v. San Diego Unified Port Dist. (2003) 106 Cal.App.4th 1219, 1239; see also CACI, No. 2201.)

In demurring to this third cause of action, defendant Facebook contends the governing statute of limitations is a two year statute of limitations. (See Code Civ. Proc., § 339, subd. 1; Trembath v. Digardi (1974) 43 Cal.App.3d 834, 836.) When the interference claim is based on fraud, as is the case here, plaintiff Verdugo points out case law holding that the three-year statute of limitations applies. (Romano v. Wilbur Ellis & Co. (1947) 82 Cal.App.2d 670 (Romano).) In Romano, the plaintiff entered into a contract with a third party giving the plaintiff an exclusive right to sell fish and fish products to the third party. The defendants falsely represented to the third party that the plaintiff was not fit or qualified to represent the third party, and the defendants could deal more profitably and advantageously with the third party. Based on these representations, the third party terminated its contract with the plaintiff. (Id. at pp. 671–672.) The Romano court concluded the plaintiff had stated a cause of action for interference with contract. (Id. at pp. 672–673.) The court also determined that the cause of action was subject to a three-year statute of limitations because “the gist of this type of action [was] fraud.” (Id. at p. 673.)

Here, plaintiff Verdugo alleges, “Defendant Facebook, Inc. … made fraudulent misrepresentations to plaintiff’s employer that plaintiff was not fit or qualified to perform the Facebook project which caused plaintiff’s employer to remove him from the project and terminate his employment.” (Complaint, ¶19.) Thus, similar to Romano, the interference with contract claim here is based upon false representations regarding plaintiff’s fitness or qualifications. Thus, a three year statute of limitation for fraud based claims applies.

Defendant Facebook also apparently argues the cause of action accrued on June 30, 2015 based upon the allegation that on that date, defendants Facebook and DTZ agreed to release plaintiff from the project. (See Complaint, ¶6.) However, the applicable statute of limitations, Code of Civil Procedure section 338, subdivision (d), explicitly states, “The cause of action in that case is not deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.” While the alleged fraudulent representation may have occurred on June 30, 2015, the cause of action does not accrue until the fraudulent representations or facts constituting fraud are discovered by the plaintiff. Here, there are no clear and affirmative allegations in the complaint with regard to when the fraud accrued.

Accordingly, defendant Facebook’s demurrer to the third cause of action on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., § 430.10, subd. (e)] for fraudulent interference with contractual relations is OVERRULED.