Case Name: Seyed Javadi v. West Valley Precision, Inc., et al.
Case No.: 2018-CV-327068

Demurrer and Motion to Strike to the Complaint by Defendants by Defendants West Valley Precision, Inc., Kevin Krueger, and Dane Madsen

Factual and Procedural Background

This is a wrongful termination case. On November 8, 2017, defendant West Valley Precision, Inc. (“WVP”) hired plaintiff Seyed Javadi (“Plaintiff”) as its Quality Manager. (Complaint at ¶ 8.) WVP agreed to pay Plaintiff an annual compensation of $160,000 along with bonuses tied to growth and benefits. (Id. at ¶¶ 8-9.) Plaintiff commenced his employment on November 9, 2017. (Id. at ¶ 11.)

During his employment, Plaintiff protested and opposed unsafe and unhealthy working conditions, which he advocated to be eliminated. (Complaint at ¶ 11.) These conditions included but were not limited to the following:

• Plumes of non-ventilated gas and smoke within the factory part of the machine shop, improper ventilation, broken fans, use of machines beyond their intended limit, and metal nano-particles in the air. Several employees wore gas masks as the air quality was so bad.
• A deafeningly loud noise level.
• Use of a “dry cutting” method of cutting metal, which is inferior, unsafe and not suitable to cut heavy duty machinery. This produces unsafe amounts of particulate matter and heat, and could cause flying shards of metal to injure workers.
• Lack of proper safety equipment.

(Ibid.)

When Plaintiff questioned these unsafe practices, he was told by management that there was no choice. (Complaint at ¶ 12.) Thereafter, Plaintiff was terminated from his employment for protesting unsafe and unhealthy working conditions and protesting defendants’ violations of wage and hour laws. (Id. at ¶¶ 19, 22, 23.)

On April 24, 2018, Plaintiff filed the operative Complaint against defendants alleging causes of action for: (1) wrongful termination in violation of public policy; (2) retaliation in violation Labor Code § 1102.5; (3) retaliation in violation of Labor Code § 6310; (4) unpaid wages; (5) accrual of waiting time penalties pursuant to Labor Code § 203; (6) fraud; (7) negligent misrepresentation; and (8) defamation.

Currently before the Court is the demurrer and motion to strike to the Complaint by defendants WVP, Kevin Krueger (“Krueger”), and Dane Madsen (“Madsen”) (collectively, “Defendants”). Defendants filed a request for judicial notice in conjunction with the motions. Plaintiff filed written oppositions. Defendants filed reply papers.

Demurrer to the Complaint

Defendants demur to each cause of action on the following grounds: (1) uncertainty; (2) failure to allege whether the contract is written, oral, or implied by conduct; and (3) failure to state a valid claim. (Code Civ. Proc., § 430.10, subds. (e), (f), (g).)

Untimely Demurrer

As a preliminary matter, Plaintiff argues the Court should overrule the demurrer because it is untimely. A party may file a demurrer within 30 days of service of the complaint. (Code Civ. Proc., § 430.40, subd. (a).) Plaintiff served Defendants with the Summons and Complaint via substitute service on May 18, 2018. (Tanimura Declaration at ¶ 3.) Defendants did not file and serve their demurrer until July 27, 2018, well beyond thirty days from service of the Complaint. The demurrer is therefore untimely. Even so, the Court has discretion to consider an untimely demurrer and resolution of motions on the merits are favored. (McAllister v. County of Monterey (2007) 147 Cal.App.4th 253, 280-82; see also Jackson v. Doe (2011) 192 Cal.App.4th 742, 750; see also Slusher v. Durrer (1977) 69 Cal.App.3d 747, 753.) Accordingly, the Court will exercise its discretion to consider the merits of the demurrer.

Request for Judicial Notice

In support of the motions, Defendants request judicial notice of the alleged employment contract between Plaintiff and WVP. The purported contract includes an offer of employment, an estimate earnings summary, and a checklist of employment warnings and requirements. (See Defendants’ Request for Judicial Notice.) As the opposition points out, none of these items are proper subjects of judicial notice under the Evidence Code. Instead, such documentation constitutes extrinsic evidence beyond the scope of demurrer and motion to strike. (See Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374 [“The hearing on demurrer may not be turned into a contested evidentiary hearing through the guise of having the court take judicial notice of documents whose truthfulness or proper interpretation are disputable.”].)

Accordingly, the request for judicial notice is DENIED.

Supplemental Request for Judicial Notice

In reply, Defendants filed a supplemental request for judicial notice of certain documents produced by Plaintiff during discovery. Such documents include the following: (1) job offer and signed acceptance with hourly rate terms, probation period of 90 days, at will status, etc.; (2) attendance summary showing hourly rate payments in full as agreed; (3) email confirming end of employment and saying that Plaintiff “understood and graciously existed the building”; (4) Plaintiff’s first application to EDD for unemployment compensation; and (5) Plaintiff’s second application to EDD for unemployment compensation. However, there is no statutory basis for the Court to take judicial notice of these documents. Simply because documents have been obtained as a result of the discovery process does not render them judicially noticeable.

Consequently, the supplemental request for judicial notice is DENIED.

Legal Standard

“In reviewing the sufficiency of a complaint against a general demurer, we are guided by long settled rules. ‘We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. We also consider matters which may be judicially noticed.’” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “A demurrer tests only the legal sufficiency of the pleading. It admits the truth of all material factual allegations in the complaint; the question of plaintiff’s ability to prove these allegations, or the possible difficulty in making such proof does not concern the reviewing court.” (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213–214.)

“The reviewing court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded. The court does not, however, assume the truth of contentions, deductions or conclusions of law. … [I]t is error for a trial court to sustain a demurrer when the plaintiff has stated a cause of action under any possible legal theory. And it is an abuse of discretion to sustain a demurrer without leave to amend if the plaintiff shows there is a reasonable possibility any defect identified by the defendant can be cured by amendment.” (Gregory v. Albertson’s, Inc. (2002) 104 Cal.App.4th 845, 850.)

Demurrer to the Entire Complaint

Defendants demur to the entire Complaint on the following grounds: (1) each cause of action is legally deficient because they are based on the argument that a salary of $160,000 per year was owed, which is contradicted by the contract that Plaintiff signed; (2) Plaintiff fails to allege facts showing that he complained or reported anything to his employer; (3) the Complaint fails to allege whether the contract is oral, written, or implied by conduct; and (4) the Complaint is uncertain.

Allegations Contradicted by Plaintiff’s Contract

Defendants argue each cause of action is legally deficient as Plaintiff was paid a total salary of $116,480, not $160,000 as alleged in the Complaint. In support, Defendants rely on the contract terms attached to their request for judicial notice, which they claim contradict the allegations of the Complaint. However, as stated above, the Court declined to take judicial notice of the contract and thus cannot consider the contract terms on this demurrer. The Court is therefore bound by the allegations of the Complaint which must be accepted as true on demurrer. (See Olson v. Toy (1996) 46 Cal.App.4th 818, 823 [for purposes of demurrer, we accept these allegations as true].) In any case, the argument is underdeveloped as Defendants do not explain how the amount of Plaintiff’s salary renders each cause of action defective. If anything, Defendants are simply claiming the allegation with respect to Plaintiff’s salary is false which would be the subject of a motion to strike, not demurrer. (See Code Civ. Proc., § 436 [motion to strike used to strike any irrelevant, false, or improper matter inserted in a pleading].) Accordingly, this argument is not sustainable on demurrer.

Complaining and Reporting to Employer

Defendants also argue that Plaintiff fails to allege details of any complaining or reporting to his employer about conditions. This argument too is underdeveloped as it is not directed at any specific cause of action or supported by legal authority. (See Quantum Cooking Concepts, Inc. v. LV Associates, Inc. (2011) 197 Cal.App.4th 927, 934 [trial court not required to “comb the record and the law for factual and legal support that a party has failed to identify or provide”]; see also Chavez v. Netflix, Inc. (2008) 162 Cal.App.4th 43, 52 [where appellant’s motion was supported by deficient memorandum, trial court was justified in denying the motion on procedural grounds].) Furthermore, to the extent this argument is addressed to the entire pleading, Plaintiff alleges facts showing that he complained or reported unsafe conditions and his wage dispute to his employer. (See Complaint at ¶¶ 12-13, 16-19.) This argument therefore is not sustainable on demurrer.

Failure to Allege Contract was Oral, Written, or Implied by Conduct

Defendants next argue the Complaint is defective as it is based on a breach of contract but fails to allege whether the contract is written, oral, or implied by conduct. (See Code Civ. Proc., § 430.10, subd. (g) [“In an action founded upon a contract, it cannot be ascertained from the pleading whether the contract is written, oral, or is implied by conduct.”].) This argument is unavailing as this is not a breach of contract case, but instead an employment action based on tort claims for wrongful termination, retaliation, unpaid wages, fraud, and defamation. Accordingly, this argument is not sustainable on demurrer.

Uncertainty

Finally, Defendants argue the Complaint is uncertain as Plaintiff fails to allege what the contract is based upon. This argument lacks merit since, as stated above, this is not a breach of contract case but an employment action based on various tort claims. Furthermore, uncertainty is a disfavored ground for demurrer; it is typically sustained only where the pleading is so unintelligible and uncertain that the responding party cannot reasonably respond to or recognize the claims alleged against it. (See Khoury v. Maly’s of Cal., Inc. (1993) 14 Cal.App.4th 612, 616.) Here, Plaintiff has sufficiently alleged his claims to overcome a demurrer for uncertainty. This argument therefore is not sustainable on demurrer.

Disposition

Based on the foregoing, the demurrer to the entire Complaint is OVERRULED.

Sixth and Seventh Causes of Action: Fraud/Negligent Misrepresentation

The sixth and seventh causes of action are claims for fraud and negligent misrepresentation. “The elements of fraud are (1) the defendant made a false representation as to a past or existing material fact; (2) the defendant knew the representation was false at the time it was made; (3) in making the representation, the defendant intended to deceive the plaintiff; (4) the plaintiff justifiably relied on the representation; and (5) the plaintiff suffered resulting damages.” (West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 792 (West) [citation omitted].)

Similarly, “[t]he elements of negligent misrepresentation are (1) the misrepresentation of a past or existing material fact, (2) without reasonable ground for believing it to be true, (3) with intent to induce another’s reliance on the fact misrepresented, (4) justifiable reliance on the misrepresentation, and (5) resulting damage.” (Apollo Capital Fund, LLC v. Roth Capital Partners, LLC (2007) 158 Cal.App.4th 226, 243.)

“Fraud must be pleaded with specificity rather than with general and conclusory allegations. The specificity requirement means a plaintiff must allege facts showing how, when, where, to whom, and by what means the representations were made, and, in the case of a corporate defendant, the plaintiff must allege the names of the persons who made the representations, their authority to speak on behalf of the corporation, to whom they spoke, what they said or wrote, and when the representation was made.” (West, supra, 214 Cal.App.4th at p. 793 [citation and quotation marks omitted].)

Courts enforce the specificity requirement in consideration of its two purposes. (West, supra, 214 Cal.App.4th at p. 793.) The first purpose is to give notice to the defendant with sufficiently definite charges that the defendant can meet them. (Ibid.) The second is to permit a court to weed out meritless fraud claims on the basis of the pleadings; thus, the pleading should be sufficient to enable the court to determine whether, on the facts pleaded, there is any foundation, prima facie at least, for the charge of fraud. (Ibid.) Negligent misrepresentation claims must also be pled with specificity. (See Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1166 [“Causes of action for intentional and negligent misrepresentation sound in fraud and, therefore, each element must be pleaded with specificity.”].)

Defendants argue Plaintiff has not alleged fraud or negligent misrepresentation with the required specificity to state a cause of action. Defendants however do not explain or substantiate this argument except to assert that, based on the written contract, there can be no misrepresentation in support of these claims. As stated above, the Court has declined to take judicial notice of the written contract and therefore the Court is bound by the pleaded facts alleged in the Complaint. Here, Plaintiff alleges WVP, through its agents Krueger and Madsen, made false representations to him regarding his compensation for the purpose of inducing him to decline other employment. (Complaint at ¶¶ 53, 54, 55, 63, 64, 65.) Plaintiff reasonably and justifiably relied on these false representations to his detriment resulting in damages to be proved at the time of trial. (Id. at ¶¶ 56-60, 66-70.) Such allegations are sufficient to state claims for fraud and negligent misrepresentation to overcome demurrer.

Accordingly, the demurrer to the sixth and seventh causes of action on the ground they fail to state a claim is OVERRULED.

Eighth Cause of Action: Defamation

The eighth cause of action is a claim for defamation. “The elements of a defamation claim are (1) a publication that is (2) false, (3) defamatory, (4) unprivileged, and (5) has a natural tendency to injure or causes special damage.” (Wong v. Jing (2010) 189 Cal.App.4th 1354, 1369.)

Defendants argue Plaintiff fails to allege sufficient facts to state a claim for defamation. Defendants contend in part that defamation is subject to the same specificity requirements as a fraud claim. This contention however is not supported by any legal authority in the moving papers. In any case, Plaintiff alleges that, in December 2017, defendants Krueger and Madsen published statements impugning Plaintiff’s honesty, ethics, integrity, work performance, and adherence to professional obligations, including, but not limited to, that Plaintiff was terminated from his position with WVP for malfeasance. (Complaint at ¶ 72.) Plaintiff further alleges such statements were false and constitute slander per se as they accuse Plaintiff of malfeasance and incompetence in the performance of his job duties. (Id. at ¶¶ 73-75.) In addition, Plaintiff alleges such statements were heard by present and former employees and customers of WVP and ultimately caused him to suffer damages. (Id. at ¶ 77-78.) Such allegations are sufficiently pled to state a claim for defamation and overcome general demurrer.

Finally, Defendants argue Plaintiff worked for WVP and that things simply did not work out. (See Memo of P’s & A’s at p. 8.) Defendants claim that people at WVP had no reason to communicate anything to anyone about Plaintiff’s employment. These however are factual arguments which cannot be resolved on demurrer. (See Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 375 [disputed factual issues cannot be resolved on demurrer].)

Consequently, the demurrer to the eighth cause of action on the ground that it fails to state a claim is OVERRULED.

Liability of Individual Defendants

Defendants argue there is no basis to hold defendants Krueger and Madsen individually liable for their conduct in the Complaint. According to the Complaint, Krueger is a management level employee of WVP and Madsen is an officer, director, and/or management level employee of WVP. (Complaint at ¶¶ 3-4.) Defendants however do not substantiate this argument with any citation to legal authority. Regardless, at a minimum, Plaintiff can hold defendants Krueger and Madsen individually liable for a claim of defamation. (See Sheppard v. Freeman (1998) 67 Cal.App.4th 339.)

Accordingly, the demurrer to the Complaint on the ground that Plaintiff cannot hold defendants Krueger and Madsen individually liable is OVERRULED.

Motion to Strike

Defendants move to strike Plaintiff’s request for punitive damages and attorney’s fees alleged in the Complaint as they constitute false, irrelevant, or improper matter. (Code Civ. Proc., §§ 435-436.)

Legal Standard

A court may strike out any irrelevant, false, or improper matter asserted in a pleading. (Code Civ. Proc., § 436, subd. (a).) A court may also strike out all or any part of a pleading not filed in conformity with the laws of the State of California. (Code Civ. Proc., § 436, subd. (b).) The grounds for a motion to strike shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice. (Code Civ. Proc., § 437, subd. (a).)

Punitive Damages Allegations

Defendants move to strike the punitive damages allegations set forth at paragraphs 26, 32, 40, and 61 and the Prayer for Relief at nos. 3, 6, 14, and 18.

“In order to state a prima facie claim for punitive damages, a complaint must set forth the elements as stated in the general punitive damage statute, Civil Code section 3294. These statutory elements include allegations that the defendant has been guilty of oppression, fraud, or malice. ‘Malice’ is defined in the statute as conduct ‘intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.’ ‘Oppression’ means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights. ‘Fraud’ is ‘an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.’” (Turman v. Turning Point of Central California, Inc. (2010) 191 Cal.App.4th 53, 63 [internal citations omitted].)

“In determining whether a complaint states facts sufficient to sustain punitive damages, the challenged allegations must be read in context with the other facts alleged in the complaint. Further, even though certain language pleads ultimate facts or conclusions of law, such language when read in context with the facts alleged as to defendants’ conduct may adequately plead the evil motive requisite to recovery of punitive damages.” (See Monge v. Super. Ct. (1986) 176 Cal.App.3d 503, 510.)

Defendants argue there is no basis for punitive damages as the Complaint arises from a breach of contract. This argument lacks merit for reasons stated above on the Court’s ruling on demurrer. Specifically, that this is not a breach of contract case but an employment action based on various tort claims. To the extent that the Complaint alleges claims for retaliation and fraud, Defendants argue such claims have not been properly pled. This argument is not well-taken as the Court overruled Defendants’ demurrer in its entirety as to each cause of action. Furthermore, a well-pleaded fraud claim, like the one in this action, is sufficient to establish a legal basis for punitive damages. (See Stevens v. Super. Ct. (1986) 180 Cal.App.3d 605, 610 [a fraud cause seeking punitive damages need not include an allegation that the fraud was motivated by the malicious desire to inflict injury upon the victim; the pleading of fraud is sufficient].)

Therefore, the motion to strike punitive damages allegations is DENIED.

Request for Attorney’s Fees

Defendants move to strike Plaintiff’s request for attorney’s fees set forth in paragraphs 34, 42, and 48 and the Prayer for Relief at nos. 8, 10, and 20. The general rule of Code of Civil Procedure section 1021 is “that each party is to bear his or her own attorney fees unless a statute or the agreement of the parties provide otherwise.” (Gray v. Don Miller & Associates, Inc. (1984) 35 Cal.3d 498, 504.)
Defendants argue there is no basis for attorney’s fees under the employment contract or by statute. According to the Complaint, Plaintiff does not request attorney’s fees under any contract but instead under Code of Civil Procedure section 1021.5 and Labor Code section 218.5. Defendants fail to substantiate their argument or explain why attorney’s fees are not permissible under these statutes. In fact, both statutes provide a proper basis to award attorney’s fees. For example, under Code of Civil Procedure section 1021.5, a court may award attorney’s fees to a successful party against one or more opposing parties in any action which has resulted in the enforcement of an important right affecting the public interest. In addition, Labor Code section 218.5 requires the awarding of attorney’s fees to the prevailing party “[i]n any action brought for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions.” Plaintiff therefore provides a legal basis to support his request for attorney’s fees.

Accordingly, the motion to strike the request for attorney’s fees is DENIED.