Case Number: EC062014 Hearing Date: June 06, 2014 Dept: NCD

Defendants’ Demurrer to Plaintiffs’ Complaint

TENTATIVE:
Demurrer is SUSTAINED to the second cause of action for violation of Civil Code § 51.7, as the pleading fails to clearly plead violence or intimidation by threat of violence.

Demurrer is SUSTAINED to the fifth cause of action for Unfair Business Practices on the ground plaintiffs have failed to allege standing to pursue a private claim for unfair business practices, that is, they have failed to allege that they have lost money or property as a result of the alleged unfair practice.

Demurrer is OVERRULED as to all other causes of action and on all other grounds.

Ten days leave to amend.

CAUSES OF ACTION: from Complaint
7) Discrimination in Violation of Cal. Civ. Code § 51
8) Intimidation by Threat of Violence in Violation of Civ. Code § 51.7
9) IIED
10) Negligent Supervision, Hiring and Retention
11) Unfair Business Practices

SUMMARY OF FACTS:
Plaintiffs Daniel Moreira and Rayner Bosch allege that on November 27, 2013, they entered the Crumbs Bake Shop at the Americana at Brand and purchased cupcakes with the intention of sitting inside the Crumbs location to enjoy them. Immediately after they purchased the cupcakes, plaintiffs were approached by defendant Arsenyan and told that they had to sit outside because the Crumbs location was closing. While sitting outside, plaintiffs noticed several other patrons entering the Crumbs location, purchasing cupcakes and sitting inside the Crumbs location. Plaintiff Moreira re-entered the location to speak with defendant Arsenyan and file a formal complaint, and as he was leaving the shop Arsenyan and his friends sitting inside the shop repeatedly called plaintiffs “faggots.” Plaintiffs allege that defendants refused to allow plaintiffs to sit inside the Crumbs location solely on account of plaintiffs’ sexual orientation.

ANALYSIS:
First Cause of Action—Discrimination in Violation of Cal. Civ. Code § 51
Defendants argue that the first cause of action fails because a violation of the Unruh Act requires some discrimination in accommodations or services, and it is clear that plaintiffs were able to purchase cupcakes and enjoy them on the patio. Under the Unruh Act, “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, marital status or sexual orientation are entitled to the full and equal accommodations, advantages, facilities, privileges or services in all business establishments of every kind whatsoever.” Civ. Code section 51. “Whoever denies, aids or incites a denial, or makes any discrimination or distinction” contrary to these rights “is liable for each and every offense for the actual damages,” caused, as well as attorney’s fees and exemplary damages/penalties. Civ. Code section 52.

Here, the pleading clearly alleges that plaintiffs were denied what can be reasonably construed as equal accommodations, advantages, facilities, privileges or services, as they were told to sit outside the facility while other patrons were permitted to sit indoors. [Paras. 16-18]. The demurrer is overruled.

Second Cause of Action—Intimidation by Threat of Violence in Violation of Civ. Code § 51.7
The second cause of action is based on Civil Code section 51.7, which provides: “(a) All persons within the jurisdiction of this state have the right to be free from any violence, or intimidation by threat of violence, committed against their persons or property… on account of any characteristic…” listed in Civil Code section 51, which, as noted above, includes race.

Under Civil Code section 52(b), “whoever denies the right provided by Section 51.7 or 51.9, or aids, incites, or conspires in that denial, is liable for each and every offense…” for actual damages, punitive damages and a civil penalty.

Defendants argue that the pleading fails to allege violence or intimidation by threat of violence. The pleading alleges that plaintiffs “are homosexual males of average build and height. Defendant Arseneyan and his group of friends sitting inside the Crumbs Location, on the other hand, collectively comprised a threateningly-large group of heterosexual males.” [Para. 30]. It is also alleged that plaintiffs were called “faggots” repeatedly, which behavior, “was enough to cause Plaintiffs to fear for their safety and leave the Crumbs Location immediately.” [Para. 31]. This does not appear to constitute any actual violence or intimidation by threat of violence. The demurrer is sustained.

Third Cause of Action—IIED
To state a cause of action for Intentional Infliction of Emotional Distress, plaintiff must plead the following essential elements: Extreme and outrageous conduct with the intention of causing, or reckless disregard of the probability of causing, emotional distress; plaintiff suffered severe or extreme emotional distress; defendant’s outrageous conduct actually and proximately caused emotional distress; the conduct was directed to plaintiff. Christensen v. Superior Court (1991) 54 Cal.3d 868, 903; KOVR-TV, Inc. v. Superior Court (Whittle) (1995) 31 Cal.App.4th 1023.

Defendants argue that the conduct alleged is not sufficiently outrageous. It is held that conduct to be outrageous must be so extreme as to exceed all bounds of that usually tolerated in a civilized community, and be “of a nature which is especially calculated to cause… mental distress.” Christensen, 54 Cal.3d at 903-905.

The conduct here, deliberately discriminating against plaintiffs in violation of their rights, and engaging in public name calling, may be construed as outrageous and calculated to cause emotional distress.

Plaintiffs rely on Alcorn v. Anbro Engineering (1970) 2 Cal.3d 493 in which the Supreme Court noted that in evaluating an IIED claim, the court may consider the relationship of the parties and the susceptibility of plaintiff to emotional distress. In Alcorn, the Supreme Court reversed the trial court’s judgment entered after sustaining a demurrer to a claim for IIED without leave to amend in an employment situation where plaintiff alleged that his superintendent had raged at plaintiff, repeatedly leveling racial slurs and calling him a “nigger,” and fired him for what appeared to be union activity, which conduct was subsequently ratified by other personnel to whom it was reported.

The conduct alleged here appears sufficiently outrageous to defeat demurrer.

Defendants also argue that the pleading fails to allege severe emotional distress. In such a cause of action, the distress must be severe, defined as “emotional distress of such substantial quantity or enduring quality that no reasonable man in a civilized society should be expected to endure it.” Fletcher v. Western National Life Ins. Co. (1970) 10 Cal.App.3d 376, 397. Moreover, to sufficiently state this element, plaintiff must set forth facts indicating the nature and extent of any alleged mental suffering. Bogard v. Employers Casualty Co. (1985, 2nd Dist.) 164 Cal.App.3d 602, 617. Conclusory allegations that plaintiff suffered severe emotional distress, without more, are held insufficient. Id.; See also Pitman v. City of Oakland (1988) 197 Cal.App.3d 1037, 1047.

The pleading here does not simply allege that plaintiffs suffered severe emotional distress, but alleges that they suffered “anxiety, worry, embarrassment, humiliation, mental anguish and/or emotional distress.” [Para. 40]. This is sufficient to survive demurrer and the demurrer to this cause of action is overruled.

Fourth Cause of Action—Negligent Supervision, Hiring and Retention
As conceded by defendants, an employer may be found directly liable for the negligent hiring, training or retention of an unfit employee:
“California case law recognizes the theory that an employer can be liable to a third person for negligently hiring, supervising, or retaining an unfit employee. ( Evan F. v. Hughson United Methodist Church (1992) 8 Cal. App. 4th 828, 836 [10 Cal. Rptr. 2d 748].) Liability is based upon the facts that the employer knew or should have known that hiring the employee created a particular risk or hazard and that particular harm materializes. ( Id. at pp. 836-837.)”
Doe v. Capital Cities (1996, 2nd Dist.) 50 Cal.App.4th 1038, 1054.
Defendants argue that the employer did not know in advance that Arsenyan created a particular risk or hazard from observation of his past conduct. However, the pleading alleges that “Defendants knew or should have known that their employees, including but not limited to defendant Arsenyan, had a history of engaging in unlawful conduct that could cause injury to Plaintiff and others, yet failed to take any action to prevent such injury.” [Para. 44]. This appears to allege advance knowledge, and the demurrer is overruled.

Fifth Cause of Action—Unfair Business Practices
Defendants argues that plaintiffs cannot maintain this cause of action because they have no standing to pursue a private cause of action. Under Business & Professions Code section 17204, which provides:
“Actions for any relief pursuant to this chapter shall be prosecuted exclusively in a court of competent jurisdiction by the Attorney General or any district attorney…or upon the complaint of any board, officer, person, corporation or association or by any person who has suffered injury in fact and has lost money or property as a result of such unfair competition.”

The pleading accordingly alleges that “Plaintiffs have been personally aggrieved by Defendants’ unlawful business acts and practices, as alleged herein, including, but not limited to, the loss of money and/or property.” [Para. 51].

Defendants seem to argue that this is not true, or that facts showing a loss of money or property are not specifically alleged.

Plaintiffs argue that they need not show the loss of money where they were discriminated against, but the case relied upon, People v. Cappuccio, Inc. (1988) 204 Cal.App.3d 750, involved an action brought by the attorney general, not by a private person, who is still, under the statute, required to have suffered “injury in fact” and “lost money or property” as a result of the conduct.

A plaintiff has been held to suffer an injury in fact for purposes of standing under the unfair business practices law when he or she has:
1) expended money due to the defendant’s acts of unfair competition
(See Aron v. U-Haul Co. of California (2006) 143 Cal.App.4th 796, 802–803
[plaintiff alleged he was required to purchase excess fuel when returning rental truck]);
2) lost money or property
(See Huntingdon Life Sciences, Inc. v. Stop Huntingdon Animal Cruelty USA, Inc. (2005)
129 Cal.App.4th 1228, 1240, 1262 [plaintiff’s home and car were vandalized by
defendant’s protestors]); or
3) been denied money to which he or she has a cognizable claim
(See Progressive West Ins. Co. v. Superior Court (2005) 135 Cal.App.4th 263, 269–270
[insurance company paid insured’s medical bills, then sued to recover that money when
insured collected damages from the third party who caused his injuries; insured had
standing to bring UCL claim against insurance company]).

The statute also imposes a causation requirement. Hall v. Time Inc. (2008) 158 Cal. App. 4th 847, 855. The phrase “as a result of” in its plain and ordinary sense means “caused by” and requires a showing of a causal connection. Id.

Here, it is not clear how plaintiffs lost money or property as a result of the alleged unfair business practices. Plaintiffs could conceivably allege that their purchase of the cupcakes resulted in a loss of money, but it is not clear that the purchase, which occurred before the unfair business practice occurred as now alleged, was caused by the unfair business practice. The demurrer is sustained.