Joseph Stone v. Dennis Lee et al.

Lee seeks judicial notice of a copy of the federal district court’s remand order, attached as exhibit 1 to the request. The request is denied as unnecessary. (See Bolanos v. Superior Court (2008) 169 Cal.App.4th 744, 761 [a written trial court ruling has no precedential value]; In re Marriage of Shaban (2001) 88 Cal.App.4th 398, 409 [there is no “horizontal stare decisis”].)

LEGAL STANDARDS FOR DEMURRER

In ruling on a demurrer, the court accepts as true all properly pleaded material factual allegations but does not accept as true contentions, deductions or conclusions of fact or law. (Valero v. Spread Your Wings, LLC (2023) 88 Cal.App.5th 243, 253.) Code of Civil Procedure section 430.60 states that “[a] demurrer shall distinctly specify the grounds upon which any of the objections to the complaint, cross-complaint, or answer are taken. Unless it does so, it may be disregarded.” The California Rules of Court also require that the demurrer itself (distinct from a supporting memorandum) specify the target of any objection and the grounds. (Cal.

Rules of Court, rules 3.1103(c), 3.1112(a), 3.1320(a) [“Each ground of demurrer must be in a separate paragraph and must state whether it applies to the entire complaint, cross-complaint, or answer, or to specified causes of action or defenses.”].)

The court cannot consider extrinsic evidence when ruling on a demurrer. This includes declarations. The court has considered the declaration from Lee’s counsel only to the extent it discusses the meet and confer efforts required by statute. The court has not considered the attached exhibits. Finally, “points raised in the reply brief for the first time will not be considered, unless good reason is shown for failure to present them before.” (Proctor v. Vishay Intertechnology, Inc. (2013) 213 Cal.App.4th 1258, 1273.)

DISCUSSION

Lee argues that the first cause of action (the only one alleged against him) fails to state sufficient facts as alleged against him because “Labor Code sections 201 and 202 do not impose individual liability, and Plaintiff fails to allege sufficient facts establishing that Defendant Lee was a qualifying managing agent under Labor Code section 203 via Labor Code section 558.1, or that he personally and willfully caused any violation as required by Labor Code section 203.” (Notice of Demurrer and Demurrer at p. 2:9-12.)

Plaintiff argues Lee’s demurrer is “procedurally improper” because Lee’s meet and confer efforts were inadequate. But a failure to meet and confer is not a basis for overruling a demurrer. (Code Civ. Proc., § 430.41, subd. (a)(4).) The court will therefore consider the demurrer on its merits.

The basis for Lee’s individual liability for a violation of Labor Code sections 201 or 202 can come only via Labor Code sections 203 and 558.1. Labor Code section 201 states that if “an employer discharges an employee, the wages earned and unpaid at the time of discharge are due and payable immediately.” Labor Code section 202 states that if “an employee not having a written contract for a definite period quits his or her employment, his or her wages shall become due and payable not later than 72 hours thereafter, unless the employee has given 72 hours previous notice of his or her intention to quit, in which case the employee is entitled to his or her wages at the time of quitting.” (Italics added.)

Labor Code section 203 states that if “an employer willfully fails to pay, without abatement or reduction, in accordance with Sections 201, 201.3, 201.5, 201.6, 201.8, 201.9, 202, and 205.5, any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced.”

Labor Code section 558.1 provides:

(a) Any employer or other person acting on behalf of an employer, who violates, or causes to be violated, any provision regulating minimum wages or hours and days of work in any order of the Industrial Welfare Commission, or violates, or causes to be violated, Sections 203, 226, 226.7, 1193.6, 1194, or 2802, may be held liable as the employer for such violation.

(b) For purposes of this section, the term “other person acting on behalf of an employer” is limited to a natural person who is an owner, director, officer, or managing agent of the employer, and the term “managing agent” has the same meaning as in subdivision (b) of Section 3294 of the Civil Code.

(c) Nothing in this section shall be construed to limit the definition of employer under existing law. 12

The first cause of action consists of conclusory allegations against “Defendants.” (Complaint at ¶¶ 54-56.) The first cause of action is entirely dependent upon general allegations incorporated by reference, such as the allegations in paragraph 5 that Lee “had plenary ability to supervise, manage, hire, and fire” Plaintiff. Neither first cause of action, nor the complaint in general, references Labor Code section 558.1.

The court in Espinoza v. Hepta Run, Inc. (2022) 74 Cal.App.5th 44, 59 (Espinoza) explained that “in order to ‘cause’ a violation of the Labor Code, an individual must have engaged in some affirmative action beyond his or her status as an owner, officer or director of the corporation.” At the same time, involvement in the day-to-day operations is not required. (Ibid.) Thus, for an individual “to be held personally liable he or she must have had some oversight of the company’s operations or some influence on corporate policy that resulted in Labor Code violations.” (Ibid.; accord, Usher v.

White (2021) 64 Cal.App.5th 883, 896–897.) And statutory causes of action must be pleaded with particularity; “the plaintiff must set forth facts in his complaint sufficiently detailed and specific to support an inference that each of the statutory elements of liability is satisfied.” (Mittenhuber v. City of Redondo Beach (1983) 142 Cal.App.3d 1, 5.) This standard of “reasonable particularity” is more lenient than the pleading standard that applies to fraud claims, but it still requires sufficient detail. (See Gutierrez v.

Carmax Auto Superstores California (2018) 19 Cal.App.5th 1234, 1261.)

Plaintiff contends the general allegations in paragraphs 5 and 6 of the complaint are sufficient to support the first cause of action as alleged against Lee. (Opposition at p. 4:7-26 and pp. 8:12-9:4.) But those paragraphs merely recite certain language from Labor Code section 558.1 without citing it. They are also alleged only on information and belief. Even when it is permissible to allege an ultimate fact on the basis of information and belief, a party cannot simply include the phrase “information and belief” without more. (Gomes v.

Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th 1149, 1158-59.) To plead an allegation on the basis of information and belief properly, a plaintiff must allege the facts or information that led him or her to infer or believe the truth of the ultimate factual allegation. (Gomes, supra, 192 Cal.App.4th at pp. 1158-59; see also Brown v. USA Taekwondo (2019) 40 Cal.App.5th 100, 1106 [“where factual allegations are based on information and belief, the plaintiff must allege ‘information that “lead[s] [the plaintiff] to believe that the allegations are true.”’”].)

Allegations made on “information and belief” that lack supporting information are not accepted as true on demurrer. Because the first cause of action does not adequately state a cause of action against Lee as presently drafted, the demurrer is sustained.

A plaintiff bears the burden of proving that an amendment would cure the defect in cause of action identified on demurrer. (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081.) Plaintiff has not met this burden. The opposition argues the demurrer should be overruled and simply makes a generic request for leave to amend “should the court disagree.” (See Opposition at p. 9:22-23.) (Shaeffer v. Califia Farms, LLC (2020) 44 Cal.App.5th 1125, 1145 [“The onus is on the plaintiff to articulate the ‘specifi[c] ways’ to cure the identified defect, and absent such an articulation, a trial or appellate court may grant leave to amend ‘only if a potentially effective amendment [is] both apparent and consistent with the plaintiff’s theory of the case.’ ”].)

But because this is the first pleading challenge in this case, the court will grant Plaintiff leave to amend the first cause of action as alleged against Lee. The court does not grant leave 13

to amend any other causes of action and does not grant leave to add any new causes of action or new parties.

CONCLUSION

Defendant Lee’s request for judicial notice is denied.

Defendant Lee’s demurrer to the complaint’s first cause of action on the ground that it fails to state sufficient facts as alleged against him is sustained with leave to amend. Any amended pleading must be filed and served no later than August 7, 2026.

The court will prepare the order.

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Calendar Line 9 Case Name: Suraj Viswanathan v. AN San Jose Luxury Imports