Jose Martinez v. Damich, Inc., Mario Gavilan, 1975 Corporation, and Adrian G. Gonzalez

(Stanley Mosk Courthouse: Dept. 408) August 20, 2026 DEPARTMENT 408 LAW AND MOTION RULINGS

Martinez's Demurrer to Defendants/Cross-Complainants Damich, Inc., Mario Gavilan, 1975 Corporation, and Adrian G. Gonzalez 's Third Amended Cross-Complaint is OVERRULED as to the second and third causes of action. I. BACKGROUND On August 25, 2025, Plaintiff Jose Martinez ("Martinez") filed a complaint against Defendants Damich dba Carnitas Michoacan ("Damich") and Marion Gavilan ("Gavilan") alleging causes of action for: 1. Failure to Pay Wages [Labor Code Sec.Sec. 201-203, 218, 218.5, 218.6, 1194, 1194.2, 1197.1] 2.

Failure to Pay Minimum Wage [Labor Code Sec.Sec. 1194, 1194.2, et seq.]; 3. Failure to Pay Overtime Wages [Labor Code Sec. 510]; 4. Failure to Provide Meal Periods [Labor Code Sec.Sec. 226.7, 512 and IWC Wage Orders]; 5. Failure to Provide Rest Periods [Labor Code Sec.Sec. 226.7, 512 and IWC Wage Orders]; 6. Failure to Pay Wages Due Upon Termination: Waiting Time Penalties [Labor Code Sec.Sec. 201, 202, and 203]; 7. Failure to Issue Accurate Itemized Wage Statements [Labor Code Sec. 226, 226.3]; 8.

Failure to Keep Accurate Payroll Records [Labor Code Sec.Sec. 1174, 1198]; 9. Shaving or Deleting Over Time Hours Worked [Labor Code, Sec. 1198]; 10. Failure to Pay Sick Leave [Labor Code, Sec. 245, et seq.]; and 11. Unfair Business Practices in Violation of Cal. Business and Professions Code Sec.Sec.17200, et seq. On October 28, 2025, Martinez filed an Amendment to

the Complaint naming Does 1 and 31 as 1975 Corporation and M. Adrian G. Gonzalez ("Gonzalez"), respectively. On December 16, 2025, Defendants/Cross-Complainants Damich, Gavilan, 1975 Corporation, and Gonzalez ("Defendants" or "Cross-Complainants") filed an answer to Martinez's complaint and a cross-complaint against Martinez alleging causes of action for: 1. Intentional Interference with Contractual Relations; 2. Breach of Duty of Loyalty; 3. Civil Conspiracy; 4. Fraud/Abuse of Process; 5. Intentional Interference with Prospective Economic Advantage; 6.

Negligent Interference with Prospective Economic Advantage; and 7. Conversion of Employee and Business Resources. On January 20, 2026, Cross-Complainants filed a First Amended Cross-Complaint ("FACC") alleging causes of action for: 1. Intentional Interference with Contractual Relations; 2. Breach of Duty of Loyalty; 3. Civil Conspiracy; 4. Intentional Interference with Prospective Economic Advantage; and 5. Negligent Interference with Prospective Economic Advantage. On February 20, 2026, Cross-Complainants filed a Second Amended Cross-Complaint ("SACC") alleging causes of action for: 1.

Intentional Interference with Contractual Relations;

2. Breach of Duty of Loyalty; 3. Intentional Interference with Prospective Economic Advantage; and 4. Negligent Interference with Prospective Economic Advantage. On May 26, 2026, the court overruled in part Martinez's Demurrer to Cross-Complainants' SACC as to the second cause of action, sustained in part with leave to amend as to the first, third, and fourth causes of action, and denied Martinez's Motion to Strike. On June 11, 2026, Cross-Complainants filed a Third Amended Cross-Complaint ("TACC") alleging causes of action for: 1.

Breach of Duty of Loyalty; 2. Intentional Interference with Prospective Economic Advantage; and 3. Negligent Interference with Prospective Economic Advantage. On July 10, 2026, Martinez filed this Demurrer to Cross-Complaints' TACC. On August 7, 2026, Cross-Complaints filed an opposition. As of August 18, 2026, no reply has been filed. II. LEGAL STANDARD "The party against whom a complaint or cross-complaint has been filed may object, by demurrer or answer as provided in Section 430.30, to the pleading on any one or more of" various grounds listed in statute. (Code Civ.

Proc., Sec. 430.10.) When considering demurrers, courts read the allegations liberally and in context. In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice.¿(Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.)¿"A demurrer tests the pleading alone, and not the evidence or facts alleged." (E-Fab, Inc. v. Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) As such, the court assumes the truth of the complaint's properly pled or implied factual allegations. (Ibid.)

The only issue a demurrer is concerned with is whether the complaint, as it stands, states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) Where a demurrer is sustained, leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) The burden is on the plaintiff to show the court that a pleading can be amended successfully.

(Id.; Lewis v. YouTube, LLC (2015) 244 Cal.App.4th 118, 226.) However, "[i]f there is any reasonable possibility that the plaintiff can state a good cause of action, it is error to sustain a demurrer without leave to amend." (Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240, 245.) III. DISCUSSION Martinez demurs to the second and third causes of action for intentional and negligent interference with prospective economic advantage alleged in Cross-Complainants' TACC pursuant to Code of Civil Procedure section 430.10, subdivision (e) and (f), on the grounds that it fails to state facts sufficient to constitute the alleged causes of action and it is uncertain.

The elements of a claim for intentional interference with prospective economic advantage include "(1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of the relationship; (3) intentional or negligent acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant." (Crown Imports, LLC v.

Superior Court (2014) 223 Cal.App.4th 1395, 1404 [citations, brackets, and quotation marks omitted].) Further, "the alleged interference must have been wrongful by some measure beyond the fact of the interference itself. For an act to be sufficiently independently wrongful, it must be unlawful, that is, it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard." (Ibid.) "The elements of negligent interference with prospective economic advantage are (1) the existence of an economic relationship between the plaintiff and a third party containing the probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of the relationship; (3) the defendant's knowledge (actual or construed) that the relationship would be disrupted if the defendant failed to act with reasonable care; (4) the defendant's failure to act with reasonable care; (5) actual disruption of the relationship; and (6) economic harm proximately caused by the defendant's negligence." (Redfearn v.

Trader Joe's Co. (2018) 20 Cal.App.5th 989, 1005.) Martinez argues that the TACC fails to allege sufficient facts establishing the existence of economic relationships with customers to support such causes of action. (Demurrer, at pp. 6-10.) Martinez also argues that the TACC fails to allege sufficient facts demonstrating an independent wrongful act. (Id., at pp. 10-12.) In its previous ruling sustaining Martinez's demurrer as to the intentional and negligent interference with prospective economic advantage claims, the court found that C ross-Complainants failed to allege the existence of actual economic relationships with customers and found that the allegations regarding Martinez coercing other employees to quit were insufficient as no independent wrongful act was alleged to support the cause of action following his termination. (See Minute Order, dated May 26, 2026.)

In comparison, the TACC alleges that, on January 9, 2025, Martinez was scheduled to work as shift manager from 4:00 p.m. to 12:00 a.m. for Damich, along with three other employees. (TACC, P. 12.) Cross-Complainants allege that, around 4:10 p.m., Martinez and the other employees were outside the restaurant, talking, and not checking in for work at their scheduled start time. (Id., P. 13.) The shift manager approached them and requested that they return inside to begin work. (Ibid.) In turn, Martinez allegedly argued with the shift manager and threatened to leave, stating that he would take the other employees with him. (Id., P. 14.)

The TACC alleges that Martinez then ordered the other employees to abandon work and that Martinez and the other employees walked out, leaving the restaurant without staff and effectively closing the business during peak dinner hours. (Ibid.) Martinez and the other employees returned after more than two and a half hours later. (Id., P. 15.) In support of the second and third causes of action, the TACC alleges that approximately nine customers were actively present inside and immediately outside the Damich's restaurant in line and in the process of conducting business with Cross-Complainants at the time of the walkout on January 9, 2025; that Martinez directly observed these customers and was fully aware of their presence when he ordered the employees to abandon their posts; and that approximately forty to fifty additional existing patrons arrived at the restaurant during the two-and-one-half-hour closure and were turned away and unable to be served. (Id., P.P. 45, 61.)

The TACC also alleges that Martinez's conduct on January 9, 2025, was independently wrongful as Martinez was still employed as shift manager and owed Cross-Complainants a duty of loyalty; Martinez violated this duty of loyalty by orchestrating a coordinated abandonment of work duties during active dinner service, with the specific knowledge that customers were present in line and that the walkout would force immediate closure and directly disrupt those existing customer relationships; and that such conduct constitutes a violation of a determinable legal standard. (Id., P.P. 44, 60.)

The court finds that such allegations are sufficient to establish the existence of economic relationships with customers which would have eventually yielded an economic benefit. (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1164, quoting Westside Center Associates v. Safeway Stores 23, Inc. (1996) 42 Cal.App.4th 507, 524 [the tort of intentional interference with prospective economic advantage "'protects the expectation that the relationship eventually will yield the desired benefit, not necessarily the more speculative expectation that a potentially beneficial relationship will arise"].)

The court also finds that the TACC sufficiently alleges an independent wrongful act based on Martinez's purported breach of the duty of loyalty to Cross-Defendants which is not a claim subject to this demurrer. Alternatively, Martinez appears to argue that Cross-Complainants continued failure to include the facts that led to the walkout is fatal to these claims because if the dispute involved issues regarding unfair treatment from the employer, Martinez would have a right to protest this treatment and a walkout from work would have been justified. (Demurrer, at p. 11.)

The court finds such argument unpersuasive. Moreover, a demurrer would be an improper method to determine the reasonableness of Martinez's conduct even if the allegations were present.

Accordingly, the demurrer is overruled as to the second and third causes of action. IV. CONCLUSION Plaintiff/Cross-Defendant Jose Martinez's Demurrer to Defendants/Cross-Complainants Damich, Inc., Mario Gavilan, 1975 Corporation, and Adrian G. Gonzalez 's Third Amended Cross-Complaint is OVERRULED as to the second and third causes of action. | Home -->)" -->