BATES vs CALIFORNIA STATE DEPARTMENT OF HUMAN RESOURCES, et al.

23CV000245: BATES vs CALIFORNIA STATE DEPARTMENT OF HUMAN RESOURCES, et al. 08/06/2026 Hearing on Motion for Summary Adjudication in Department 16C

Tentative Ruling

TENTATIVE RULING:

Plaintiff Thomas M. Bates’ (“Plaintiff”) motion for partial summary adjudication is ruled upon as follows.

I. Overview

Plaintiff initiated this action on April 24, 2023 and filed his operative Third Amended Complaint (“TAC”) on May 6, 2024.

As alleged in the TAC, Plaintiff is a participant in the State of California Savings Plus Tax Deferred Benefits Program (the “Program”). (TAC, ¶ 5.) The Program is a tax-advantage retirement plan established pursuant to Government Code § 19999.5. (TAC, ¶ 1.) CalHR sponsors the program. (TAC, ¶ 1.) Nationwide Investment Advisor’s LLC (“NIA”) is the thirdparty administrator for the Program and operates Nationwide ProAccount (“ProAccount”), “a feebased, managed account service that creates and maintains a personalized retirement investment strategy” for participants in the Program. (TAC, ¶ 2.)

Plaintiff is a previous employee of the State of California. (TAC, ¶¶ 5, 44.) On May 12, 2016, Plaintiff joined the Program, including by rolling over a prior 401K, into a non-managed account invested in a Target Date Fund for members born in 1960. (TAC, ¶ 5.) On January 23, 2017, Plaintiff enrolled his account with ProAccount. (TAC, ¶ 5.) Plaintiff completed and signed a Participant Risk Tolerance Questionnaire (“PRTQ”), which Plaintiff alleges formed a contract and provides instructions to NIA regarding Plaintiff’s psychology, desired objectives, and approach to investments. (TAC, ¶ 6.)

Based on the questionnaire, Plaintiff was enrolled as an aggressive risk profile investor. (TAC, ¶ 6.) On June 14, 2019, Plaintiff updated his PRTQ, which updated his profile to a Moderate Investor profile. (TAC, ¶ 7.) In August 23, 2019, without any additional input, Plaintiff’s profile was updated to Moderate Growth, which remained consistent with Plaintiff’s objectives. (TAC, ¶ 7.) In March 2020, Plaintiff again modified his risk profile to a Conservative Investor. (TAC, ¶ 8.)

Plaintiff further alleges that, on October 7, 2021, without Plaintiff having updated a PRTQ, NIA sent a letter indicating Plaintiff’s account was changed to an Aggressive Growth Model. (TAC, ¶

23CV000245: BATES vs CALIFORNIA STATE DEPARTMENT OF HUMAN RESOURCES, et al. 08/06/2026 Hearing on Motion for Summary Adjudication in Department 16C

8.) Plaintiff discovered the letter and the change on or around February 6, 2022. (TAC, ¶ 8.) Plaintiff contends that the reassignment was done after Plaintiff changed his age from 60 to 61 using the “My Interactive Retirement Planning Tool,” triggering a review of his account by Wilshire. (TAC, ¶ 10.) Plaintiff alleges the reassignment resulted in an avoidable loss of approximately 20% by the first quarter of 2022. (TAC, ¶ 8.)

The TAC names California Department of Human Resources (“CalHR”) and NIA as defendants (collectively “Defendants”) and, in sum, alleges Defendants breached various contractual and fiduciary duties by ignoring Plaintiff’s expressed statements indicating Plaintiff’s primary goal was to conserve the initial investment, permitting Plaintiff’s account to be improperly reassigned to aggressive based on an algorithm rather than Plaintiff’s instructions, and failing to provide complete and accurate information necessary to understand the management of the Plaintiff’s account. (TAC, ¶¶ 9-41.) The TAC also alleges that the reassignment constitutes age discrimination because it has a negative effect on persons over the age of 40 near retirement. (TAC, ¶¶ 42-45.)

Plaintiff’s TAC asserts the following seven causes of action against CalHR and NIA: (1) “Breach of Fiduciary Duty of Prudence and Care and Malfeasance” (2) “Breach of Contract and Failure to Fully Disclose Malfeasance/Misfeasance” (3) “Breach of Contract and Failure to Disclose malfeasance/Misfeasance” (4) “Conflict of Interest Self-Enrichment of a Fiduciary Malfeasance, Misfeasance, Nonfeasance” (5) Fiduciary Failure to Disclose, Malfeasance” (6) “Failure to Perform Contracted Services, Malfeasance” and (7) Age Discrimination Malfeasance Govt. Code § 12940(a)”.

On August 23, 2024, this Court (Hon. Richard C. Miadich) ruled on Defendants’ demurrer to the TAC. (See August 23, 2024, Minute Order.) Specifically, this Court sustained the demurrer without leave to amend as to each cause of action brought against CalHR. (Ibid.) This Court further sustained, without leave to amend, Plaintiff’s fourth cause of action for conflict of interest and seventh cause of action for age discrimination brought against NIA. (Ibid.) Accordingly, the only remaining causes of action are the first, second, third, fifth and sixth causes of action against NIA.

Plaintiff now moves for “an order granting partial summary adjudication in favor of Plaintiff and against [NIA] on the four issues set forth below.” (Notice of Motion at 1:24-27.) Plaintiff sets forth the four issues as follows:

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

23CV000245: BATES vs CALIFORNIA STATE DEPARTMENT OF HUMAN RESOURCES, et al. 08/06/2026 Hearing on Motion for Summary Adjudication in Department 16C

Issue 1 — Contractual Scope.

Defendant [NIA’s] authority to allocate Plaintiff’s account funds under the Nationwide ProAccount Participant Agreement signed by Plaintiff on January 6, 2017, was — and is — limited to allocations that fall within Plaintiff’s investment goals and risk-tolerance profile as established under pages 7-8 of that Agreement. This adjudication confirms and applies, for purposes of this action, the legal interpretation of the Participant Agreement set forth in this Court’s April 2, 2024 Minute Order on Demurrer.

Issue 2 — MIRP Ownership and Wilshire’s Non-Involvement.

Nationwide Investment Advisors, LLC solely designed, owned, and operated the “My Interactive Retirement Planner” tool. Wilshire Associates had no role in the development, design, ownership, or operation of MIRP. Any duty owed by NIA to Plaintiff with respect to MIRP — and any conduct by NIA in connection with the MIRP tool that triggered the October 7, 2021 reassignment of Plaintiff’s portfolio — is the responsibility of NIA, not of Wilshire.

Issue 3 — No Participant-Consent Step in NIA’s Portfolio-Assignment Architecture.

Neither the Nationwide ProAccount Participant Agreement, the December 2018 Amendment to that Agreement, the MIRP tool itself, nor NIA’s internal portfolio-assignment architecture (as depicted in NIA’s own documents bearing Bates Nos. NIA-2604 and NIA-0671) contains or requires any pre-reassignment, separate, informed participant-consent step before NIA may reassign a participant’s portfolio.

Issue 4 — Punitive Damages Predicate Under Civil Code § 3294(c)(3).

The undisputed evidence — including NIA’s own Form CRS dated March 30, 2024, NIA’s own internal Nationwide ProAccount® presentation produced at Bates Nos. NIA-0660 through NIA-0678, and NIA’s own November 18, 2021 CalHR Finalist Interview Agenda produced at Bates No. NIA-2695 — is sufficient to permit a reasonable jury, by clear and convincing evidence, to find concealment of material facts within the meaning of California Civil Code § 3294(c)(3), supporting Plaintiff’s claim for punitive damages.

(Notice of Motion at 2:3-3:8.)

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

23CV000245: BATES vs CALIFORNIA STATE DEPARTMENT OF HUMAN RESOURCES, et al. 08/06/2026 Hearing on Motion for Summary Adjudication in Department 16C

Plaintiff’s Notice of Motion further provides “notice pursuant to Code of Civil Procedure § 437c(t)”, stating as follows:

Pursuant to Code of Civil Procedure section 437c, subdivision (t), Plaintiff hereby gives notice that this Motion seeks summary adjudication of legal issues and the predicate for a claim for punitive damages, and is brought on grounds permitted by sections 437c(f) and (t).[1]

(Id., at 3:21-23.)

NIA opposes. Trial is currently set for September 8, 2026.

II.

Legal Standard

In evaluating a motion for summary judgment or adjudication, the Court engages in a three-step process.

First, the Court identifies the issues framed by the pleadings. The pleadings define the scope of the issues on a motion for summary judgment or summary adjudication. (FPI Dev. Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 381-382.) Because a motion for summary judgment or summary adjudication is limited to the issues raised by the pleadings (Lewis v. Chevron (2004) 119 Cal.App.4th 690, 694), all evidence submitted in support of or in opposition to the motion must be addressed to the claims and defenses raised in the pleadings.

The Court cannot consider an unpled issue in ruling on a motion for summary judgment or summary adjudication. (Roth v. Rhodes (1994) 25 Cal.App.4th 530, 541.) The papers filed in response to a motion for summary judgment or summary adjudication may not create issues outside the pleadings and are not a substitute for an amendment to the pleadings. (Tsemetzin v. Coast Federal Savings & Loan Assn. (1997) 57 Cal.App.4th 1334, 1342.) Indeed, it has often been noted that “[i]t would be patently unfair to allow plaintiffs to defeat [defendant’s] summary judgment motion by allowing them to present a “moving target” unbounded by the pleadings.” (Melican v.

Regents of University of California, (2007) 151 Cal.App.4th 168, 176-177.)

Next, the Court must determine whether the moving party has met its burden. A plaintiff moving

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

23CV000245: BATES vs CALIFORNIA STATE DEPARTMENT OF HUMAN RESOURCES, et al. 08/06/2026 Hearing on Motion for Summary Adjudication in Department 16C

for summary judgment meets its burden of showing that there is no defense to its cause of action by proving each element of its cause of action. (Code Civ. Proc. § 437c, subd. (p)(1).) It is no longer required to also disprove any defense asserted by the defendant. (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2024) ¶ 10:235, p. 10-110 [when plaintiff moves for summary judgment ”[u]nlike former law, it is not plaintiff’s initial burden to disprove affirmative defenses and cross-complaints asserted by defendant”].)

If the plaintiff does so, the burden shifts to the defendant to show that a triable issue of fact exists as to that cause of action or defense. In doing so, the defendant cannot rely on the mere allegations or denial of its pleadings, “but, instead, shall set forth the specific facts showing that a triable issue of material fact exists.” (Code Civ. Proc. § 437c, subd. (p)(1).) A triable issue of material fact exists “if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof. [fn.

Omitted.]” (Aguilar v. Atlantic Richfield Co., supra, 25 Cal. 4th at 850.)

While a summary adjudication motion is treated largely the same as one for summary judgment, there are a few important differences. One of these differences is that California Rule of Court, Rule 3.1350, subdivision (b) mandates that issues presented for summary adjudication be stated in the notice of motion and repeated verbatim in the separate statement. Another difference is that summary adjudication cannot be granted unless it “completely disposes” of a cause of action, affirmative defense, claim for punitive damages, or question of duty. Code of Civil Procedure §437c, subdivision (f)(1) provides in its entirety:

A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty, if the party contends that the cause of action has no merit, that there is no affirmative defense to the cause of action, that there is no merit to an affirmative defense as to any cause of action, that there is no merit to a claim for damages, as specified in Section 3294 of the Civil Code, or that one or more defendants either owed or did not owe a duty to the plaintiff or plaintiffs. A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.

Finally, the Court reminds the parties of the “Golden Rule” of summary judgment or adjudication: “If it is not set forth in the separate statement, it does not exist.” (See Zimmerman, Rosenfeld v. Larson (2005) 131 Cal.App.4th 1466, 1477 [italics in original].) Moreover, according to Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243, a moving party’s inclusion of facts in its separate statement effectively concedes each fact’s “materiality,” whether intended or not, and if there is a triable dispute relating to any one of these facts, the motion must be denied. (Id. at 252 [citing Weil & Brown, Civil Procedure Before Trial, Ch.10:95.1].)

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

23CV000245: BATES vs CALIFORNIA STATE DEPARTMENT OF HUMAN RESOURCES, et al. 08/06/2026 Hearing on Motion for Summary Adjudication in Department 16C

In ruling on the motion, the Court must consider the evidence and inferences reasonably drawn from the evidence in the light most favorable to the party opposing the motion. (Aguilar, supra, 25 Cal.4th at 843.)

III. Evidentiary Rulings

NIA’s request for judicial notice submitted in opposition is GRANTED for the limited purposes permitted for judicial notice. (See, Evid. Code, § 451, subd. (a); § 452, subds. (b)-(d); see also, Johnson & Johnson v. Superior Court (2011) 192 Cal.App.4th 757, 768 [court may take judicial notice of the existence of court documents but not the truth of the statements contained therein]; Kilroy v. State of California (2004) 119 Cal.App.4th 140, 145-148; Sosinsky v. Grant (1992) 6 Cal.App.4th 1548, 1569-70.)

The Court does not rule on NIA’s evidentiary objections filed in support of their opposition, nor does the Court rule on Plaintiff’s objections submitted in support of his reply, since these objections concern evidence deemed immaterial to the decision on the motion.

IV.

Discussion

As a threshold matter, Plaintiff states in his reply that:

As to Issue 4, Plaintiff does not seek summary adjudication on this motion. Plaintiff presents the concealment record under Civil Code section 3294(c)(3) to answer NIA’s own pending opposition papers and to preserve the predicate for trial, but reserves Issue 4—on which intent is a jury question; for trial. NIA’s reliance on Haines v. Parra (1987) 193 Cal.App.3d 1553 (a plaintiff may not summarily adjudicate its own punitive-damages claim) is therefore moot as to the live motion.

(Reply at 3:9-13.)

The Court construes this statement by Plaintiff as a withdrawal of its request for summary

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

23CV000245: BATES vs CALIFORNIA STATE DEPARTMENT OF HUMAN RESOURCES, et al. 08/06/2026 Hearing on Motion for Summary Adjudication in Department 16C

adjudication of Issue 4. Accordingly, only Issues 1-3 remain for the Court’s consideration, which the Court turns to below.

Issues 1-3

“The language in Code of Civil Procedure section 437c, subdivision (f) makes it clear that a motion for summary adjudication cannot be considered by the court unless the party bringing the motion duly gives notice that summary adjudication is being sought.” (Gonzales v. Superior Court (1987) 189 Cal.App.3d 1542, 1545-1546.) “If summary adjudication is sought, whether separately or as an alternative to the motion for summary judgment, the specific cause of action, affirmative defense, claims for damages, or issues of duty must be stated specifically in the notice of motion and be repeated, verbatim, in the separate statement of undisputed material facts.” (Cal. Rules of Court, rule 3.1350(b).) A movant’s failure to comply with the requirements of a separate statement, in the Court’s discretion, may constitute a sufficient ground for denying the motion. (Code Civ. Proc. § 437c(b)(1).)

The Court finds that Plaintiff has failed to comply with Code of Civil Procedure section 437c and California Rules of Court, rule 3.1350(b). Plaintiff’s notice of motion, while purportedly seeking summary adjudication, does not state the specific cause of action, affirmative defense, claims for damages, or issues of duty it seeks adjudication of. Indeed, neither the notice nor the separate statement specifically references any of the remaining first, second, third, fifth, and sixth causes of action asserted against NIA. This significant failure alone warrants denial of Plaintiff’s motion.

Additionally, Plaintiff’s separate statement only further demonstrates the deficiency in Plaintiff’s motion for summary adjudication in that it fails to repeat each issue for summary adjudication in full, much less in verbatim as required by the California Rules of Court. For example, the separate statement presents Issue 1 as simply “Issue 1—Contractual Scope.” (Plaintiff’s Moving Separate Statement at 1:22-23.) Not only does this purported issue in Plaintiff’s separate statement still fail to reference any specific causes of action, but it is only a small portion of Issue 1 as set forth in Plaintiff’s notice of motion.

Issues 2 and 3 similarly vary between Plaintiff’s notice of motion and separate statement (in addition to failing to reference any cause of action). Accordingly, Plaintiff has failed to repeat Issues 1-3 “verbatim” in his separate statement as specifically required by California Rules of Court, rule 3.1350(b). This failure also warrants denial of Plaintiff’s motion.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

23CV000245: BATES vs CALIFORNIA STATE DEPARTMENT OF HUMAN RESOURCES, et al. 08/06/2026 Hearing on Motion for Summary Adjudication in Department 16C

Accordingly, given Hill’s failure to comply with Code of Civil Procedure section 437c(b)(1) and California Rules of Court, rule 3.1350(b), the Court finds that the deficiencies in Defendant’s notice of motion and separate statement warrant denial of Defendant’s motion for summary adjudication and the motion is DENIED on such grounds.

Moreover, the Court agrees with NIA that Plaintiff’s stated issues do not “completely dispose” of a cause of action, affirmative defense, claim for punitive damages, or question of duty as required by Code of Civil Procedure section 437c, subdivision (f)(1).

Here, as framed by Plaintiff’s notice of motion, Issue 1 pertains to the contractual scope of the Agreement, Issue 2 pertains to MIRP ownership, and Issue 3 pertains to NIA’s “internal portfolio-assignment architecture.” (Notice of Motion at 2:3-26.) However, as argued by NIA in opposition, none of these issues would result in the complete resolution of Plaintiff’s breach of contract or fiduciary duty claims, any affirmative defense, claim for damages, or issue of duty as required by Code of Civil Procedure section 437c, subdivision (f)(1). In this regard, the Court is unpersuaded by Plaintiff’s argument in reply that that Issues 1, 2, and 3 present issues of duty for adjudication. (See Reply at 2:16.)

Thus, even if there was sufficient evidence to support the finding sought by Issues, 1-3, such a finding would not dispose of any cause of action alleged in the Complaint. As stated above, a plaintiff moving for adjudication judgment has the burden of showing that there is no defense to its cause of action by proving each element of its cause of action. (Code Civ. Proc. § 437c, subd. (p)(1).) Accordingly, the summary adjudication as to Issue 1-3 must be DENIED for this reason as well.

VI.

Disposition

For the foregoing reasons, Plaintiff’s motion for summary adjudication is DENIED in its entirety.

This minute order is effective immediately. Pursuant to California Rules of Court, rule 3.1312, Plaintiff shall prepare an appropriate order which conforms to Code of Civil Procedure section 437c(g).

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

23CV000245: BATES vs CALIFORNIA STATE DEPARTMENT OF HUMAN RESOURCES, et al. 08/06/2026 Hearing on Motion for Summary Adjudication in Department 16C

[1] A motion for summary adjudication of “a legal issue or claim for damages that does

not completely dispose of cause of action, affirmative defense or issue of duty” under subdivision (t) of section 437c requires a joint stipulation of the parties declarations that motion will further judicial economy or significantly improve chances of settlement. However, there is no stipulation in the record or any declarations making these assertions. Accordingly, the Court does not consider this motion as having been brought under subdivision (t).

NOTICE:

Consistent with Local Rule 1.06(B), any party requesting oral argument on any matter on this calendar must comply with the following procedure:

To request limited oral argument, on any matter on this calendar, you must call the Department 16C Oral Argument Request Line at (916) 874-1475 by 4:00 p.m. the Court day before the hearing and advise opposing counsel. At the time of requesting oral argument, the requesting party shall leave a voice mail message: a) identifying themselves as the party requesting oral argument; b) indicating the specific matter/motion for which they are requesting oral argument; and c) confirming that it has notified the opposing party of its intention to appear and that opposing party may appear via Zoom using the Zoom link and Meeting ID indicated below. If no request for oral argument is made, the tentative ruling becomes the final order of the Court.

Unless ordered to appear in person by the Court, parties may appear remotely either telephonically or by video conference via the Zoom video/audio conference platform with notice to the Court and all other parties in accordance with Code of Civil Procedure §367.75. Although remote participation is not required, the Court will presume all parties are appearing remotely for non-evidentiary civil hearings.

The Department 16C Zoom Link is https://saccourt-cagov.zoomgov.com/j/16030877014 and the Zoom Meeting ID is 160 3087 7014. To appear on Zoom telephonically, call (833) 568-8864 and enter the Zoom Meeting ID referenced above. NO COURTCALL APPEARANCES WILL BE ACCEPTED.

Parties requesting services of a court reporter will need to arrange for private court reporter services at their own expense, pursuant to Government code §68086 and California Rules of Court, Rule 2.956. Requirements for requesting a court reporter are

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

23CV000245: BATES vs CALIFORNIA STATE DEPARTMENT OF HUMAN RESOURCES, et al. 08/06/2026 Hearing on Motion for Summary Adjudication in Department 16C

listed on the Court Reporter Services webpage available on the Sacramento Superior Court website at https://saccourt.ca.gov/general-information/court-reporter-servicestranscripts. Parties may contact Court- Approved Official Reporters Pro Tempore by utilizing the list of Court Approved Official Reporters Pro Tempore available at https://saccourt.ca.gov/home/showpublisheddocument/227/639084034465370000.

A Stipulation and Appointment of Official Reporter Pro Tempore (CV/E-206) is required to be signed by each party, the private court reporter, and the Judge prior to the hearing, if not using a reporter from the Court’s Approved Official Reporter Pro Tempore list.

Once the form is signed it must be filed with the clerk. If a litigant has been granted a fee waiver and requests a court reporter, the party must submit a Request for Court Reporter by a Party with a Fee Waiver (CV/E-211) and it must be filed with the clerk at least 10 days prior to the hearing or at the time the proceeding is scheduled if less than 10 days away. Once approved, the clerk will forward the form to the Court Reporter’s Office and an official reporter will be provided.

*** EFFECTIVE APRIL 13, 2026, THIS DEPARTMENT HAS MOVED TO THE TANI G. CANTIL-SAKAUYE COURTHOUSE LOCATED AT 500 G STREET IN SACRAMENTO, CA 95814. ALL HEARINGS NOTICED FOR DEPARTMENT 54 WILL BE HEARD IN DEPARTMENT 16C OF THE NEW COURTHOUSE. ***