Serene Corp v. Cross-Defendants

Dr. Glenn is an independent contractor under the test in Dynamex; however, as discussed previously, Labor Code section 2783, subdivision (b), expressly states that Dynamex does not apply to physicians and surgeons. The Court finds Defendants have not presented sufficient admissible evidence to create a triable issue of material fact regarding Dr. Glenn's classification as an employee. Accordingly, Plaintiff's Motion for Summary Adjudication is GRANTED.

Plaintiff/Cross-Defendant Serene Corp's Demurrer to the Cross-Complaint is OVERRULED. Cross-Complainants to give notice.

REASONING

Plea in Abatement

In its Reply, Serene withdraws its request for dismissal based on identical claims raised in related Los Angeles Superior Court Case No. 25SMCV04823, Adamian Family Trust v. Rene's Cultivar, et al. ("the Adamian Case"). Serene instead seeks an order of abatement under Code of Civil Procedure section 597. (Reply, 1:22-25.)

Serene has not established either dismissal or abatement is warranted in the first instance. The parties to the Adamian Case are not the same as the parties to this action, and the claims in that action arise from a different agreement (a lease between Defendants and the Adamian Family Trust). (See California Union Ins. Co. v. Trinity River Land Co. (1980) 105 Cal.App.3d 104, 108 [to warrant abatement "the defendant must show that the parties, cause of action, and issues are identical, and the same evidence would support the judgment in each case"].)

Serene may also not convert its claim for relief from dismissal to abatement in its Reply without proper notice. Serene's requests for dismissal and abatement are denied.

Demurrer for Uncertainty / Failure to Plead Alter Ego

Serene also announces in its Reply that it "does not further press CCP Sec. 430.10(f) uncertainty". (Reply, 1:19-20.) This appears to go to the question of alter ego, in the sense that Serene concedes the relaxed pleading standard for alter ego liability. (Reply, 4:14-15; see Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 235-236 [applying relaxed pleading standard for alter ego based on defendants' superior knowledge of facts].)

Still, Serene contends the Court should still reject Defendants' pleading because they offer only "conclusory alter ego allegations contradicted by the pleading's own factual admissions ... ." (Reply, 4:14-17, citing Leek v. Cooper (2011) 194 Cal.App.4th 399, 415;)

In this regard, Serene argues Defendants contradict themselves by alleging Serene is "wholly owned and controlled by Peter Tejera" while simultaneously alleging Tejera holds no corporate position and another individual is Serene's "sole officer and director." (Reply, 4:18-22.)

The Court disagrees that these allegations are contradictory. Defendants assert Tejera effectively owns and controls Serene, in the manner contemplated for alter ego liability, and the position of officer and director is nominal or illusory. The paragraph of the cross-complaint cited by Serene is clear on this point. (See Cross-Compl., P. 6 ["Peter Tejera's relative ... serves as a nominee to create the appearance of separate corporate existence while Peter Tejera exercises complete control"].)

Serene has withdrawn its demurrer for uncertainty; to the extent it asserts Defendants fail to state any of their claims because they have failed to plead alter ego liability, the Court disagrees.

Serene as Non-Party Note Holder

For all claims based partly on the Asset Purchase Agreement, Serene contends it may not be held at fault for the Agreement's illegality because it is a non-party holder in due course of the Promissory Note, not a party to the Agreement itself. This argument relies on substantially the same premise as Serene's uncertainty argument: that in order for Defendants to assert their claims against Serene, they must allege Serene is Tejera's alter ego and/or that Serene possessed the same actual knowledge as Tejera of the transaction's purported illegality.

Defendants overcome this challenge by sufficiently alleging that Serene operates as the alter ego of Tejera. Tejera's actual knowledge of the transaction's illegality, which Serene does not argue is insufficiently alleged in the cross-complaint, may be ascribed to Serene. (See Toho-Towa Co., Ltd. v. Morgan Creek Productions, Inc. (2013) 217 Cal.App.4th 1096, 1106-1107 [alter ego corporation's " 'separateness has ceased' " and " 'has ... no separate mind, will or existence of its own' "].)

Serene is not saved from Defendants' claims based on the APA's illegality, because Defendants have sufficiently pled that Serene operates as Tejera's alter ego.

Pleading in the Alternative

Serene also contends Defendants may not assert claims for rescission and breach at the same time in their complaint. This is incorrect. It is well-established that a party to a contract dispute may plead claims for rescission and breach, and claims in law and equity, in the alternative. "While a complaint may not plead inconsistent facts, it may plead inconsistent legal theories." (See Berman v. Bromberg (1997) 56 Cal.App.4th 936, 944-945; Thompson v. County of Fresno (1963) 59 Cal.2d 686, 690 ["[i]n the absence of inconsistent factual allegations any inconsistency between plaintiff's legal theories is immaterial"]; Steiner v. Rowley (1950) 35 Cal.2d 713, 720 [plaintiff must elect between inconsistent remedies, but pleading in the alternative is not such an election, nor can an election be forced by demurrer].)

Remaining Causes of Action

Although Serene's Notice of Demurrer refers to every cause of action asserted against it, the body of its memorandum does not discuss each cause of action independently. The arguments discussed above dispose of all challenges asserted in the body of Serene's memorandum.

Conclusion

Plaintiff/Cross-Defendant Serene Corp's demurrer to the Cross-Complaint is OVERRULED. | Home -->)" -->