Etelvina De La Torre v. American National Red Cross et al, No. 2:2013cv04302 - Document 18 (C.D. Cal. 2013)
Court Description: ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS MOTION TO DISMISS 8 . Should she so choose, Plaintiff may amend her complaint consistent with this Order by Judge Dean D. Pregerson. (lc). Modified on 10/9/2013 (lc).
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Etelvina De La Torre v. American National Red Cross et al Doc. 18 1 2 O 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 ETELVINA DE LA TORRE, 12 13 14 15 Plaintiff, v. AMERICAN RED CROSS, an entity unknown; RIO HONDO CHAPTER OF THE AMERICAN RED CROSS, an entity unknown, 16 Defendants. 17 ___________________________ ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. CV 13-04302 DDP (JEMx) ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO DISMISS [Dkt. No. 8] 18 19 Presently before this Court is Defendants’ Motion to Dismiss, 20 Motion for a More Definite Statement, and Motion to Strike (the 21 “Motion”). Having considered the submissions of the parties and 22 heard oral argument, the court grants the Motion in part, denies 23 the Motion in part, and adopts the following order. 24 I. Background 25 Plaintiff Etelvina De La Torre (“Plaintiff”) brings this 26 action against the American Red Cross (“ARC”) and the Rio Hondo 27 Chapter of the American Red Cross (“Rio Hondo”) (collectively 28 “Defendants”). Plaintiff was recruited by Rio Hondo to become the Dockets.Justia.com 1 Executive Director of the Rio Hondo Chapter of the American Red 2 Cross. (Complaint ¶ 7.) She was recruited from another employer, 3 MALDEF, where she had been working for at least four years. (Id.) 4 In order to induce her to take the position at Rio Hondo, Plaintiff 5 alleges that Nancy Kindelan, the Regional CEO for the Rancho Region 6 of the American Red Cross, represented to her that she would be 7 groomed to replace Kindelan, who planned to retire in the near 8 future. (Id.) Plaintiff was also induced to take the position by 9 the promise of a $7,000 annual bonus. (Id. ¶ 8.) Plaintiff signed 10 her offer letter with Rio Hondo on January 21, 2010 and began work 11 in February 2010. (Id. ¶ 7, Exh. A.) 12 Plaintiff’s employment with the Rio Hondo Chapter was at-will. 13 (Id. Exh. A.) Her employment contract states, in relevant part, 14 “the Red Cross ... has the right to transfer, reassign, suspend or 15 demote you, or may terminate your employment at any time for any 16 reason, with or without cause with or without notice. There is no 17 guarantee of long term employment.” (Id.) In addition, the contract 18 contains an acknowledgment “that no representations, inducements, 19 promises or agreements, oral or otherwise, have been made between 20 you and the Rio Hondo Chapter ... which are not included in this 21 letter.” (Id.) 22 Plaintiff alleges that while she was employed at Rio Hondo, 23 Ms. Kindelan, who was her supervisor, treated Hispanic employees 24 differently from others. (Id. ¶ 9.) Plaintiff alleges that Kindelan 25 once referred to Plaintiff as her “Latina token.” (Id. ¶ 10.) 26 Plaintiff also witnessed inappropriate treatment of other Hispanic 27 employees. (Id. ¶¶ 9-10.) Plaintiff also alleges that she never 28 received her bonus payments as required by her contract, receiving 2 1 approximately $6,000 of the promised $7,000 in June 2011 and no 2 bonus payment in June 2012. (Id. ¶ 11.) 3 Not long after Plaintiff was hired by Rio Hondo, ARC began a 4 massive reorganization. (Id. ¶ 13.) In August of 2012, Plaintiff’s 5 position was eliminated as part of the restructuring. (Id.) 6 Plaintiff alleges that this “elimination” was mere pretext for 7 discrimination against her because of her race and/or national 8 origin. (Id. ¶ 15.) 9 Plaintiff originally filed this action in the Los Angeles 10 County Superior Court; Defendants removed the case to this Court. 11 (Notice of Removal, Dkt. 1.) Plaintiff advances eleven causes of 12 action. (Complaint, Dkt. 2.) Among these, Plaintiff claims that she 13 was fraudulently induced to leave her position with MALDEF due to 14 promises that she would soon be promoted to Regional CEO. (Id. ¶¶ 15 27-37.) Plaintiff also advances several claims relating to Rio 16 Hondo’s failure to pay her bonuses. (Id. ¶¶ 38-69.) Plaintiff also 17 claims that her termination was due to her race and/or national 18 origin. (Id. ¶¶ 17-26.) 19 II. Legal Standard 20 A complaint will survive a motion to dismiss when it contains 21 “sufficient factual matter, accepted as true, to state a claim to 22 relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 23 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 24 570 (2007)). 25 “accept as true all allegations of material fact and must construe 26 those facts in the light most favorable to the plaintiff.” Resnick 27 v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000). 28 need not include “detailed factual allegations,” it must offer When considering a Rule 12(b)(6) motion, a court must 3 Although a complaint 1 “more than an unadorned, the-defendant-unlawfully-harmed-me 2 accusation.” 3 allegations that are no more than a statement of a legal conclusion 4 “are not entitled to the assumption of truth.” Id. at 679. 5 other words, a pleading that merely offers “labels and 6 conclusions,” a “formulaic recitation of the elements,” or “naked 7 assertions” will not be sufficient to state a claim upon which 8 relief can be granted. 9 quotation marks omitted). 10 Iqbal, 556 U.S. at 678. Conclusory allegations or In Id. at 678 (citations and internal “When there are well-pleaded factual allegations, a court should 11 assume their veracity and then determine whether they plausibly 12 give rise to an entitlement of relief.” Id. at 679. 13 must allege “plausible grounds to infer” that their claims rise 14 “above the speculative level.” Twombly, 550 U.S. at 555. 15 “Determining whether a complaint states a plausible claim for 16 relief” is a “context-specific task that requires the reviewing 17 court to draw on its judicial experience and common sense.” 18 556 U.S. at 679. 19 III. Discussion 20 Plaintiffs Iqbal, In their Motion, Defendants argue that ARC should be dismissed 21 from this action because it is not a proper defendant. Defendants 22 also argue, with respect to some of Plaintiff’s causes of action, 23 that Plaintiff’s complaint is insufficient under Rule 12(b)(6). 24 A. American Red Cross as Defendant 25 Defendant argues that courts in other cases have determined 26 that ARC is an improper defendant when an employee of a Red Cross 27 chapter files an employment-related grievance, and that, therefore, 28 ARC is an improper defendant here. See, e.g., Owens v. American 4 1 National Red Cross, 673 F. Supp. 1156 (1987); Webb v. American Red 2 Cross, 652 F. Supp. 917 (1986). These cases, however, were decided 3 at summary judgment rather than on motions to dismiss. Various 4 tests that courts have adopted to determine whether a joint 5 employer situation is present under California law turn on “the 6 nature of the work relationship of the parties, with emphasis upon 7 the extent to which the defendant controls the plaintiff’s 8 performance of employment duties.” Vernon v. State of California, 9 116 Cal. App. 4th 114, 124 (2004). “[T]he precise contours of an 10 employment relationship can only be established by a careful 11 factual inquiry.” Graves v. Lowery, 117 F.3d 723, 729 (3d Cir. 12 1997). 13 At this stage, the factual record is not sufficiently 14 developed to make a “careful factual inquiry” to determine whether 15 ARC was a joint employer of Plaintiff with Rio Hondo. The fact that 16 ARC has been found not to be a joint employer with other local 17 chapters in other cases at the summary judgment stage is 18 insufficient to demonstrate that the analysis would necessarily be 19 the same for every local chapter and every employment situation. 20 Therefore, Defendants’ Motion is DENIED as to Defendant ARC. 21 B. Sufficiency of the Complaint 22 Defendants do not challenge the sufficiency of the following 23 causes of action: first cause of action (race/national origin 24 discrimination), second cause of action (wrongful termination), 25 fifth cause of action (breach of contract), and eighth cause of 26 action (failure to pay wages in violation of Cal. Labor Code §§ 201 27 and 203). Therefore, these causes of action remain operative. 28 5 1 1. Third and Fourth Causes of Action (Intentional and/or 2 Negligent Misrepresentation and/or Failure to Disclose 3 Material Facts; Promissory Estoppel) 4 Defendants argue that Plaintiff fails to state a claim for 5 fraud or misrepresentation, or for promissory estoppel. The 6 elements of a cause of action for fraud or misrepresentation are: 7 (1) a misrepresentation about a past or existing fact, or 8 concealment of such facts when under a duty to disclose; (2) 9 scienter; (3) intent to induce reliance on the misrepresentation; 10 (4) justifiable reliance; and (5) resulting damages. Cadlo v. 11 Owens-Illinois, Inc., 125 Cal. App. 4th 513, 519 (2004). In an 12 action for fraud, “a party must state with particularity the 13 circumstances constituting fraud or mistake.” Fed. R. Civ. Proc. 14 9(b). The elements are the same for negligent misrepresentation, 15 except that there is no requirement of intent to induce reliance. 16 In her opposition, Plaintiff reframes her third and fourth 17 claims as a single claim for “promissory fraud,” a type of fraud 18 claim. (Opp. to Motion, Dkt. 15.) She does not contest Defendants’ 19 argument that her promissory estoppel claim should be dismissed. 20 Therefore, the Motion is GRANTED as to Plaintiff’s claim for 21 promissory estoppel. 22 Contrary to Defendants’ assertions that the underlying alleged 23 misrepresentations are not actionable, Plaintiff’s claims that 24 Kindelan represented to her that she would be promoted to Regional 25 CEO and that Kindelan failed to disclose that the ARC would be 26 undergoing a reorganization in the near future are viable. 27 Plaintiff’s allegations meet the heightened pleading requirement 28 for fraud claims, as they state with specificity the statements 6 1 that were made (that Plaintiff was being groomed to become the 2 Regional CEO) and omitted (that ARC would be undergoing a 3 restructuring), the persons who made those statements (Ms. Kindelan 4 and the Red Cross search committee who interviewed Plaintiff), and 5 when those statements were made (during her recruitment). 6 (Complaint ¶¶ 7, 13-14, 28-31.) Plaintiff’s inclusion of these 7 details is sufficient to meet the heightened pleading requirements 8 of Rule 9(b). Therefore, Plaintiff has sufficiently pled the first 9 element of her fraud claim regarding the alleged misrepresentation. 10 Plaintiff has also sufficiently pled each of the remaining 11 elements of her fraud claim. Plaintiff alleges that Kindelan and 12 Rio Hondo knew or should have known that organizational 13 restructuring was imminent and that their failure to inform her of 14 this fact was intended to induce her to rely on their 15 representations regarding her potential promotion to Regional CEO 16 in order to get her to accept the Executive Director position. 17 (Complaint ¶¶ 28-31.) Plaintiff also alleges that she did, in fact, 18 rely on Defendants’ representations, and that as a result she 19 suffered damage, as she would not have left her stable position at 20 MALDEF but for those assurances. (Id. ¶¶ 28-33.) 21 Defendants argue that Plaintiff’s reliance on Kindelan’s oral 22 statements regarding her potential future as Regional CEO is not 23 reasonable in light of the employment contract. Defendants cite 24 case law holding that where an employee is terminated but signed an 25 at-will employment contract, the employee cannot assert a claim for 26 fraud on the basis of assurances that their employment would be 27 long term. See, e.g., Dore v. Arnold Worldwide, Inc., 39 Cal. 4th 28 384, 393-94 (2006); Slivinsky v. Watkins-Johnson Co., 221 Cal. App. 7 1 3d 799, 807 (1990). In those cases, however, the oral promise of 2 long-term employment was directly contradicted by an express term 3 of the employment agreement stating that the employment was at- 4 will. However, in this case nothing in the employment agreement 5 clearly contradicts the oral promises Plaintiff alleges were made 6 and the information Plaintiff alleges was omitted. Therefore, 7 Defendants’ Motion is DENIED with respect to this cause of action. 8 2. Sixth Cause of Action (Breach of the Covenant of Good 9 Faith and Fair Dealing) 10 Defendants argue that Plaintiff fails to state a claim for 11 breach of the covenant of good faith and fair dealing. Defendants 12 argue that this cause of action is superfluous, as Plaintiff does 13 not allege sufficient facts to support a claim for any relief 14 beyond that available for breach of contract. Therefore, Defendants 15 argue that this cause of action should be dismissed as surplusage. 16 Plaintiff’s breach of contract claim is based on the failure 17 of Defendants to pay her the full amount due under the bonus clause 18 of her contract, which states: “You will receive an annual bonus of 19 $7000, first eligible June 30, 2011.” (Complaint, Exh. A.) 20 Plaintiff alleges that she received only a $6,000 bonus in 2011 and 21 no bonus payment in 2012. (Id. ¶ 41.) It is unclear from 22 Plaintiff’s complaint whether she intends to assert that her 23 termination was also a breach of contract. 24 “If the allegations do not go beyond the statement of a mere 25 contract breach and, relying on the same alleged acts, simply seek 26 the same damages or other relief already claimed in a companion 27 contract cause of action, they may be disregarded as superfluous as 28 no additional claim is actually stated. Thus, absent those limited 8 1 cases where a breach of a consensual contract term is not claimed 2 or alleged, the only justification for asserting a separate cause 3 of action for breach of the implied covenant is to obtain a tort 4 recovery.” Careau & Co. v. Security Pacific Business Credit, Inc., 5 222 Cal. App. 3d 1371, 1395 (1990). “[T]he remedy for breach of an 6 employment agreement, including the covenant of good faith and fair 7 dealing implied by law therein, is solely contractual.” Guz v. 8 Bechtel Nat. Inc., 24 Cal. 4th 317, 352 (2000). Plaintiff’s 9 complaint asserts only that there was a contract breach, committed 10 in bad faith, and therefore that Defendants have breached the 11 covenant of good faith and fair dealing. Therefore, Plaintiff’s 12 claim for a breach of the implied covenant is surplusage and 13 Defendants’ Motion is GRANTED as to this cause of action. 14 3. Seventh Cause of Action (Failure to Pay Timely Wages 15 in Violation of Labor Code Section 204) 16 Defendants argue that Plaintiff’s cause of action for failure 17 to pay timely wages in violation of Labor Code Section 204 fails to 18 state a claim. Defendants argue that there are two reasons why this 19 claim should be dismissed: (1) there is no private right of action 20 for violation of Labor Code Section 204, and (2) Labor Code Section 21 204 does not govern the timing of contractual bonus payments. The 22 Court need not decide whether a private right of action exists for 23 violation of Labor Code Section 204, as Plaintiff’s cause of action 24 may be dismissed for the second reason. 25 The text of California Labor Code Section 204 states: 26 All wages ... earned by any person in any employment 27 are due and payable twice during each calendar month, 28 on days designated in advance by the employer as the 9 1 regular paydays. Labor performed between the 1st and 2 15th days, inclusive, of any calendar month shall be 3 paid for between the 16th and the 26th day of the 4 month during which the labor was performed, and labor 5 performed between the 16th and the last day, 6 inclusive, of any calendar month, shall be paid for 7 between the 1st and 10th day of the following month. 8 Cal. Labor Code § 204(a). 9 “The sole purpose of [California Labor Code Section 204] is to 10 require an employer of labor who comes within its terms to maintain 11 two regular pay days each month, within the dates required in that 12 section.” In re Moffett, 19 Cal. App.2d 7, 13, 64 P.2d 1190 (1937). 13 Labor Code Section 204(a) deals solely with the timing of wages and 14 not with whether the correct wages were paid. See Hadjavi v. CVS 15 Pharmacy, Inc., 2010 WL 7695383 (C.D. Cal. 2010). Plaintiff does 16 not allege that Defendants did not maintain two regular pay days 17 each month. Therefore, Defendants' Motion is GRANTED as to 18 Plaintiff’s Section 204 claim. 19 4. Ninth Cause of Action (Violation of California Labor 20 Code Section 226) 21 Defendants argue that Plaintiff fails to state a claim for 22 violation of California Labor Code Section 226. Defendants argue 23 that there are two reasons why this claim, or portions of it, 24 should be dismissed: (1) Plaintiff has not alleged that she 25 suffered any legally cognizable injury, and (2) Plaintiff’s claim 26 as to her 2011 bonus is time-barred. 27 28 Plaintiff alleges a violation of California Labor Code Section 226 on the grounds that Defendants failed to provide her with an 10 1 “accurate itemized statement showing Plaintiff’s gross earned 2 wages.” “Because § 226(e) requires the demonstration of an actual 3 suffered injury, the deprivation of the information required by § 4 226(a), ‘standing alone, is not a cognizable injury.’” Reinhardt v. 5 Gemini Motor Transp., 869 F. Supp. 2d 1158, 1169 (E.D. Cal. 2012) 6 (quoting Price v. Starbucks Corp., 192 Cal. App. 4th 1136, 1143 7 (2011)). An employee is deemed to suffer an injury when there is an 8 inaccuracy in any of the required information under Section 226(a) 9 and the employee cannot “promptly and easily determine from the 10 wage statement alone ... the amount of the gross wages paid to the 11 employee during the pay period.” Cal. Labor Code § 226(e)(2)(B). 12 Plaintiff does not sufficiently allege a cognizable injury 13 under the statute. While Plaintiff does allege that the failure to 14 include her bonus payments on her paycheck constitutes an 15 inaccuracy, Plaintiff does not properly allege that her paycheck 16 was such that she could not “promptly and easily determine” from 17 the wage statement the amount of gross wages or net wages actually 18 paid to her during the pay periods at issue. She has instead simply 19 alleged that the amount she was paid was incorrect. As a result, 20 she has not alleged actual injury resulting from the inaccuracy on 21 her wage statement as required by Section 226. Therefore, 22 Defendants’ Motion is GRANTED with respect to Plaintiff’s Section 23 226 claim, with leave to amend should Plaintiff be able to allege 24 facts showing that she could not easily ascertain the amount of 25 wages actually paid to her or one of the other requirements under 26 226(e)(2)(B). 27 With respect to the time bar issue, to the extent that 28 Plaintiff seeks to amend to show actual injury, Plaintiff cannot 11 1 recover statutory damages based on her allegations of inaccurate 2 wage statements on her June 2011 wage statement. “If a plaintiff 3 attempts to obtain the statutory penalties provided by Labor Code § 4 226(e), then the one year statute of limitations of California Code 5 of Civil Procedure § 340(a) applies.” Reinhardt, 869 F. Supp. 2d at 6 1169-70. The one year statute of limitations for a claim based on 7 Plaintiff’s June 2011 wage statement expired prior to Plaintiff 8 filing this lawsuit on April 23, 2013. However, to the extent that 9 Plaintiff can show that the faulty wage statement for which she 10 seeks relief is either her June 2012 statement or her final 11 paycheck at the time of her termination in August 2012, Plaintiff’s 12 claim for statutory damages is not time-barred. 13 5. Tenth Cause of Action (Violation of California 14 Business and Professions Code §§ 17200 et seq.) 15 Defendants argue that Plaintiff fails to state a claim for 16 violation of California Business and Professions Code Section 17200 17 et seq. Defendants argue that Plaintiff’s claim improperly seeks 18 statutory penalties, which are not recoverable as restitution under 19 Section 17200. Pineda v. Bank of America, 50 Cal. 4th 1389, 1402 20 (2010). 21 Defendants are correct that Plaintiff may not seek penalties 22 as part of her claim for restitution. However, Plaintiff is not 23 seeking penalties under this cause of action. (Opp. to Motion, Dkt. 24 15.) Plaintiff’s complaint states that she is “entitled to 25 restitution of all of the wages earned and due to her, any other of 26 Defendant’s ill begotten gains, and injunctive relief prohibiting 27 Defendant from engaging in the unlawful, unfair, and fraudulent 28 payroll and advertising practices described herein. Plaintiff also 12 1 seeks interest on the amount of restitution awarded. Plaintiff also 2 seeks attorneys’ fees.” (Complaint ¶¶ 67-69.) None of this amounts 3 to Plaintiff seeking a “penalty.” Therefore, Defendants’ Motion is 4 DENIED as to Plaintiff’s Section 17200 claim. 5 6. Eleventh Cause of Action (Intentional Infliction of 6 Emotional Distress) 7 Defendants argue that Plaintiff fails to state a claim for 8 intentional infliction of emotional distress (“IIED”). Defendants 9 argue that there are two reasons why this claim should be 10 dismissed: (1) the claim is barred by the Workers’ Compensation 11 Act, and (2) Plaintiff has not alleged extreme and outrageous 12 conduct by Defendants. 13 Defendants’ first argument is unavailing. “It is true that 14 generally an employee can have no tort recovery for emotional 15 distress resulting from his employment... However, a plaintiff can 16 recover for infliction of emotional distress if he or she has a 17 tort cause of action for wrongful termination in violation of 18 public policy or wrongful termination in violation of an express 19 statute because then, emotional distress damages are simply a 20 component of compensatory damages.” Phillips v. Gemini Moving 21 Specialists, 63 Cal. App. 4th 563, 577 (1998). Plaintiff’s claims 22 that she was terminated because of her race and/or national origin 23 clearly allege a violation of public policy and a violation of 24 FEHA. Therefore, Plaintiff is not precluded by the Workers’ 25 Compensation Act from bringing her claim for IIED. 26 However, Plaintiff’s allegations are insufficient to rise to 27 the level of “extreme and outrageous conduct.” A claim for IIED 28 exists when there is “(1) extreme and outrageous conduct by the 13 1 defendant with the intention of causing, or reckless disregard of 2 the probability of causing, emotional distress; (2) the plaintiff's 3 suffering severe or extreme emotional distress; and (3) actual and 4 proximate causation of the emotional distress by the defendant's 5 outrageous conduct.” Hughes v. Pair, 46 Cal. 4th 1035, 1050 (2009). 6 While some of the comments that Plaintiff alleges were made by 7 Kindelan and others at Rio Hondo were inappropriate, they were not 8 so outrageous as to “exceed all bounds of that usually tolerated in 9 a civilized society.” Potter v. Firestone Tire & Rubber Co., 6 Cal. 10 4th 965, 1001 (1993). Further, the fact that Defendants terminated 11 Plaintiff is not extreme and outrageous conduct, even if the 12 motivation for her termination was racial animus. Therefore, 13 Defendants’ Motion is GRANTED as to Plaintiff’s IIED claim. 14 IV. Conclusion 15 For the reasons stated above, Defendants’ Motion to Dismiss is 16 GRANTED IN PART and DENIED IN PART. Should she so choose, Plaintiff 17 may amend her complaint consistent with this Order. 18 19 IT IS SO ORDERED. 20 21 22 Dated: October 9, 2013 DEAN D. PREGERSON United States District Judge 23 24 25 26 27 28 14
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