Goonewardene v. ADP, LLC

5 Cal.App.5th 154

209 Cal.Rptr.3d 722

Sharmalee GOONEWARDENE, Plaintiff and Appellant,

v.ADP, LLC et al., Defendants and Respondents.

B267010

Court of Appeal, Second District, Division 4, California.

Filed November 4, 2016

As Modified on Denial of Rehearing November 29, 2016

Glen Broemer, Oxnard, for Plaintiff and Appellants.

Morgan Lewis & Bockius, Robert A. Lewis, Thomas M. Peterson and Zachary Hill for Defendants and Respondents.

MANELLA, J.

In the underlying action, appellant Sharmalee Goonewardene's fifth amended complaint asserted claims against respondents ADP, LLC, ADP Payroll Services, Inc. and AD Processing, LLC for wrongful termination, violations of the Labor Code, and related causes of action, including breach of contract, negligent misrepresentation, and negligence. The trial court sustained respondents' demurrers relating to the fifth amended complaint without leave to amend. Appellant contends the court abused its discretion in denying her leave to amend, arguing that her proposed sixth amended complaint states claims against respondents. We conclude that the proposed complaint states claims against respondents only for breach of contract, negligent misrepresentation, and negligence. We therefore affirm the trial court's ruling in part, reverse it in part, and remand with instructions to permit appellant to file a complaint against respondents asserting those claims.

RELEVANT FACTUAL AND PROCEDURAL BACKGROUND

In April 2012, appellant commenced the underlying action. Her initial complaints named as defendants a California corporation and New York corporation bearing the same name—Altour International Inc.—and Alexandre Chemla, who was alleged to be the corporations' alter ego (collectively, Altour). The complaints asserted claims for wrongful termination, breach of contract, violations of the Labor Code, and related causes of action predicated on allegations that appellant was employed by Altour, which failed to compensate her in accordance with the Labor Code and wrongfully terminated her when she brought that misconduct to its attention.

In March 2015, appellant filed her fourth amended complaint (4AC), which, in addition to the claims previously alleged against Altour, included a single cause of action against respondent ADP, LLC, namely, a claim for unfair business practices under the unfair competition law (UCL; Bus. & Prof. Code, § 17200 et seq. ). In connection with that claim, the complaint alleged that ADP, LLC, failed to provide appellant with adequate documentation and records regarding her compensation.

After ADP, LLC, demurred to the 4AC, appellant informed the trial court that she wished to assert additional claims against ADP, LLC. The trial court deferred ruling on the demurrer to permit appellant to submit a motion for leave to file the fifth amended complaint (5AC), which contained claims against all three respondents for wrongful termination, violations of the Labor Code and federal labor laws, breach of contract, unfair business practices, false advertising, negligence, and negligent misrepresentation. The 5AC alleged that respondents entered into a contract with Altour to provide payroll services relating to Altour's employees. Several claims in the 5AC also effectively asserted or alleged that all respondents acted as appellant's employer.

In ruling on the pending demurrer to the 4AC and the motion for leave to file the 5AC, the trial court sustained the demurrer to all claims founded on the assumption that ADP, LLC was appellant's employer, co-employer, or joint employer. The court denied appellant leave to amend with respect to those claims, and ordered them dismissed with prejudice. The court otherwise permitted appellant to file the 5AC, on the condition that appellant assert only the remaining claims against respondents.

The 5AC nevertheless contained claims predicated on the assumption that ADP Payroll Services Processing, Inc. and AD Processing, LLC were appellant's employers. Respondents demurred to the 5AC, contending the employer-based claims were defective, and the remaining claims against respondents were untenable. The trial court sustained the demurrer without leave to amend, and asked respondents to prepare the final order reflecting its ruling.

While that order was pending, appellant submitted a motion for reconsideration and a proposed sixth amended complaint (6AC), which materially resembles the 5AC, as originally proposed. The 6AC contains claims similar to those in the original 5AC—including the claims relying on the theory that respondents were appellant's employers—with additional factual allegations. The motion for reconsideration requested leave to file the 6AC. On August 5, 2015, without expressly denying the motion for reconsideration, the trial court entered a final order sustaining respondents' demurrer to the 5AC without leave to amend, and a judgment of dismissal in favor of respondents. This appeal followed.

DISCUSSION

Appellant contends the trial court erred in sustaining respondents' demurrer to the 5AC without leave to amend. As explained below, we agree with the trial court that the majority of appellant's claims must be dismissed. However, we conclude the proposed 6AC adequately pleads claims for breach of contract, negligent misrepresentation, and negligence based on allegations that respondents performed payroll services for appellant's benefit in an inaccurate and negligent manner.

A. Standard of Review

“Because a demurrer both tests the legal sufficiency of the complaint and involves the trial court's discretion, an appellate court employs two separate standards of review on appeal. [Citation.] ... Appellate courts first review the complaint de novo to determine whether or not the ... complaint alleges facts sufficient to state a cause of action under any legal theory, [citation], or in other words, to determine whether or not the trial court erroneously sustained the demurrer as a matter of law. [Citation.]” (Cantu v. Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 879, 6 Cal.Rptr.2d 151, fn. omitted (Cantu ).) We do not assess the credibility of the allegations, as “ ‘it is wholly beyond the scope of the inquiry to ascertain whether the facts stated are true or untrue.’ ” (Garton v. Title Ins. & Trust Co. (1980) 106 Cal.App.3d 365, 375, 165 Cal.Rptr. 449 quoting Colm v. Francis (1916) 30 Cal.App. 742, 752, 159 P. 237.)

“Second, if a trial court sustains a demurrer without leave to amend, appellate courts determine whether or not the plaintiff could amend the complaint to state a cause of action. [Citation.]” (Cantu, supra, 4 Cal.App.4th at p. 879, fn. 9, 6 Cal.Rptr.2d 151.) To establish an abuse of discretion regarding the denial of leave to amend, “a plaintiff may propose new facts or theories to show the complaint can be amended to state a cause of action....” (Connerly v. State of California (2014) 229 Cal.App.4th 457, 460, 177 Cal.Rptr.3d 304.)

That showing may be made by way of a motion for reconsideration. (Mogilefsky v. Superior Court (1993) 20 Cal.App.4th 1409, 1418, 26 Cal.Rptr.2d 116.) Furthermore, the “showing need not be made in the trial court so long as it is made to the reviewing court.” (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1386, 272 Cal.Rptr. 387 (Careau & Co .).)

B. Scope of Review

At the outset, we examine the scope of our review of the ruling on the 5AC. The trial court's grant of respondents' demurrer to the 5AC without leave to amend effectively barred appellant from filing the 6AC. Thus, our review examines whether the trial court erred in denying leave to amend the 5AC.

Although appellant's opening brief seeks a reversal of the trial court's rulings “as to every cause of action,” she does not, in fact, attack the portion of those rulings sustaining the demurrers to the 5AC. Her brief contains no argument (supported by legal authority and citations to the record) aimed at showing any claim in the 5AC is tenable.¹ Rather, appellant's focus is on whether the trial court erred in denying leave to amend. In this regard, she argues that the trial court improperly declined to grant her motion for reconsideration, urges us to evaluate the allegations in the 6AC, and contends those allegations state causes of action. Accordingly, appellant has forfeited her challenge to the rulings on the 5AC, insofar as the court sustained demurrers to the claims in that complaint. (Rossberg v. Bank of America, N.A. (2013) 219 Cal.App.4th 1481, 1504, 162 Cal.Rptr.3d 525 ; see Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784, 79 Cal.Rptr.2d 273.)

The remaining issue is whether appellant may challenge the denial of leave to amend on appeal, as the record reflects no oral request for leave to amend at the hearing on the demurrer to the 5AC, and shows only that appellant sought to file the 6AC by means of a motion for reconsideration submitted while the final ruling on the demurrer to the 5AC was pending. In Careau & Co. , the plaintiffs in two consolidated actions filed first amended complaints, to which the defendants demurred. (Careau & Co. , supra , 222 Cal.App.3d at p. 1379, 272 Cal.Rptr. 387.) After the trial court sustained the demurrers without leave to amend, the plaintiffs filed motions for reconsideration of the denial of leave to amend, accompanied by proposed second amended complaints. (Id . at pp. 1379–1380, 272 Cal.Rptr. 387.) The trial court denied reconsideration, filed orders stating the grounds for the demurrers, and later entered judgments in favor of the defendants. (Id . at pp. 1380–1381, 272 Cal.Rptr. 387.) Although the record reflected no request for leave to amend at the hearing on the demurrers, the appellate court concluded that in view of the reconsideration motions, it was appropriate to examine whether the second amended complaints stated causes of action. (Id . at pp. 1386–1387, 272 Cal.Rptr. 387.)

We reach the same conclusion here and, accordingly, examine the 6AC in...