Tentative Ruling: David Barajas et al vs Rose Cafe Inc et al
Case Number
25CV06442
Case Type
Hearing Date / Time
Mon, 07/20/2026 - 10:00
Nature of Proceedings
Demurrer to SAC
Tentative Ruling
David Barajas, et al. v. Rose Cafe, Inc., et al.
Case No. 25CV06442
Hearing Date: July 20, 2026
HEARING: Demurrer to Second Amended Complaint
ATTORNEYS: For Plaintiffs David Barajas and Rosanna Barajas: Michael R. Trust, Michael Trust Law, APC, Nancy E. Gray, Gray & Associates, P.C.
For Defendants Rose Cafe, Inc., and Ralph E. Barajas: Melissa J. Fassett, Jeff F. Tchakarov, Cory T. Baker, Price, Postel & Parma LLP
TENTATIVE RULING:
The demurrer of defendants Rose Cafe, Inc., and Ralph E. Barajas to plaintiffs’ second amended complaint is sustained, in part as to the first cause of action for retaliation against defendant Ralph E. Barajas only, with leave to amend. Except as herein sustained, the demurrer is otherwise overruled. Plaintiffs shall file and serve their third amended complaint, if any, on or before July 31, 2026.
Background:
The second amended complaint (SAC) of plaintiffs David Barajas and Rosanna Barajas is the operative pleading in this case. As alleged in the SAC:
The Rose Cafe, Inc., (the Rose Cafe), which is located at 1816 Cliff Drive in the City of Santa Barbara, was founded, owned, and operated by Manuel and Socorro Barajas (the Barajas Owners). (SAC, ¶¶ 2, 14.) The Barajas Owners are the parents of David Barajas (David), Ralph E. Barajas (Ralph), and other children who helped to run the business, initially reporting to their parents. (SAC, ¶¶ 3, 14.) (Note: Due to common familial surnames, the court refers to the parties and other individuals by their first names to avoid confusion. No disrespect is intended.) Upon the death of the Barajas Owners, each child inherited a share of the Rose Cafe with Ralph, the eldest child, receiving a majority share. (SAC, ¶ 14.) Ralph eventually bought out the interests of each of his siblings. (SAC, ¶ 16.)
David was hired by the Rose Cafe as a kitchen cook in August 1981, and worked full time cooking, purchasing food inventory, and training.. (SAC, ¶¶ 15, 16.) In 2020, David was the last buyout with a repurchase option, and Ralph was the sole shareholder who exercised primary managerial responsibilities at the Rose Cafe. (SAC, ¶¶ 16, 17.)
In 2005, Rosanna Barajas (Rosanna) was hired by the Rose Cafe as a server. (SAC, ¶¶ 2, 18.) Rosanna is the granddaughter of the Barajas Owners; the daughter of David; the niece of Ralph; and the cousin of Angelique Barajas (Angelique) and Vanessa Arellano who were both employed at the Rose Cafe. (SAC, ¶ 18.) Rosanna worked full-time and part-time, initially serving, taking food orders, delivering orders to customers’ tables, and accepting payment and tips. (SAC, ¶ 19.) Rosanna was thereafter given management responsibilities by Ralph to improve the Rose Cafe’s finances, management, marketing, and operations. (Ibid.)
Throughout their employment, David and Rosanna (collectively, Plaintiffs) reported to Ralph and Brenda Simon (Simon), an agent of Ralph who consulted briefly at the Rose Cafe. (SAC, ¶ 20.) Ralph also delegated management responsibilities to Angelique, who is Ralph’s daughter and who acted as the Rose Cafe’s “General Manager”, “HR Manager”, and “Payroll Manager”. (SAC, ¶ 21.) Ralph, Angelique, and Simon were management decision makers with Ralph exercising final authority and signing or authorizing suspension and pay decisions. (SAC, ¶ 22.)
Plaintiffs were unable to take legally required meal and rest breaks because there was no coverage for both the kitchen and the customers, and David worked significant overtime for which he was uncompensated. (SAC, ¶¶ 23-25.) David also complained to Angelique and Simon about what was supposed to be a temporary Covid-related reduction in David’s pay, which was never retroactively paid or prospectively restored after the Covid-19 pandemic. (SAC, ¶ 26.)
In June 2023, as part of her expanded management duties, Rosanna notified the Rose Cafe about financial irregularities which included missing cash, improper cash handling by specific staff members, improper use of the company credit card, paying personnel in cash to circumvent legal obligations and court orders, and other payroll and wage and hour violations pertaining to Plaintiffs and other employees. (SAC, ¶ 27.)
On September 7, 2023, the Rose Cafe suspended Plaintiffs “effective immediately ... pending further investigation” and “under the authorization of the owner”, and barred Plaintiffs from the premises. (SAC, ¶ 29.) On September 20, 2023, Ralph issued “Formal Notice of Suspension Pay” letters, and Plaintiffs remained on reduced “suspension pay” for approximately 18 months, which was far less than Plaintiffs earned when working at the Rose Cafe. (SAC, ¶ 30.) The Rose Cafe failed to pay wages timely and required offsite paycheck pick-up during the suspension. (SAC, ¶ 31.)
On April 4, 2025, less than 30 days after their counsel sent Ralph a letter demanding reinstatement and rescission of a fraudulently induced buy-sell agreement and detailing a panoply of violations of law including retaliation and wage and hour complaints, Plaintiffs were terminated. (SAC, ¶ 32.) Plaintiffs’ final paychecks did not include all wages owed, including unpaid overtime and meal and rest period premiums. (SAC, ¶ 35.) Plaintiffs were also retaliated against for raising questions and concerns about the payment of their wages. (SAC, ¶ 36.)
The Rose Cafe offered shifting reasons for the termination, including some that were first disclosed post-termination. (SAC, ¶ 33.) The Rose Cafe and Ralph (collectively, Defendants) falsely alleged that Plaintiffs had engaged in unauthorized catering activities, improperly used the Rose Cafe’s name for their own benefit, misused the company credit card, improperly accessed the company bank account, and diverted orders from Rose Cafe to a business of which Defendants were aware and had approved. (SAC, ¶¶ 6, 34.) Other than one document related to a mutual altercation, Plaintiffs were unaware of any alleged concerns which were fabricated after the fact to justify the wrongful terminations of Plaintiffs. (SAC, ¶ 33.)
Plaintiffs filed their SAC against Defendants on March 27, 2026, asserting sixteen causes of action: (1) retaliation (Labor Code sections 98.6 and 1102.5); (2) wrongful termination in violation of public policy (against Rose Cafe only); (3) intentional infliction of emotional distress; (4) breach of oral contract; (5) misclassification as exempt employee (Labor Code section 515, subdivision (a); IWC Wage Order No. 5) (against Rose Cafe only); (6) failure to pay overtime wages (Labor Code sections 510 and 1194; IWC Wage Order No. 5) (against Rose Cafe only); (7) failure to authorize and permit rest breaks (Labor Code section 226.7; IWC Wage Order No. 5) (against Rose Cafe only); (8) failure to authorize and permit meal breaks (Labor Code section 512; IWC Wage Order No. 5) (against Rose Cafe only); (9) failure to provide one day’s rest in seven (Labor Code sections 551, 552, 558; IWC Wage Order 5) (against Rose Cafe only); (10) failure to pay wages owed in a timely manner (Labor Code sections 204 and 208) (against Rose Cafe only); (11) failure to timely pay final wages/waiting time penalties (Labor Code sections 201, 202, and 203) (against Rose Cafe only); (12) failure to provide accurate payroll records (wage statements) (Labor Code section 226, subdivisions (a) and (e), and section 226.3) (against Rose Cafe only); (13) failure to provide payroll records (Labor Code section 226, subdivisions (c), (f)) (against Rose Cafe only); (14) failure to provide personnel records (Labor Code section 1198.5) (against Rose Cafe only); (15) individual liability (Labor Code sections 558.1, 203, 226, subdivision (a), 226.7, 510, 512, and 1194) (against Ralph only); and (16) unfair business practices (Business and Professions Code section 17200).
On April 6, 2026, Defendants filed a demurrer to the first and fourth causes of action of the SAC. Plaintiffs have filed an opposition to the demurrer.
Analysis:
“In reviewing the sufficiency of a complaint against a general demurrer, we are guided by long-settled rules. ‘We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed.’ [Citation.] Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context.” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “If the complaint states a cause of action under any theory, regardless of the title under which the factual basis for relief is stated, that aspect of the complaint is good against a demurrer.” (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 38 (Quelimane).)
Demurrer to the first cause of action:
The demurrer to the first cause of action for retaliation is brought by Ralph and is made on the grounds that Labor Code section 1102.5 permits the employer only to be held liable for the wrongful conduct of its agents; that no liability attaches to an individual employee or agent; and that federal courts have held that Labor Code section 1102.5 does not support individual liability. For these reasons, the demurrer argues, the SAC fails to state facts sufficient to constitute a cause of action for retaliation under Labor Code section 1102.5 against Ralph. The demurrer further asserts that Labor Code section 98.6 contains the same language as section 1102.5, and is subject to the same interpretation.
In their opposition, Plaintiffs assert that Labor Code section 1102.5 does not restrict liability to employers, and that the federal authorities cited in the demurrer do not apply under the circumstances present here. Plaintiffs further contend that Ralph may be held liable under an alter ego theory of liability asserted in the SAC.
Relevant here, Labor Code section 1102.5 provides: “An employer, or any person acting on behalf of the employer, shall not retaliate against an employee for disclosing information …to a person with authority over the employee or another employee who has the authority to investigate, discover, or correct the violation or noncompliance ….” (Lab. Code, § 1102.5, subd. (b).) The demurrer presents no reasoned argument showing why the SAC fails to allege facts sufficient to show that Plaintiffs disclosed information to a person with authority over them.
The SAC expressly alleges that, at the time the events giving rise to the causes of action asserted in the SAC occurred, Ralph was the “sole shareholder” of the Rose Cafe and exercised managerial responsibilities. (SAC, ¶ 17.) “[A] corporation is regarded as a legal entity, separate and distinct from its stockholders, officers and directors, with separate and distinct liabilities and obligations.” (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538.) The parties do not dispute or effectively dispute that the phrase “any person acting on behalf of the employer” contained in Labor Code section 1102.5 is not clearly defined, and that no controlling decision has expressly determined whether that phrase imposes liability upon an employer only, or is intended to impose liability upon a sole shareholder or manager.
The court finds it helpful to consider the language of the implementing provisions of Labor Code section 1102.5, which must be examined “in the context of the statutory framework as a whole in order to determine its scope and purpose and to harmonize the various parts of the enactment….” (People v. Porter (2025) 111 Cal.App.5th 927, 934-935.)
Though Labor Code section 1102.5 prohibits retaliation against an employee by “any person acting on behalf of the employer”, the statute provides that the “employer is liable for a civil penalty … for each violation of this section to be awarded to the employee who was retaliated against.” (Lab. Code, § 1102.5, subd. (f)(1).) This unambiguous language suggests that, notwithstanding whether an individual shareholder or manager acts on behalf of the employer, only the employer may be held liable for civil penalties for any violation of Labor Code section 1102.5 by that shareholder or manager. (See People v. Snook (1997) 16 Cal.4th 1210, 1215 [“[i]f there is no ambiguity in the language, we presume the Legislature meant what it said....”].)
Further, Labor Code section 1105 provides that “[n]othing in this chapter shall prevent the injured employee from recovering damages from his employer for injury suffered through a violation of this chapter.” (Lab. Code, § 1105.) The plain language of that section also suggests that only the employer is liable for damages arising from any purported retaliation by an individual shareholder or manager in violation of Labor Code section 1102.5.
Moreover, absent allegations showing that Ralph committed an independent tort, the interpretation of Labor Code section 1102.5 further discussed above comports with the principle that “[t]he supervisor, when taking retaliatory action against the employee, is necessarily exercising authority the employer conferred on the supervisor, and it is only that authority that makes the supervisor’s action injurious, not the action in itself.” (Miklosy v. Regents of University of California (2008) 44 Cal.4th 876, 901, fn. 8, original italics, superseded by statute on other grounds as stated in Taswell v. Regents of University of California (2018) 23 Cal.App.5th 343, 358 [also noting that “in a retaliation case, it is the employer’s adverse employment action that constitutes the substance of the tort, and the supervisor’s action merges with that of the employer.”].)
In addition, Labor Code section 1102.6, which “provides the governing framework for the presentation and evaluation of whistleblower retaliation claims brought under section 1102.5” (Lawson v. PPG Architectural Finishes, Inc. (2022) 12 Cal.5th 703, 718 (Lawson)), states that “once it has been demonstrated by a preponderance of the evidence that an activity proscribed by [s]ection 1102.5 was a contributing factor in the alleged prohibited action against the employee, the employer shall have the burden of proof to demonstrate by clear and convincing evidence that the alleged action would have occurred for legitimate, independent reasons even if the employee had not engaged in activities protected by Section 1102.5[]” (Lab. Code, § 1102.6). That section does not, by its plain language, place any burden of proof on an individual shareholder or manager “to demonstrate, by clear and convincing evidence, that it would have taken the action in question for legitimate, independent reasons even had the plaintiff not engaged in protected activity.” (Lawson, supra, 12 Cal.5th at p. 718.)
The parties do not cite, and the court is unaware of, any published California decision discussing or addressing whether an individual may be held liable for their own violations of Labor Code section 1102.5. “[M]ost district courts that have addressed the issue have held that section 1102.5 does not impose individual liability on supervisors.” (Mewawalla v. Middleman (N.D. Cal. 2022) 601 F.Supp.3d 574, 608.) For example, district courts have determined that “the alleged violations under Section 1102.5 are predicated upon an employer/employee relationship … [and] [t]he relevant portions of the statute clearly indicate that the statute is meant to establish prohibited activity by employers, rather than individuals.” (Vierria v. California Highway Patrol (E.D. Cal. 2009) 644 F.Supp.2d 1219, 1244.)
Another district court concluded: “The language of the statute on which plaintiff relies does not include clear language imposing individual liability, but rather uses the kind of language consistently associated with imposition of liability on an employer alone.” (Tillery v. Lollis (E.D. Cal., Aug. 13, 2015) 2015 WL 4873111, at *10; see also Vera v. Con-way Freight, Inc. (C.D. Cal., Apr. 6, 2015) 2015 WL 1546178, at *1 [“The statutory text, structure, and legislative history all indicate that only employers—not individual employees—are liable for violations of the statute.”]; Conner v. Aviation Serv. of Chevron U.S.A. (N.D. Cal. Nov. 5, 2014) 2014 WL 5768727, at *5 [“Plaintiffs have failed to point to any authority that establishes that individual liability exists for violations of Section 1102.5 ….”].)
The court also notes that, as to retaliation claims under the California Fair Employment and Housing Act or “FEHA”, an “employer is liable for retaliation under section 12940, subdivision (h), but nonemployer individuals are not personally liable for their role in that retaliation.” (Jones v. Lodge at Torrey Pines P’ship (2008) 42 Cal.4th 1158, 1173.) Similarly, in Reno v. Baird (1998) 18 Cal.4th 640 (Reno), the court concluded “that the FEHA, like similar federal statutes, allows persons to sue and hold liable their employers, but not individuals.” (Reno, supra, 18 Cal.4th at p. 643 [also stating that “[o]ur conclusion also applies to common law actions for wrongful discharge.”].)
In their opposition, Plaintiffs argue that certain statutory amendments demonstrate that the term “employer” includes those acting on behalf of that employer.
When evaluating a statutory amendment, the court “must explore whether the amendment changed or merely clarified existing law.” (Carter v. California Dep’t of Veterans Affairs (2006) 38 Cal.4th 914, 922.) “While an intention to change the law is usually inferred from a material change in the language of the statute, a consideration of the surrounding circumstances may indicate, on the other hand, that the amendment was merely the result of a legislative attempt to clarify the true meaning of the statute.” (Dep’t of Corr. & Rehab. v. Workers' Comp. Appeals Bd. (2008) 166 Cal.App.4th 911, 917-18.)
While statutory provisions addressing criminal penalties were amended in 2013 to include liability for “[a]n employer or any other person or entity,” Labor Code sections 1105 and 1102.6 were not similarly amended. (See, e.g., Lab. Code, §§ 1102.6, 1103, & 1105.) Instead, those statutes discuss civil liability of the employer, but not an individual acting on behalf of the employer. (See Lab. Code, §§ 1102.5, subd. (f)(1),1102.6, 1105.) Further, “the plain language of [section] 1102.5 and the legislative history of the 2013 amendment do not demonstrate an expansion of liability to permit whistleblowers to seek money damages from non-employers. To the contrary, the legislature’s decision not to amend [section] 1105 to allow recovery of damages from anyone other than employers forecloses Plaintiff[s’] theory, particularly when the legislature did amend [section] 1103 to impose criminal liability on non-employer individuals.” (Dawson v. Caregard Warranty Service, Inc. (C.D. Cal., Jan. 12, 2024) 2024 WL 661198, at *6.)
Plaintiffs also contend that the SAC is sufficient to show that Ralph directly authorized and participated in tortious conduct for purposes of Labor Code section 1102.5, and that Ralph may be held personally liable under California’s general tort participation doctrine.
Even if the court were to assume without deciding that the SAC alleges facts which show, expressly or by inference, that Ralph is a corporate officer of the Rose Cafe who “personally directed or participated in ... tortious conduct[]” (Frances T. v. Village Green Owners Assn. (1986) 42 Cal.3d 490, 504; see also SAC, ¶ 3), Plaintiffs fail to explain why the first cause of action asserts a claim for tort damages apart from any purported violation of Labor Code section 1102.5. (See, e.g., Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, 177–178 [general discussion]; Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 668-669 [same]; Johnson v. Honeywell Internat. Inc. (2009) 179 Cal.App.4th 549, 558 [discussing “doctrine of negligence per se” under which “the plaintiff ‘borrows’ statutes to prove duty of care and standard of care.”].)
Furthermore, to the extent the SAC is sufficient to show why Ralph may be held individually liable as an alter ego of the Rose Cafe, which the reply of Ralph expressly declines to address (see reply at p. 4, ll. 21-22), Plaintiffs cite no supporting legal authority for that contention. Further, “[a] determination that a person is the alter ego of a corporation does not make the alter ego an employer. Rather it makes the alter ego liable for the obligations of the corporation.” (Leek v. Cooper (2011) 194 Cal.App.4th 399, 409 (Leek).) For these and all further reasons discussed above, and notwithstanding whether the SAC alleges facts sufficient to show that Ralph is the alter ego of Rose Cafe (and the court presently makes no findings in this regard), Plaintiffs fail to explain why the SAC is also sufficient to show that Ralph is an “employer” for purposes of Labor Code section 1102.5.
For all reasons discussed above, the court concludes that Labor Code section 1102.5 does not authorize a civil action against Ralph, individually, under the circumstances alleged in the SAC. Therefore, the court will sustain the demurrer to the first cause of action for retaliation under Labor Code section 1102.5 in part, as against Ralph only.
The first cause of action as against Ralph also asserts a purported violation of Labor Code section 98.6. That statute provides: “An employer, or a person acting on behalf of the employer, shall not retaliate against an employee because the employee is a family member of a person who has, or is perceived to have, engaged in any conduct delineated in this chapter.” (Lab. Code, § 98.6, subd. (e).)
The same reasoning and analysis apply. For all reasons discussed above, the court will also sustain the demurrer, in part as to the first cause of action for retaliation under Labor Code sections 98.6 as against Ralph, only.
Court records reflect, and the demurrer does not dispute, that Plaintiffs filed their original complaint on October 10, 2025; that Plaintiffs filed a first amended complaint on February 19, 2026, without any answer to the original complaint having been filed; and that the SAC was filed pursuant to a stipulation of the parties and with leave of court. (Demurrer at p. 8; see also Mar. 23, 2026, Stipulation & Order re filing SAC.) For these reasons, the SAC is effectively an original pleading which does not “show[] on its face that it is incapable of amendment....” (King v. Mortimer (1948) 83 Cal.App.2d 153, 158.) For these reasons, the court will grant Plaintiffs leave to amend. (Eghtesad v. State Farm General Ins. Co. (2020) 51 Cal.App.5th 406, 411.)
Demurrer to the fourth cause of action:
In the fourth cause of action of the SAC, David asserts a claim against Defendants for breach of an oral contract. Relevant here, the SAC alleges that Defendants, through their authorized agents and managers, orally represented to David that wage deductions, including reductions of $500 per pay period, made during the Covid-19 pandemic would be repaid in full, and that David’s wages would be restored prospectively, once business conditions improved; that Defendants knew, or reasonably should have known, that David would rely on those representations to his detriment in deciding to continue performing work for Defendants; that in reliance on those representations, David continued to perform his complete work duties, including overtime and other labor; that business conditions improved following the Covid-19 restrictions; and that Defendants accepted the benefits of David’s continued labor, but failed and refused to fulfill their representations, including repayment of the deducted wages and full lawful compensation for all work performed. (SAC, ¶¶ 61-64.)
The SAC further alleges that “[e]ach payroll period without full pay represents a new and discrete contractual breach[]”, and that as a result of Defendants’ conduct, David has suffered damages in the amount of unpaid wages, unreimbursed deductions, underpayment to public benefit accounts, and other withheld compensation. (SAC, ¶¶ 66-67.)
In the demurrer, Defendants contend that the fourth cause of action is uncertain. “‘[U]ncertain’ includes ambiguous and unintelligible.” (Smith v. Kern County Land Co. (1958) 51 Cal.2d 205, 209; Code Civ. Proc., § 430.10, subd. (f).) “A special demurrer on the ground that [a pleading] is (a) ambiguous, (b) unintelligible, or (c) uncertain is insufficient unless the demurrer points out specifically wherein the pleading is ambiguous, uncertain or unintelligible.” (Coons v. Thompson (1946) 75 Cal.App.2d 687, 690.)
For present purposes, the court deems the allegations described above as true notwithstanding whether plaintiff can prove them. (Berg & Berg Enterprises, LLC v. Boyle (2009) 178 Cal.App.4th 1020, 1034.) It can be inferred from those allegations that Defendants necessarily possess knowledge of the purported representations or promises made to David during the Covid-19 pandemic in regard to any alleged wage deductions, and whether or when those deductions would be repaid or restored. (See Quelimane, supra, 19 Cal.4th at p. 47.) For these reasons, the demurrer fails to show why the fourth cause of action alleged in the SAC is so incomprehensible that Defendants cannot reasonably respond. (Morris v. JPMorgan Chase Bank, N.A. (2022) 78 Cal.App.5th 279, 292.)
Furthermore, the demurrer sets forth the allegations which Defendants contend give rise to the fourth cause of action, including as to the essential elements of an oral contract. This indicates or suggests to the court that the SAC is not so unintelligible or ambiguous that Defendants cannot understand the issues or the nature of the claim alleged by David. (Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240, 245 [“a plaintiff is required only to set forth the essential facts of his case with reasonable precision and with particularity sufficient to acquaint a defendant with the nature, source and extent of his cause of action”].)
For all reasons discussed above, as the demurrer fails to show why the fourth cause of action asserted in the SAC is ambiguous, uncertain, or unintelligible, the court will overrule the special demurrer of Defendants as to that cause of action.
The demurrer further asserts that the fourth cause of action is barred by the applicable statute of limitations; fails to plead a viable oral contract; fails to show that David gave any consideration for the purported promises; and fails to set forth any basis upon which Ralph could be held personally liable for any promises made by the Rose Cafe. For these reasons, Defendants contend, the SAC fails to state facts sufficient to constitute a cause of action for breach of oral contract.
“A demurrer based on a statute of limitations will not lie where the action may be, but is not necessarily, barred. [Citation.] In order for the bar of the statute of limitations to be raised by demurrer, the defect must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint shows that the action may be barred.” (Marshall v. Gibson, Dunn & Crutcher (1995) 37 Cal.App.4th 1397, 1403.) “If the dates establishing the running of the statute of limitations do not clearly appear in the complaint, there is no ground for general demurrer. The proper remedy ‘is to ascertain the factual basis of the contention through discovery and, if necessary, file a motion for summary judgment ….’ [Citation.]” (Roman v. County of Los Angeles (2000) 85 Cal.App.4th 316, 324-325, italics omitted.)
An action on a contract “not founded upon an instrument of writing...” is subject to a two-year statute of limitations. (Code Civ. Proc., § 339, subd. (1).) “The statute of limitations for a breach of contract claim begins to run at the time of breach (that is, when one party fails to perform as contractually required).” (Piedmont Capital Management, LLC v. McElfish (2023) 94 Cal.App.5th 961, 964 (Piedmont).) Though the SAC alleges that business conditions improved following the Covid-19 restrictions, there are no allegations which show, expressly or by inference, the date on which those conditions improved. The SAC also does not allege a date on which Defendants were required to repay or restore David’s wages or wage deductions.
It can also be inferred from the allegations of the SAC including those described above, that the purported failure by Defendants to repay or restore to David their deducted wages continued during each payroll period after the business conditions improved. For these and all further reasons discussed above, the SAC does not allege, on its face, the date on which Defendants were contractually required but failed to perform based on the purported representations made to David. (Bendien v. Solov (1949) 89 Cal.App.2d 904, 907-908 [statute of limitations did not bar cause of action based on date plaintiffs were entitled to performance under an alleged oral agreement].)
The demurrer also fails to explain why the allegations of the SAC fix the time within which Defendants were required to perform following the improvement of business conditions after the Covid-19 pandemic. (See Langdon v. Langdon (1941) 47 Cal.App.2d 28, 31 [general discussion].) For these and all further reasons discussed above, the bar of the statute of limitations asserted in the demurrer does not clearly and affirmatively appear on the face of the SAC.
Though the demurrer generally asserts, in a conclusory fashion, that an alleged oral contract with vague and uncertain terms is not binding, or that discussions about possible future payment do not constitute a binding contract, the demurrer fails to present reasoned factual or legal argument explaining why the SAC does not allege facts sufficient to show the existence of a contract or agreement to repay or restore David’s wages, David’s performance by continuing to perform work duties in reliance on that agreement, a failure by Defendants to repay or restore deducted wages or full compensation, or damages. (Aton Center, Inc. v. United Healthcare Ins. Co. (2023) 93 Cal.App.5th 1214, 1230 [setting forth elements of a breach of oral contract].)
In addition, “[c]onsideration is present when the promisee confers a benefit or suffers a prejudice.” (Property California SCJLW One Corp. v. Leamy (2018) 25 Cal.App.5th 1155, 1165.) The allegations of the SAC described above are also sufficient to show that David conferred a benefit on Defendants by continuing to perform work duties for reduced wages in reliance on the purported representation by Defendants that their wage reductions would be repaid, and that David suffered prejudice as a result of the purported failure of Defendants to repay David’s wages or to reimburse the alleged deductions, among other things.
The court further notes that “ ‘ “[a]n implied contract ‘ “... in no less degree than an express contract, must be founded upon an ascertained agreement of the parties to perform it, the substantial difference between the two being the mere mode of proof by which they are to be respectively established.” ’[Citation.] ... Although an implied in fact contract may be inferred from the ‘conduct, situation or mutual relation of the parties, the very heart of this kind of agreement is an intent to promise.’ [Citation.]” [Citations.]’ ” (Gorlach v. Sports Club Co. (2012) 209 Cal.App.4th 1497, 1507-1508.) Wholly absent from the demurrer is any reasoned argument addressing whether the SAC fails to allege any facts sufficient to show an implied contract for the repayment of wage deductions in exchange for David continuing to perform work duties during the Covid-19 pandemic, notwithstanding “the title under which the factual basis for relief is stated....” (Quelimane, supra, 19 Cal.4th at p. 38.)
In regard to the issue of whether Ralph may be bound by any contract allegedly entered into between David and the Rose Cafe, or be held personally liable under any such alleged contract, “alter ego is an equitable doctrine that also extends a corporation’s liability on a cause of action to another corporation or individual when the doctrine’s requirements are met. [Citation.] It is well settled a breach of contract claim based on an alter ego theory is still a claim on the contract....” (Brown Bark III, L.P. v. Haver (2013) 219 Cal.App.4th 809, 823 & fn. 6.) The demurrer does not discuss or address the sufficiency of allegations purporting to show that Defendants “acted as the alter egos of the other.” (See, e.g., SAC, ¶¶ 8-13.)
For example, absent from the demurrer is any reasoned factual or legal argument showing why the SAC fails to allege “sufficient facts to show a unity of interest and ownership, and an unjust result if the corporation is treated as the sole actor.” (Leek, supra, 194 Cal.App.4th at p. 415.) In addition, and as noted above, Defendants’ reply states that “Plaintiffs’ claim for alter ego lability is also not addressed by this demurrer and will succeed or fail on its merits.” (Reply at p. 4, ll. 21-22.) For these reasons, the demurrer fails to show why the SAC does not allege facts sufficient to constitute a claim on the purported oral contract as against Ralph.
For all reasons discussed above, the court will overrule the demurrer to the fourth cause of action for breach of oral contract on the grounds stated.
Defendants’ request for judicial notice:
In support of their demurrer, Defendants have filed a request for judicial notice of an order entered in Santa Barbara Superior Court case no. 24CV04342 entitled Elizabeth Willson vs. Pietro Bernardi, et al.; and an order entered in Santa Barbara Superior Court case no. 18CV05728 entitled Mark Signa, et al. v. The Regents of the University of California, et al. (collectively, the Orders). (RJN, ¶¶ 1-2 & exhibits A, B.)
Even if the unrelated cases in which the Orders were entered involve the same issue in regard to whether a retaliation claim may be brought against an individual actor or supervisor, “a written trial court ruling has no precedential value. [Citation.]” (Santa Ana Hospital Medical Center v. Belshe (1997) 56 Cal.App.4th 819, 831.) Further, “[a] trial court judgment cannot properly be cited in support of a legal argument, absent exceptions not applicable here.” (San Diego County Employees Retirement Assn. v. County of San Diego (2007) 151 Cal.App.4th 1163, 1184.) For these reasons, the isolated rulings set forth in the Orders have no precedential value and are not citable authority. The court, therefore, does not consider those Orders in its analysis.
Defendants also request judicial notice of Executive Order N-28-20 (the Executive Order) regarding the existence of a State of Emergency in California as a result of the threat of Covid-19 and further efforts to control the spread of the virus. (RJN, ¶ 3 & exhibit C.) Defendants contend that the Executive Order shows the date the Covid-19 pandemic took effect in 2020. (Memorandum at p. 17.) Considering that the statute of limitations for a breach of contract claim begins to run at the time of breach (Piedmont, supra, 94 Cal.App.5th at p. 964), Defendants fail to explain the relevance of the Executive Order, or the date the Covid-19 pandemic took effect, to the issue of whether the fourth cause of action for breach of contract is barred. For these and all further reasons discussed above, the court will deny Defendants’ request for judicial notice of the Orders and the Executive Order. (Evid. Code, § 350; Mangini v. R. J. Reynolds Tobacco Co. (1994) 7 Cal.4th 1057, 1063, overruled on other grounds in In re Tobacco Cases II (2007) 41 Cal.4th 1257, 1276.)