Vasquez v. Franklin Mgmt. Real Estate Fund, Inc.

• Decision Date: 03 December 2013
• Docket Number: B245735
• Citation: 166 Cal.Rptr.3d 242,222 Cal.App.4th 819
• Court: California Court of Appeals Court of Appeals
• Parties: Jorge L. VASQUEZ, Plaintiff and Appellant, v. FRANKLIN MANAGEMENT REAL ESTATE FUND, INC., Defendant and Respondent.

222 Cal.App.4th 819

166 Cal.Rptr.3d 242

Jorge L. VASQUEZ, Plaintiff and Appellant,

v.FRANKLIN MANAGEMENT REAL ESTATE FUND, INC., Defendant and Respondent.

B245735

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

Filed December 3, 2013

See 3 Witkin, Summary of Cal. Law (10th ed. 2005) Agency and Employment, § 122 et seq.

APPEAL from a judgment of the Superior Court of Los Angeles, Malcolm Mackey, Judge. Reversed and remanded. (Los Angeles County Super. Ct. No. BC449064)

Employment Lawyers Group, Karl Gerber and Ann Guleser, Sherman Oaks, for Plaintiff and Appellant.

Kimball, Tirey & St. John, Karl P. Schlecht and Michaelene H. Kapson, Irvine, for Defendant and Respondent.

MANELLA, J.

Appellant Jorge L. Vasquez contends the trial court abused its discretion in sustaining respondent Franklin Management Real Estate Fund, Inc.'s demurrers to appellant's claims for constructive discharge in violation of public policy and intentional infliction of emotional distress. The trial court found appellant's allegation that respondent violated the Labor Code by assigning appellant tasks that required extensive use of his vehicle and refusing to reimburse him for mileage did not support either claim. The issue presented is whether the facts alleged supported claims for constructive discharge in violation of public policy or intentional infliction of emotional distress, or could be amended based on factual contentions made by appellant to state such causes of action. We agree with the trial court that appellant did not assert facts sufficient to support the intentional infliction of emotional distress claim. However, we conclude appellant should have been permitted leave to amend his claim of constructive discharge in violation of public policy and therefore reverse the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

A. Original Complaint and Demurrer

Respondent employed appellant as a maintenance technician from May 2009 until August 2010. In November 2010, appellant brought suit against respondent. The complaint alleged that during appellant's term of employment, respondent paid him a wage of $10 per hour for a 40–hour week. After the first month, appellant's supervisors began instructing him to drive his own truck for work-related errands, such as going to the hardware store to buy items needed for apartments owned or managed by respondent. Appellant estimated that he thereafter drove a minimum of 30 miles per day running errands related to his employment. According to the complaint, appellant told his supervisors nearly every week that he could not afford to pay for the gasoline and vehicle maintenance, and he requested reimbursement. Despite his repeated requests, his supervisors continued to assign him tasks that required many miles of driving and consistently informed him he would not be reimbursed.

In August 2010, appellant informed a new supervisor that he could not afford to maintain his vehicle due to using his money to purchase gasoline for work-related errands. Appellant told the new supervisor he could not “tolerate the work environment of only being paid $10.00 per hour, not being paid for gas and having to drive around town for work without being reimbursed for mileage.” When respondent continued to refuse to reimburse for mileage, appellant had “no choice but to resign.” Based on these allegations, appellant brought suit for violation of Labor Code section 2802.¹ He also asserted claims for constructive wrongful termination in violation of public policy and intentional infliction of emotional distress.² According to the complaint, the public policy respondent allegedly violated was embodied in Labor Code sections 2802 and California's unfair competition law ( Bus. & Prof.Code, § 17200, et seq.).³

Respondent demurred to the claims for constructive discharge and intentional infliction of emotional distress. Respondent contended that failure to reimburse for mileage was not sufficiently intolerable or aggravated to support a claim of constructive discharge. Respondent further contended that appellant failed to allege sufficiently outrageous and extreme conduct to support a claim for intentional infliction of emotional distress.

The trial court sustained the demurrer with leave to amend the claim for constructive discharge and without leave to amend the claim for intentional infliction of emotional distress. The court found that the complaint failed to allege facts sufficient to constitute a constructive discharge and failed to allege any outrageous conduct on the part of respondent.

B. FAC and Demurrer

Appellant filed a first amended complaint (FAC), adding more detail to the allegations of the original complaint. The FAC alleged that appellant should have been reimbursed $330 per month based on driving 30 miles each workday and the standard mileage rate of 55 cents per mile, and that this represented a significant percentage of his $1,600 monthly salary. Appellant contended that the failure to reimburse him for mileage resulted in his salary of $10 per hour being effectively reduced to less than the minimum wage.⁴ However, in asserting his claim for constructive discharge in violation of public policy, appellant did not invoke the minimum wage statutes or claim that the public policy embodied in California's minimum wage laws had been violated.

Respondent again demurred to the constructive discharge claim, contending that the facts alleged did not demonstrate that appellant had been constructively discharged. In his opposition, appellant asserted that the facts alleged showed that the amount he was forced to spend on gasoline and vehicle maintenance left him with insufficient money to sustain himself, thus making his working conditions intolerable. Specifically, he calculated that the amount of unreimbursed expenses left him earning less than the minimum wage. ⁵

The court sustained the demurrer without leave to amend. The court found that “failing to pay mileage expenses of $15/day is not conduct that is so intolerable or aggravated that a reasonable person in the employee's position would have felt no choice but to resign.” It therefore appeared from the facts alleged that appellant's decision to quit was “not a forced or coerced decision.” ⁶

Following settlement of his mileage reimbursement claim, appellant dismissed the remaining causes of action with prejudice and filed this appeal.

DISCUSSION

A. Standard of Review

When a demurrer is sustained without leave to amend, an appellate court “first review[s] the complaint de novo to determine whether the complaint alleges facts sufficient to state a cause of action under any legal theory or to determine whether the trial court erroneously sustained the demurrer as a matter of law.” (Aguilera v. Heiman (2009) 174 Cal.App.4th 590, 595, 95 Cal.Rptr.3d 18.) “Second, we determine whether the trial court abused its discretion by sustaining the demurrer without leave to amend.” (Ibid.) We will conclude that the trial court abused its discretion by denying leave to amend if there is a reasonable probability that the complaint could have been amended to cure its defects. (Barroso v. Ocwen Loan Servicing, LLC (2012) 208 Cal.App.4th 1001, 1008, 146 Cal.Rptr.3d 90.) “[T]he burden is on the plaintiff to show in what manner the complaint can be amended and how such an amendment would cure the defect.” (Gould v. Maryland Sound Industries, Inc. (1995) 31 Cal.App.4th 1137, 1153, 37 Cal.Rptr.2d 718 (Gould).)

B. Constructive Discharge

There is no dispute that “employees discharged in violation of fundamental public policy may bring an action against their employer sounding in tort.” (Gantt v. Sentry Insurance (1992) 1 Cal.4th 1083, 1098, 4 Cal.Rptr.2d 874, 824 P.2d 680 (Gantt) overruled in part on another point in Green v. Ralee Engineering Co. (1998) 19 Cal.4th 66, 78 Cal.Rptr.2d 16, 960 P.2d 1046.) “[T]o establish a constructive discharge, an employee must plead and prove ... that the employer either intentionally created or knowingly permitted working conditions that were so intolerable or aggravated at the time of the employee's resignation that a reasonable employer would realize that a reasonable person in the employee's position would be compelled to resign.” (Turner v. Anheuser–Busch, Inc. (1994) 7 Cal.4th 1238, 1251, 32 Cal.Rptr.2d 223, 876 P.2d 1022 (Turner), overruled in part on another ground in Romano v. Rockwell Internat., Inc. (1996) 14 Cal.4th 479, 59 Cal.Rptr.2d 20, 926 P.2d 1114.) Respondent contended and the trial court found that appellant was not discharged, but quit voluntarily. For the reasons discussed, we conclude that a cause of action for constructive discharge in violation of public policy could have been stated based on appellant's factual contentions as set forth in his FAC, opposition to the second demurrer, and brief on appeal.

As the Supreme Court explained in Turner, an employer may, in an attempt to avoid liability for a wrongful termination, “refrain from actually firing an employee, preferring instead to engage in conduct causing him or her to quit.” (Turner,supra, 7 Cal.4th at p. 1244, 32 Cal.Rptr.2d 223, 876 P.2d 1022.) If the employer's conduct “effectively forces an employee to resign,” this is a constructive discharge, and is “legally regarded as a firing rather than a resignation.” (Id. at pp. 1244–1245, 32 Cal.Rptr.2d 223, 876 P.2d 1022.)

An employee may not simply “ ‘quit and sue,’ ” claiming to have been constructively discharged. (Turner,supra, 7 Cal.4th at p. 1246, 32 Cal.Rptr.2d 223, 876 P.2d 1022.) The facts must support a finding that the resignation was “coerced,” rather than “simply one rational option for the employee.” (Ibid.) “The conditions giving rise to the resignation must be sufficiently extraordinary and egregious to overcome the normal motivation of a competent, diligent, and reasonable employee to remain on the job to earn a livelihood and to serve his or her employer.” (Ibid.) Moreover, “the cases...