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Stanley v. Bobo Construction, Inc.

United States District Court, E.D. California

April 10, 2014

MONTY R. STANLEY, individually and doing business as NORTH WEST SURFACING, Plaintiff,
v.
BOBO CONSTRUCTION, INC., a California corporation; CITY OF ELK GROVE, Defendants.

ORDER GRANTING BOBO CONSTRUCTION INC'S AND THE CITY OF ELK GROVE'S MOTIONS TO DISMISS

JOHN A. MENDEZ, District Judge.

This matter is before the Court on Defendant Bobo Construction, Inc.'s ("BCI") Motion to Dismiss Plaintiff's Fifth Cause of Action of his First Amended Complaint ("FAC") (Doc. #5) and Defendant City of Elk Grove's (the "City") Motion to Dismiss Plaintiff's FAC (Doc. #6). Plaintiff Monty R. Stanley, individually and doing business as North West Surfacing, ("Plaintiff") opposes both motions (Doc. ##8, 9) and Defendants replied (Doc. ##13, 14).[1] For the reasons set forth below, BCI's Motion to Dismiss Plaintiff's Fifth Cause of Action of his FAC and the City's Motion to Dismiss Plaintiff's FAC are granted.

I. FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND

Plaintiff originally filed this action on September 9, 2013, in Sacramento County Superior Court (Doc. #1) against BCI and the City (collectively "Defendants"). This action was removed to this Court on January 6, 2014, based on federal question jurisdiction, 28 U.S.C. § 1331. Id . In the FAC, Plaintiff alleges five causes of action: (1) Breach of contract as to BCI; (2) deprivation of Plaintiff's constitutional rights pursuant to 42 U.S.C. 1983 by Defendants; (3) common counts against Defendants; (4) interference with contractual relations against the City; and (5) interference with prospective economic advantage against Defendants (Doc. #1).

According to the allegations in the FAC, the City awarded BCI a contract for a public works construction project, the Special Waste Collection Center and Disposal Lane Project ("Project") in May 2012. FAC ¶¶ 7-8. In or about May 2012, BCI and Plaintiff entered into a subcontract agreement, under which Plaintiff was to furnish and perform site demolition work at the Project. Id . ¶ 9. Plaintiff alleges that beginning in or about August 2012 and continuing through September 21, 2012, the City and BCI discharged him as a subcontractor because he complained about potentially hazardous and toxic contaminants at the Project site and requested that appropriate protective measures be taken. Id . ¶ 19. On or about August 31, 2013, Plaintiff presented a written claim for economic damages to the City. Id . ¶ 16.

II. OPINION

A. Judicial Notice

The City requests judicial notice of the government claim made by Plaintiff to the City dated August 31, 2013 ("August 31 Government Claim"). August 31 Government Claim, Ex. A, Def.'s Request for Judicial Notice ("RJN"), Doc. #7. Courts may consider extrinsic evidence when the plaintiff's claim depends on the contents of a document and the parties do not dispute the authenticity of the document. See, e.g., Sherman v. Stryker Corp. , 2009 WL 2241664, at *2 (C.D. Cal. Mar. 30, 2009) (citing Lee v. City of Los Angeles , 250 F.3d 668, 688 (9th Cir. 2001) and Fed.R.Evid. 201). Here, Plaintiff refers to the government claim in the FAC and Plaintiff does not dispute the authenticity of the government claim. Accordingly, the Court grants the City's request for judicial notice.

Plaintiff also requests judicial notice of the government claim made by Plaintiff dated February 19, 2014. Ex. A, Pl.'s Request for Judicial Notice ("RJN"), Doc. # 9-2. For the same reasons mentioned above, the Court grants Plaintiff's request for judicial notice.

B. Evidentiary Objections

The City objects to the Declaration of John J. Rueda submitted by Plaintiff with his opposition to the City's motion to dismiss. Objections, Doc. #15.

Generally, courts may not consider materials beyond the pleadings in ruling on a Federal Rule of Civil Procedure 12(b)(6) motion. Lee v. City of Los Angeles , 250 F.3d 668, 688 (9th Cir. 2001) (citing Branch v. Tunnell , 14 F.3d 449, 453 (9th Cir. 1994)). There are two exceptions to this rule: First, a court may consider "material which is properly submitted as part of the complaint" on a motion to dismiss. Id . Second, under Federal Rule of Evidence 201, "a court may take judicial notice of matters of public record.'" Id . (citing Mack v. South Bay Beer Distrib. , 798 F.2d 1279, 1282 (9th Cir. 1986)).

In this case, as part of his opposition, Plaintiff submitted a declaration by his counsel. This declaration was not attached to the complaint nor has Plaintiff requested judicial notice of it; therefore, this declaration is outside the pleadings. Accordingly, the Court sustains the City's objection and will not consider the declaration.

C. Discussion

1. BCI's Motion to Dismiss

BCI moves to dismiss Plaintiff's fifth cause of action for interference with prospective economic advantage because Plaintiff fails to allege that BCI engaged in an independently wrongful conduct. Plaintiff argues that the independently wrongful conduct requirement for this cause of action is BCI's retaliation.

The elements for interference with prospective economic advantage are (1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the Plaintiff; (2) the defendant's knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant. Korea Supply Co. v. Lockheed Martin Corp. , 29 Cal.4th 1134, 1153 (2003)). For the third element, a plaintiff must plead that the defendant engaged in an independently wrongful act, which is an act "proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard." Id. at 1159.

Plaintiff argues that BCI's independently wrongful act in this case is discharging Plaintiff in retaliation for his complaints in violation of California Labor Code sections 6310 and 1102.5(b). BCI argues that Sections 6310 and 1102.5(b) do not apply to non-employees, such as Plaintiff. Section 6310 makes it unlawful to fire or otherwise retaliate against an employee who makes a workplace safety complaint with government agencies. Cal. Lab. Code § 6310. Section 1102.5(b) prohibits retaliation by an employer against employees who report illegal activity. Cal. Lab. Code § 1102.5(b). Therefore, both sections of the labor code apply to employees. Plaintiff, however, was a subcontractor and he has not alleged that he was misclassified as an independent contractor. See FAC ¶ 9. Accordingly, Sections 6310 and 1102.5(b) do not apply.

Plaintiff also argues that BCI's retaliation infringed on his constitutional rights of speech and petition for redress of grievances, citing Soranno's Gasco, Inc. v. Morgan , 874 F.2d 1310 (9th Cir. 1989) and Allen v. Scribner , 812 F.2d 426, amended, 828 F.2d 1445 (9th Cir. 1987). However, in both Soranno's Gasco and Allen, the plaintiffs brought retaliation claims under 42 U.S.C. § 1983 claims. Under § 1983, "plaintiffs must plead that (1) the defendants acting under color of state law (2) deprived plaintiffs of rights secured by the Constitution or federal statutes." Soranno's Gasco , 874 F.2d at 1313-14 (quoting Gibson v. United States , 781 F.2d 1334, 1338 (9th Cir. 1986)). Here, Plaintiff alleged that BCI "acted under the color of state law, California Contract Code § 4107" but has not alleged any facts to show that BCI's actions as a general contractor amounted to state action. FAC ¶ 23. Therefore, Plaintiff has not sufficiently alleged that BCI was acting under the color of state law.

Accordingly, Plaintiff's fifth cause of action against BCI is dismissed. Because Plaintiff may be able to allege an independently wrongful act, the Court grants Plaintiff leave to amend.

2. The City's Motion to Dismiss

The City moves to dismiss Plaintiff's second, third, fourth, and fifth causes of action. In his opposition, Plaintiff concedes that his third cause of action for common counts against the City cannot be maintained.

a. Intentional Tort Causes of Action

The City argues that Plaintiff's fourth and fifth causes of action for intentional interference with contractual relations and interference with economic advantage (collectively "intentional tort claims") fail as a matter of law, in part, because the City is not liable for tortious injury unless liability is imposed by statute or a mandatory duty of care exists. Plaintiff argues that the City is liable under Government Code sections 815.2 and 815.4.

The California Government Tort Claims Act provides that a public entity is not liable for any injury except as provided by statute. See Cal. Gov. Code § 815. However, a public entity may be vicarious liable under Government Code section 815.2, providing for respondeat superior liability for acts or omissions of employees, and Government Code section 815.4, providing for liability for acts or omissions of independent contractors to "the same extent that the public entity would be subject to such liability if it were a private person."

In his opposition, Plaintiff argues that it can be reasonably inferred that the City was acting through its employees and as a result, the City is liable for any wrongful or tortious activities by the employees. However, BCI is not an employee of the City and the FAC does not contain any factual allegations to establish vicarious liability predicated on the conduct of an independent contractor. Further, to the extent the City's liability is premised on BCI's liability for interference with prospective economic advantage, Plaintiff's claim against the City fails for the reasons mentioned above.

Accordingly, the Court dismisses Plaintiff's intentional tort claims against the City. The Court grants Plaintiff leave to amend because he may be able to allege vicarious liability and clarify his claims. Therefore, the Court need not address at this time the City's remaining three arguments that these claims should be dismissed because: (1) they are time barred under the statute of limitations of the Government Claims Act; (2) Plaintiff's intentional tort claims fail to comply with Government Claims Act by not giving notice of the claims; and (3) Plaintiff fails to state a claim because he does not allege the City intended to disrupt any contract or economic relationship.

b. 42 U.S.C. § 1983

The City moves to dismiss Plaintiff's second cause of action for violation of 42 U.S.C. § 1983, in part, because Plaintiff failed to allege sufficient facts to establish the requisite elements of a claim under Monell v. Department of Social Services , 436 U.S. 658, 690-91 (1978). Plaintiff argues that he has alleged a policy under Monell because the City had final policy-making authority to remove him.

Respondeat superior liability does not apply to actions against local government entities under § 1983. See Monell , 436 U.S. at 691. Therefore, to prevail in a civil action against a local governmental entity, a plaintiff must establish "(1) that he possessed a constitutional right of which he was deprived; (2) that the municipality had a policy; (3) that this policy amounts to deliberate indifference' to the plaintiff's constitutional right; and (4) that the policy is the moving force behind the constitutional violation.'" Oviatt By & Through Waugh v. Pearce , 954 F.2d 1470, 1474 (9th Cir. 1992) (quoting City of Canton v. Harris , 489 U.S. 378, 389-91 (1989)). For the second element, a single decision may constitute an act of official government policy. Pembaur v. City of Cincinnati , 475 U.S. 469, 480 (1986). However, "[m]unicipal liability attaches only where the decisionmaker possesses final authority to establish municipal policy with respect to the action ordered." Id. at 481.

In the FAC, Plaintiff does not allege any facts to establish that there was a policy as required under Monell. At most, Plaintiff alleges that the City "acted under the color of state law, California Contract Code § 4107, " which does not establish that the City possessed final authority. In his opposition, Plaintiff argues that the City possessed final decision-making authority under the Public Contract Code. However, these allegations are not in the FAC.

Accordingly, the Court dismisses Plaintiff's § 1983 claim against the City. Because Plaintiff may be able to allege a Monell claim, the Court grants leave to amend.

III. ORDER

For the reasons set forth above, the Court GRANTS BCI's Motion to Dismiss Plaintiff's Fifth Cause of Action with leave to amend and GRANTS the City's Motion to Dismiss Plaintiff's FAC with leave to amend. Plaintiff shall file his Amended Complaint within twenty (20) days from the date of this Order. Defendants shall file their responsive pleadings to the Amended Complaint within twenty (20) days from the date it is filed. If Plaintiff elects not to file an Amended Complaint, the case will proceed against BCI on the FAC with Plaintiff's remaining claims.

IT IS SO ORDERED.


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