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Mugno v. Hazel Hawkins Memorial Hospital

United States District Court, N.D. California, San Jose Division

May 25, 2017

DIANA MUGNO, Plaintiff,


          LUCY H. KOH United States District Judge.

         Plaintiff Diana Mugno (“Plaintiff”) sues Defendants Hazel Hawkins Memorial Hospital (“Hazel Hawkins”), San Benito Health Care District (“the District”), and Kenneth Underwood (“Underwood”) (collectively, “Defendants”) for causes of action arising out of Plaintiff's termination. ECF No. 5 (First Amended Complaint, or “FAC”). Before the Court is a motion to dismiss filed by Hazel Hawkins, the District, and Underwood in his official capacity (collectively, the “District Defendants”), and a separate motion to dismiss filed by Underwood in his individual capacity. ECF Nos. 15, 16. The Court finds these matters suitable for resolution without oral argument and hereby VACATES the motions hearing set for June 8, 2017, at 1:30 p.m. Having considered the parties' submissions, the relevant law, and the record in this case, the Court hereby GRANTS Defendants' motions to dismiss.


         A. Factual Background

         The District is a healthcare district within the state of California that owns and maintains Hazel Hawkins.[1] FAC ¶¶ 6, 9, 11. Underwood is the Chief Executive Officer (“CEO”) of the District. Id. ¶ 12.

         Plaintiff is a registered nurse and was employed by the District as the Director of Rural Health Clinics. Id. ¶¶ 1, 8, 26. Plaintiff was hired in this role on March 11, 2013. Id. Plaintiff's job duties included “oversee[ing] the operation of services provided through the Clinics, ” and “setting policy and directing, administering, and evaluating programs consistent with the organization goals and objectives.” Id. ¶ 28.

         On March 19, 2016, a male physician, Dr. Herrick, treated a female patient at a clinic after hours. Id. ¶ 32. According to the FAC, the physician instructed the staff to register the patient, but not to charge the patient. Id. On March 22, 2016, a male physician's assistant, Oskar Lizarraga-Davis (“Lizaarraga-Davis”), treated the same female patient for a follow up visit, but no charge was generated for the follow-up visit. Id. ¶ 33. Instead, the visit was documented as a “telephone encounter.” Id. On March 29, 2016, Lizarraga-Davis treated the same female patient and again did not generate charges. Id. ¶ 34. The treatment was charged as a “virtual visit.” Id.

         On March 31, 2016, Plaintiff sent an email to Chief Nursing Officer Lois Owens (“Owens”), and reported to Owens the fact that a female patient had been treated after hours and that no charges were generated. Id. ¶ 30. Owens told Plaintiff to email Underwood and Mark Robinson (“Robinson”), the Chief Financial Officer (“CFO”) of the District. Id.

         Plaintiff reported her complaint to Underwood and Robinson on March 31, 2017. Id. The FAC alleges, presumably incorrectly, that on March 30, 2016-the day before Plaintiff allegedly reported her complaint to Underwood and Robinson-that Robinson left a message for Plaintiff which indicated that Plaintiff's complaint had been communicated to Underwood. Id. ¶ 35. Robinson told Plaintiff that Underwood would discuss Plaintiff's complaint with Dr. Herrick. Id.

         On May 11, 2016, an approximately 4-year old child fell in an exam room at a clinic while his mother was receiving treatment. Id. ¶ 36. “The child sustained a laceration” during the fall and was examined by Dr. Herrick and physician's assistant Lizarraga-Davis. Id. The child was observed for approximately 15 to 20 minutes and the mother was informed to follow up with the child's primary care provider. Id. The incident was not documented or charted. Id.

         On May 13, 2016, Plaintiff received an email from the child's primary care provider. Id. ¶ 37. The primary care provider expressed frustration that she was not told about what happened to the child prior to the child's appointment. Id. After receiving this email, Plaintiff checked the child's charts and noticed that the child's fall had not been documented. Id. ¶ 38.

         That same day, May 13, 2016, Plaintiff telephoned Chief Nursing Officer Owens and reported the failure to chart the child's fall. Id. ¶ 39. Plaintiff thereafter called Lizarraga-Davis and requested that Lizarraga-Davis please document the incident in the child's records. Id. Plaintiff told Lizarraga-Davis that the failure to document was “a risk and liability incident.” Id. Later that day, on May 13, 2016, Plaintiff noted that the requested chart documentation had been entered. Id. ¶ 41.

         “Within days after [Plaintiff] reported her complaints” to Owens, Dr. Herrick resigned his position as Director of the Family Clinics. Id. ¶ 40.

         From June 15, 2016 to June 24, 2016, Plaintiff conducted a survey of mid-level medical providers at the clinic regarding process improvements. Id. ¶ 42. Plaintiff received positive comments about her performance from the survey. Id. Plaintiff also consistently received positive annual evaluations. Id. ¶ 43.

         On June 27, 2016, Plaintiff received a telephone call at her home from Owens. Id. ¶ 44. Owens told Plaintiff that Owens had met with Underwood. Id. According to Owens, Underwood “stated that [Plaintiff] was the problem that made it difficult to hire a new medical director, and that [Plaintiff] was a problem with the providers in the clinic.” Id. ¶ 44. Owens told Plaintiff that Underwood “had made a decision to restructure the clinics, and that there would now not be a need for a nurse director.” Id. Owens told Plaintiff that Underwood said that the reorganization “might take place as early as July 1, 2016.” Id. Plaintiff asked Owens whether Underwood's statement to Owens meant that Plaintiff's position would be eliminated, and Owens replied “Yes, Probably.” Id. ¶ 45. According to the FAC, “[t]his campaign to eliminate [Plaintiff's] position started in May 2016, right after she notified the CFO and CEO of the complaints about unsafe patient care and conditions that occurred in one of the clinics and culminated in her termination.” Id. ¶ 45.

         Plaintiff was terminated on October 11, 2016. Id. ¶ 26. According to the FAC, Underwood “identified and targeted only women employees who had raised and reported complaints of substandard and unsafe patient care to be terminated during the ‘restructuring.'” Id. ¶ 46. “No male providers' positions were identified for elimination in the CEO's new restructure.” Id.

         B. Procedural History

         On July 11, 2016, Plaintiff filed an administrative tort claim with the County of San Benito's board of supervisors. Id. ¶ 21. The County of San Benito rejected Plaintiff's tort claim on August 25, 2016. Id.

         Plaintiff also filed complaints with California's Department of Fair Employment and Housing (“DFEH”) and the Equal Employment Opportunity Commission (“EEOC”). Id. ¶ 20. On September 19, 2016, the DFEH and EEOC issued Plaintiff right to sue letters. Id.

         On December 1, 2016, Plaintiff filed a complaint in this Court against Hazel Hawkins, San Benito Health Care District, the County of San Benito, and Underwood, in both his individual and official capacities. ECF No. 1. On December 12, 2016, Plaintiff filed the FAC. See FAC.

         The FAC alleges 19 causes of action. Counts One through Five allege § 1983 causes of action relating to Defendants' termination of Plaintiff in retaliation for Plaintiff exercising her First Amendment right to free speech. See Id. ¶¶ 47-121. Counts Six through Thirteen raise § 1983 causes of action related to Defendants' termination of Plaintiff in violation of the Fourteenth Amendment. Id. ¶¶ 122-247. Count Fourteen alleges that the District Defendants violated Title VII by discriminating against Plaintiff on the basis of her gender. Id. ¶¶ 269-78. Count Fifteen alleges retaliation in violation of California Health and Safety Code § 1278.5. Id. ¶¶ 280-83. Count Sixteen alleges retaliation in violation of California Labor Code § 1101. Id. ¶¶ 284-94. Count Seventeen alleges negligence in violation of California Government Code § 815.2. Id. ¶¶ 295-08. Count Eighteen alleges discrimination in violation of the Fair Housing and Employment Act (“FEHA”), California Government Code § 12940, against the District. Id. ¶¶ 309-24. Finally, Count Nineteen alleges intentional infliction of emotional distress against only Underwood, presumably in his individual capacity. Id. ¶¶ 325-28.

         On February 14, 2017, the County of San Benito filed a motion to dismiss the FAC. ECF No. 12. On February 15, 2017, the District Defendants filed a motion to dismiss. ECF No. 15 (“Dist. Def Mot.”). On February 15, 2017, Underwood, in his individual capacity, filed a motion to dismiss. ECF No. 16 (“Underwood Mot.”).

         On February 28, 2017, Plaintiff filed a notice of voluntary dismissal of the County of San Benito. ECF No. 20. On that same day, the Court dismissed the County of San Benito and denied as moot the County of San Benito's motion to dismiss the FAC. ECF No. 21.

         On March 1, 2017, Plaintiff filed an opposition to the District Defendants' motion to dismiss. ECF No. 22 (“Pl. Opp.”). Plaintiff did not file an opposition to Underwood's motion to dismiss.

         On March 8, 2017, Defendants filed replies. ECF Nos. 28 (“Dist. Def. Reply”); ECF No. 29 (“Underwood Reply”).


         A. Motion to Dismiss Under Rule 12(b)(6)

         Pursuant to Federal Rule of Civil Procedure 12(b)(6), a defendant may move to dismiss an action for failure to allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a ‘probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal citation omitted).

         For purposes of ruling on a Rule 12(b)(6) motion, the Court “accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). However, a court need not accept as true allegations contradicted by judicially noticeable facts, Shwarz v. United States, 234 F.3d 428, 435 (9th Cir. 2000), and a “court may look beyond the plaintiff's complaint to matters of public record” without converting the Rule 12(b)(6) motion into one for summary judgment, Shaw v. Hahn, 56 F.3d 1128, 1129 (9th Cir. 2011). Mere “conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss.” Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004).

         B. Leave to Amend

         If the Court concludes that a motion to dismiss should be granted, it must then decide whether to grant leave to amend. Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend “shall be freely given when justice so requires, ” bearing in mind “the underlying purpose of Rule 15 . . . [is] to facilitate decision on the merits, rather than on the pleadings or technicalities.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (citation omitted). Nonetheless, a district court may deny leave to amend a complaint due to “undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [and] futility of amendment.” See Leadsinger, Inc. v. BMG Music Publ'g, 512 F.3d 522, 532 (9th Cir. 2008).


         Defendants move to dismiss all 19 claims asserted in the FAC. The Court first addresses the causes of action under § 1983, and then addresses the causes of action under Title VII and FEHA.

         The Court then addresses the remaining state causes of action against the District Defendants, and finally the Court addresses the intentional infliction of emotional distress claim asserted against Underwood in his individual capacity.

         A. Section 1983 Causes of Action (Counts One through Thirteen)

         Plaintiff asserts in Counts One through Thirteen claims under § 1983. Defendants move to dismiss Plaintiff's § 1983 claims on three primary bases. First, Defendants contend that Counts One through Five, which allege § 1983 claims based on violation of Plaintiff's First Amendment rights, fail to state a claim because Plaintiff's alleged speech is not constitutionally protected. Second, Defendants contend that Counts Six through Thirteen, which allege § 1983 claims based on violation of Plaintiff's Fourteenth Amendment rights, fail to state a claim because Plaintiff has no constitutionally protected property interest in her employment. Third, Defendants contend that all of Plaintiff's ยง 1983 causes of action fail for ...

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