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Tentative Ruling
Judge Thomas Anderle
Department 3 SB-Anacapa
1100 Anacapa Street P.O. Box 21107 Santa Barbara, CA 93121-1107

CIVIL LAW & MOTION

Jason Sapir vs Fielding Graduate University et al

Case No: 1439676
Hearing Date: Tue May 13, 2014 9:30

Nature of Proceedings: Demurrer First Amend.Complt; Motion Strike Portions of First Amended Complaint

Demurrer to First Amended Complaint; Motion to Strike Portions of First Amended Complaint

 

RULINGS

 

Defendants’ demurrer to the third, fourth, fifth, and twelfth causes of action of the FAC for intentional interference with contractual relations, negligent interference with contractual relations, civil conspiracy, and negligent infliction of emotional distress is sustained without leave to amend.  The demurrer to the eighth and eleventh causes of action for fraud and intentional infliction of emotional distress is sustained with leave to amend.  The demurrer to the sixth, ninth, and tenth causes of action for unjust enrichment, negligence (Fielding), and negligence (individual defendants) is overruled.  The motion to strike the requests for attorney’s fees and punitive damages is granted.  Any amended pleading shall be filed and served on or before May 28, 2014. 

 

BACKGROUND

 

Defendant Fielding Graduate University is an accredited, post-graduate school located in Santa Barbara, California.  Defendants Debra Estroff, Joan Read, Kristine Jacquin, Nancy Baker, and Jessica Emick are members of Fielding’s faculty.  In 2008, plaintiff Jason Sapir enrolled as a graduate student in Fielding’s clinical psychology program with a concentration in neuropsychology.  Successful completion of the program leads to a Ph.D. degree in clinical psychology.  In order to complete the program, each student is required to complete at least 500 hours of clinical work and pass a comprehensive examination.  Students are afforded two opportunities to obtain a passing score on the comprehensive examination.  Plaintiff took the comprehensive examination twice and on both occasions failed to pass.  He was then dismissed from the program.

 

On January 17, 2014, plaintiff filed suit against Fielding and the individual defendants, alleging that he was wrongfully and unlawfully dismissed from the school.  On March 19, 2014, plaintiff filed a first amended complaint for (1) breach of contract, (2) breach of the covenant of good faith and fair dealing, (3) intentional interference with contractual relations, (4) negligent interference with contractual relations, (5) civil conspiracy, (6) unjust enrichment, (7) rescission, (8) fraud, (9) negligence (Fielding), (10) negligence (individual defendants), (11) intentional infliction of emotional distress, and (12) negligent infliction of emotional distress.  Defendants now demur to the causes of action for intentional and negligent interference with contractual relations, civil conspiracy, unjust enrichment, fraud, negligence, and intentional and negligent infliction of emotional distress.  Defendants also ask the Court to strike the requests for attorney’s fees and punitive damages.       

 

ANALYSIS

 

Demurrer to FAC

 

A general demurrer will be sustained if “[t]he pleading does not state facts sufficient to constitute a cause of action.”  Code Civ. Proc. §430.10, subd. (e). The objective of a general demurrer is to test the legal sufficiency of the pleading to determine whether the plaintiff has alleged facts sufficient to establish every element of the cause of action at issue.  Cantu v. Resolution Trust Corporation (1992) 4 Cal.App.4th 857, 879.  In reviewing the sufficiency of a cause of action against a general demurrer, the court assumes the truth of all facts properly pleaded by the plaintiff, but not the truth of “contentions, deductions, or conclusions of law or fact.”  Black v. Department of Mental Health (2000) 83 Cal.App.4th 739, 745.

 

Defendants challenge plaintiff’s third and fourth causes of action for intentional and negligent interference with contractual relations, which are asserted against the individual defendants.  To state a cause of action for intentional interference with contractual relations, a plaintiff must plead “(1) a valid contract between plaintiff and a third party; (2) defendant’s knowledge of this contract; (3) defendant’s intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.”  Pacific Gas & Electric Company v. Bear Stearns & Company (1990) 50 Cal.3d 1118, 1126.  Only “a stranger to a contract may be liable in tort for intentionally interfering with the performance of the contract.”  Ibid.  “[A] ‘stranger’. . . means one who is not a party to the contract or an agent of a party to the contract.”  Asahi Kasei Pharma Corporation v. Actelion Ltd. (2013) 222 Cal.App.4th 945, 963.  As stated in PM Group, Inc. v. Stewart (2007) 154 Cal.App.4th 55, 65:

 

“[A]s a matter of law, [defendant] and his agents could not have interfered with the performance of these subcontracts.  The tort of intentional interference with contractual relations is committed only by ‘strangers – interlopers who have no legitimate interest in the scope or course of the contract’s performance.’  [Citation.]  Consequently, a contracting party is incapable of interfering with the performance of his or her own contract and cannot be held liable in tort for conspiracy to interfere with his or her own contract.   [Citation.]  Because the subcontracts at issue here provided for [defendant’s] performance, neither [defendant] nor his agents can be held liable for the tort of interfering with the subcontracts.”

 

In the case at bar, plaintiff alleges that the individual defendants – Debra Estroff, Joan Read, Kristine Jacquin, Nancy Baker, and Jessica Emick – “deliberately, willfully, and intentionally” interfered with his contract with Fielding by ensuring that he did not receive a passing grade on the second comprehensive examination and that he was dismissed from the program.  Under the above case authority, however, as Fielding employees, the individual defendants are not “strangers” to the contract between plaintiff and Fielding and they cannot be held liable for interfering with the contract.  “[I]t is settled that corporate agents and employees acting for and on behalf of a corporation cannot be held liable for inducing a breach of the corporation’s contract.”  Mintz v. Blue Cross of California (2009) 172 Cal.App.4th 1594, 1604 (internal quotes omitted).  Plaintiff alleges that there was “no proper purpose” for the individual defendants’ actions and that defendants were motivated by “personal animosity and self interest, not for the benefit of . . . Fielding”, but this does not change the fact that the individual defendants are Fielding employees and that they were acting on Fielding’s behalf.  The FAC specifically alleges that “at all times herein mentioned” defendants were acting within the course and scope of their agency and/or employment with Fielding. 

 

Plaintiff cites Collins v. Vickter Manor, Inc. (1957) 47 Cal.2d 875, 883 for the proposition that officers and directors of a corporation can be sued for interference with a contract to which the corporation is a party.  Collins, however, is an older case and is at odds with the Supreme Court’s more recent decisions on the matter.  These more recent cases hold that because a contracting party cannot be liable for interfering with the performance of its own contract, its agents and employees are similarly immune from such liability.  See, Shoemaker v. Myers (1990) 52 Cal.3d 1, 24; Applied Equipment Corporation v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 513-514.  Accordingly, the Court will sustain defendants’ demurrer to the third and fourth causes of action for intentional and negligent interference with contractual relations.  As a matter of law, the individual defendants, as Fielding employees, could not have interfered with the performance of the contract between Fielding and plaintiff.

 

Defendants’ demurrer to the fifth cause of action for conspiracy to interfere with contractual relations will likewise be sustained.  A party who is legally incapable of committing a tort cannot be held liable for conspiring to commit the tort.  Weinbaum v. Goldfarb (1996) 46 Cal.App.4th 1310, 1313; see also, Applied Equipment Corporation v. Litton Saudi Arabia Ltd., supra, 7 Cal.4th 503, 513-514 (“tort liability arising from conspiracy presupposes that the co-conspirator is legally capable of committing the tort, i.e., that he or she owes a duty to plaintiff recognized by law and is potentially subject to liability for breach of that duty”).  Because the individual defendants cannot be held liable for interfering with plaintiff’s contract with Fielding, they cannot be held liable for conspiring to interfere with the contract.          

 

Plaintiff’s sixth cause of action for unjust enrichment is asserted against Fielding only.  In California, the cases are divided on whether there is an independent cause of action for unjust enrichment.  In Lectrodryer v. SeoulBank (2000) 77 Cal.App.4th 723, the court held the plaintiff had stated a claim for unjust enrichment against a bank after the bank received funds from one of the plaintiff’s customers and then retained the funds for itself.  “[T]he elements of a claim for unjust enrichment [are] receipt of a benefit and unjust retention of the benefit at the expense of another.”  Id., at 726.  However, other cases have held that unjust enrichment does not exist as a stand-alone cause of action and is simply a form of restitution.  See, Melchior v. New Line Productions, Inc. (2003) 106 Cal.App.4th 779, 793; Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1370.  Restitution may be awarded in lieu of contract damages when the parties had an express contract, but the contract was procured by fraud or is unenforceable for some reason.  Durell, at 1370.  Restitution may also be awarded where the defendant obtained a benefit from the plaintiff by fraud, duress, conversion, or similar conduct.  Ibid.

 

The Court will overrule defendants’ demurrer to the sixth cause of action.  Plaintiff has adequately alleged that Fielding was unjustly enriched when it took approximately $152,271.00 in fees from plaintiff and then wrongfully and unlawfully dismissed him from the school.   Plaintiff claims that the fees should have been returned to him following his dismissal.  While the unjust enrichment claim is essentially a claim for restitution and could have been asserted in conjunction with plaintiff’s breach of contract and fraud causes of action, the Court will allow the claim to stand as an independent cause of action.

 

Defendants next demur to plaintiff’s eighth cause of action for fraud, which is also asserted against Fielding only.  The elements of a cause of action for fraud are (1) a false representation of a material fact, (2) knowledge of its falsity, (3) intent to defraud, (4) justifiable reliance, and (5) resulting damage.  Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 974.  Because fraud is a serious allegation, every element of the claim must be alleged with particularity so as to provide the defendant with the fullest possible details of the charge.  Hill Transportation Company v. Southwest Forest Industries, Inc. (1968) 266 Cal.App.2d 702, 707.  Pleading fraud in general or conclusory terms is insufficient.  Id., at 707; see also, Committee on Children’s Television, Inc. v. General Foods Corporation (1983) 35 Cal.3d 197, 216 (the general rule of liberal construction of pleadings is not applicable to a fraud claim).

 

Defendants contend that plaintiff’s fraud claim fails to meet the heightened pleading requirements.  The Court agrees and will sustain the demurrer to the eighth cause of action.  The FAC alleges that Fielding knowingly misrepresented that it “would treat Plaintiff fairly and not dismiss Plaintiff unlawfully” and that Fielding’s “actual, concealed intent was to breach the Contract.”  (FAC, ¶215.)  The FAC further alleges that Fielding “knew or should have known that at the time Defendant Fielding accepted monies from Plaintiff for tuition that Defendant Fielding was going to dismiss Plaintiff from the Program.”  (FAC, ¶217.)  These allegations, however, are completely devoid of any facts and are mere legal conclusions.  Plaintiff does not identify the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said, or when it was said.  See, Tarmann v. State Farm Mutual Automobile Insurance Company (1991) 2 Cal.App.4th 153, 157.  Plaintiff argues that less specificity is required when it appears that the facts lie more within the knowledge of the defendant, citing Committee on Children’s Television, Inc. v. General Foods Corporation, supra, 35 Cal.3d 197, 217, but this does not excuse plaintiff’s failure to provide any facts.

 

Plaintiff’s ninth cause of action for negligence is asserted against Fielding and the tenth cause of action, also for negligence, is asserted against the individual defendants.  The elements of a cause of action for negligence are (1) a legal duty to use due care, (2) a breach of that duty, (3) a causal connection between that breach and the resulting injury, and (4) actual loss or damage.  Ahern v. Dillenback (1991) 1 Cal.App.4th 36, 42.  For tort purposes, a duty of care may arise by statute or contract, or it may be premised upon the general character of the activity in which the defendant is engaged or the relationship between the parties.  J’Aire Corporation v. Gregory (1979) 24 Cal.3d 799, 803.  “Whether a duty is owed is simply a shorthand way of phrasing what is ‘the essential question – whether the plaintiff’s interests are entitled to legal protection against the defendant’s conduct.’”  Ibid.

 

Plaintiff’s ninth and tenth causes of action are, in substance, claims for negligent infliction of emotional distress.  In both causes of action, plaintiff alleges that as a result of defendants’ wrongful conduct in dismissing plaintiff from the clinical psychology program, plaintiff “has suffered, and continues to suffer, severe emotional distress . . . and will incur in the future, liability for psychologist and possible medical treatment.”  (FAC, ¶¶ 230, 231, 241, 242.)  Defendants contend that the negligence causes of action should be dismissed because they are simply an effort by plaintiff to seek emotional distress damages in what is fundamentally a breach of contract action.  In California, emotional distress damages are not recoverable in an action arising from breach of contract alone.  Erlich v. Menezes (1999) 21 Cal.4th 543, 552 (holding that negligent breach of contract cannot be the basis of an award of emotional distress damages even when such damages were foreseeable).  Defendants allege that the relationship between the parties was purely contractual.

 

The demurrer to the negligence causes of action will be overruled.  Defendants owed a duty of care to plaintiff apart from any contractual relationship.  As an employer, Fielding owed a duty of care in hiring and retaining staff that would perform their duties in a reasonable, honest, and fair manner and not infringe on the rights of students.  See, Doe v. Capital Cities (1996) 50 Cal.App.4th 1038, 1054 (affirming that an employer can be liable to a third party for negligently hiring, supervising, or retaining an unfit employee).  The individual defendants likewise owed a duty of care to plaintiff by virtue of their positions as professors, supervisors, graders, and decision makers at the school.  As stated in J’Aire, “Liability for negligent conduct . . . may be premised upon the general character of the activity in which the defendant engaged [or] the relationship between the parties.”  J’Aire, at 803.  Defendants claim that they owed no special duty of care to plaintiff because their relationship with plaintiff was not like that of a doctor-patient or psychotherapist-patient.  However, defendants have cited no authority, and the Court is aware of none, holding that graduate schools and faculty members do not owe a duty of care to their students.

 

Plaintiff’s eleventh cause of action is for intentional infliction of emotional distress.  To state a cause of action for intentional infliction of emotional distress, a plaintiff must allege (1) extreme and outrageous conduct by the defendant with the intention of causing emotional distress, (2) severe emotional distress on the part of the plaintiff, and (3) an actual or proximate causal link between the defendant’s conduct and the emotional distress.  Hughes v. Pair (2009) 46 Cal.4th 1035, 1050.  To be outrageous, the conduct “must be so extreme as to exceed all bounds of that usually tolerated in a civilized community.”  Potter v. Firestone Tire & Rubber Company (1993) 6 Cal.4th 965, 1001.  The emotional distress must also be “of such substantial quality or enduring quality that no reasonable [person] . . . should be expected to endure it.”  Id., at 1004.

 

In present case, plaintiff’s allegations, whether considered individually or as a whole, are insufficient as a matter of law to state a cause of action for intentional infliction of emotional distress.  Plaintiff alleges that defendants did not provide any meaningful feedback on why he did not pass the first comprehensive examination (FAC, ¶34), that when plaintiff met with his faculty advisor, defendant Debra Estroff, to discuss a course of action for the second comprehensive examination, she did nothing but skim through the pages of the first examination (FAC, ¶36), that defendants failed to respond to plaintiff’s emails in a timely manner (FAC, ¶46), that plaintiff was told that he exhibited “immature behavior” (FAC, ¶51), that individual defendants yelled at plaintiff and treated him in a hostile and demeaning manner (FAC, ¶55), that defendants made several defamatory statements about plaintiff (FAC, ¶99), that the decision to deny plaintiff a passing grade on the second comprehensive examination was “politically motivated” (FAC, ¶110), and that defendants developed a strong animosity for plaintiff, both personally and professionally (FAC, ¶122).  Such allegations do not rise to the level of extreme and outrageous conduct required to state a claim for intentional infliction of emotional distress and defendants’ demurrer will be sustained.

 

Plaintiff’s twelfth cause of action is for negligent infliction of emotional distress.  This cause of action simply reiterates what is already alleged in the ninth and tenth causes of action for negligence (the emotional distress allegations are the same) and therefore the court will sustain defendants’ demurrer to the claim.  See, Award Metals, Inc. v. Superior Court (1991) 228 Cal.App.3d 1128, 1134-1135 (sustaining demurrer to negligence cause of action that was based on identical facts and circumstances as cause of action for Labor Code violation).  The negligent infliction of emotional distress claim adds nothing to the FAC by way of facts or legal theory.

 

The demurrer to the third, fourth, fifth, and twelfth causes of action of the FAC for intentional interference with contractual relations, negligent interference with contractual relations, civil conspiracy, and negligent infliction of emotional distress will be sustained without leave to amend.  A demurrer is properly sustained without leave to amend where there is no “reasonable possibility that the defect can be cured by amendment.”  Blank v. Kirwan (1985) 39 Cal.3d 311, 318.  The demurrer to the eighth and eleventh causes of action for fraud and intentional infliction of emotional distress will be sustained with leave to amend.

 

Motion to Strike Portions of FAC

 

Code of Civil Procedure Section 435, subdivision (b)(1), provides that “[a]ny party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof.”  The grounds for a motion to strike are set forth in Code of Civil Procedure Section 436, which states:

 

“The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper:

 

“(a) Strike out any irrelevant, false, or improper matter inserted in any pleading.

 

“(b) Strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.”

 

For purposes of a motion to strike, “irrelevant” matter includes a “demand for judgment requesting relief not supported by the allegations of the complaint.”  Code Civ. Proc. §431.10, subds. (b)(3), (c).

 

In their motion, defendants have asked the Court to strike plaintiff’s request for attorney’s fees.  As a general rule, attorney’s fees are not recoverable as costs unless authorized by contract, statute, or law.  Code Civ. Proc. §1033.5, subd. (a)(10); Prentice v. North American Title Guaranty Corporation (1963) 59 Cal.2d 618, 620 (“In the absence of some special agreement, statutory provision, or exceptional circumstances, attorney’s fees are to be paid by the party employing the attorney.”)  Plaintiff does not allege any contractual basis for an award of attorney’s fees.  Rather, plaintiff alleges that he is entitled to recover attorney’s fees under Code of Civil Procedure Section 1021.5, the so-called “private attorney general” statute, which reads:

 

“[A] court may award attorneys’ fees to a successful party against one or more opposing parties in any action which has resulted in the enforcement of an important right affecting the public interest if: (a) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement . . . are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery, if any.”

 

Under Section 1021.5, attorney’s fees may be awarded only when the litigation results in a significant public benefit.  LaGrone v. City of Oakland (2011) 2002 Cal.App.4th 932, 946.  Here, plaintiff has not alleged any facts suggesting that he is seeking to enforce an important public right or that a significant benefit will be conferred on the general public or a large class of persons should he prevail in the action.  Plaintiff argues that his lawsuit will “benefit all college age persons” because he is seeking “to ensure that Defendants immediately and swiftly address any instances of wrongful and/or unlawful dismissals from Fielding Graduate University,” but the mere possibility that a lawsuit “may have conveyed a cautionary message to the [defendants] about their conduct or that it might cause them to change their practices in the future, is insufficient to satisfy the significant public benefit requirement.”  Ibid.  This is clearly a private dispute that does not involve the public interest.  Plaintiff is seeking compensatory damages in the amount of $2,652,271.00.  The Court will therefore grant defendant’s motion to strike the requests for attorney’s fees.

 

The Court will also grant defendants’ motion to strike the requests for punitive damages.  For the reasons discussed above, plaintiff has failed to assert any tort claims against defendants that would give rise to an entitlement to punitive damages.