SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN DIEGO, CENTRAL DIVISION
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1 Robert J. Francavilla, SBN 0 rjf@cglaw.com Jeremy Robinson, SBN jrobinson@cglaw.com Srinivas M. Hanumadass, SBN vas@cglaw.com CASEY GERRY SCHENK FRANCAVILLA BLATT & PENFIELD, LLP 0 Laurel Street San Diego, CA 1 Telephone: () - Facsimile: () - Attorneys for Plaintiff SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN DIEGO, CENTRAL DIVISION EDWARD HOGAN, v. Plaintiff, U.S. BANCORP dba U.S. BANK, N.A., et al., Defendants. CASE NO CU-PO-CTL Plaintiff s Opposition to the Demurrer filed by U.S. Bank National Association; Memorandum of Points and Authorities IMAGED FILE Date: April, 01 Time: :00 a.m. Dept.: Judge: Hon. Richard E.L. Strauss Case Filed: Jan., 01 Trial Date: July, 01
2 The demurrer filed by U.S. Bank National Association ( National Association or USBNA ) in reality a poorly disguised motion for summary judgment is baseless and should be overruled. National Association s claim that plaintiff Edward Hogan is its employee, and thus is limited to workers compensation benefits, is both unsupportable and wrong. First, it is clear that Hogan was not an employee of National Association when he was hurt, since he was employed by U.S. Bancorp Investments, Inc. ( Investments or USBI ), not National Association. Investments is an entirely different subsidiary U.S. Bancorp, the parent company of both National Association and Investments. Indeed, National Association admits as much. Instead, National Association claims that U.S. Bancorp and all its subsidiaries are basically the same company. So, the argument goes, since Hogan worked for one subsidiary, he was the employee of all the other subsidiaries as well. National Association offers no support for this position, because there is none not in the pleadings, not in the facts, and not in the law. Conceding the allegations in the complaint do not allow for its argument, National Association instead impermissibly tries to convert the demurrer into an evidentiary motion by resorting to discovery responses and other extrinsic evidence. That alone is grounds for overruling the demurrer. But, even assuming the evidence could be considered at this stage, it only undermines National Association s position. The SEC filing National Association asks this court to judicially notice states that The Company [U.S. Bancorp] is a legal entity separate and distinct from its subsidiaries. Def. Exh., p.. Hardly an indication that the companies are all basically one. Finally, National Association has not unearthed a single case that holds one subsidiary of a national corporation can bar suit from an employee of an entirely different subsidiary based on the exclusive remedy doctrine. The law is to the contrary: The California common law tort system faced with interrelated, sprawling economic giants should not deny adequate recovery to an injured employee due to the fortuitous 1
3 circumstances that the tortfeasor is not a stranger but is controlled by the same business enterprise that controls his immediate employer. Gigax v. Ralston Purina Co. () 1 Cal.App.d 1, ARGUMENT 1. National Association s demurrer improperly argues disputed factual issues National Association s demurrer quickly glosses over the actual allegations in Mr. Hogan s complaint and instead focuses on disputed factual matters that National Association believes are dispositive. National Association misunderstands the purpose of a demurrer. On a demurrer a court's function is limited to testing the legal sufficiency of the complaint. Marina Tenants Assn. v. Deauville Marina Development Co. () 1 Cal.App.d 1,. As our Fourth District explained, A demurrer is simply not the appropriate procedure for determining the truth of disputed facts. Joslin v. H.A.S. Ins. Brokerage () Cal.App.d,, quoting Ramsden v. Western Union () 1 Cal.App.d,. National Association tries to get around this by requesting this Court take judicial notice of factual matters found in Mr. Hogan s discovery responses and an SEC filing by U.S. Bancorp. That too is improper. A court may take judicial notice of the existence of each document in a court file, but can only take judicial notice of the truth of facts asserted in documents such as orders, findings of fact and conclusions of law, and judgments. Day v. Sharp () 0 Cal.App.d 0, 1 (emphasis in original). This is because the hearing on demurrer may not be turned into a contested evidentiary hearing through the guise of having the court take judicial notice of documents whose interpretation is disputable. See Del E. Webb Corp. v. Structural Materials Co. (1) 1 Cal.App.d, 0. Instead, judicial notice of matters upon demurrer will be dispositive only in those instances where there is not or cannot be a factual dispute concerning that which is sought to be judicially noticed. Joslin v. H.A.S. Ins. Brokerage, supra, Cal.App.d at p..
4 National Association cannot establish the requisite elements of an employment relationship between Mr. Hogan and National Association Even assuming for the sake of argument that the request for judicial notice is proper, National Association s demurrer remains groundless. As explained above, the substance of the demurrer is that, according to National Association, Mr. Hogan is an employee of National Association and so is barred by the workers compensation exclusivity rule from pursuing a case against it. National Association reaches this conclusion by defying basic corporation law and claiming that National Association s parent corporation, U.S. Bancorp, and all its subsidiary companies, should be treated as the same company. The sole support National Association offers for this claim is a -page SEC filing by U.S. Bancorp. National Association does not explain how the SEC filing substantiates its claim, nor does it refer to any part of the document that supposedly says what National Association claims. In fact, a quick read of the SEC filing shows it says exactly the opposite of what National Association claims. On page of the document, U.S. Bancorp states that The Company [U.S. Bancorp] is a legal entity separate and distinct from its subsidiaries. Def. Exh., p.. Those subsidiaries being National Association and Investments, among others. The filing also explains that U.S. Bancorp is a financial holding company and bank holding company that provides varied services through its banking subsidiary, National Association, and its non-banking subsidiaries like Investments. Nowhere is it suggested they all operate as the same company 1. Although it hard to discern the exact corporate structure of U.S. Bancorp and its various subsidiaries from the SEC filing, it appears the basic organization works like the chart on the following page: 1 Indeed, in the Motion for Summary Judgment filed by U.S. Bancorp calendared for hearing on May 1, 01, U.S. Bancorp takes the position that it and Association are entirely different entities and that U.S. Bancorp is not liable for defects on property owned by Association.
5 U.S. Bancorp Investments and other non-banking subsidiaries Edward Hogan National Association and other banking subidiaries 0 1 Each of U.S. Bancorp s subsidiaries is a separate company, and each is subject to its own laws a regulations, depending on what the company does (e.g., banking, securities and investment, insurance, etc.) Def. Exh., pp., 1,. National Association is the banking arm of U.S. Bancorp and Investments is the investment and insurance arm. Id. All of which makes it hard to fathom how an employee of one of the subsidiaries Investments could be deemed as a matter of law to be an employee of all the other subsidiaries as well, and National Association s demurrer provides no guidance. Association makes passing reference to two cases that discuss the factors used to determine when companies will be deemed so interrelated to be considered the same entity, but fails to explain how those factors apply in this case. Likely because those decisions hurt National Association rather than help it. In the main case cited by USBNA, Gigax v. Ralston Purina Co., supra, 1 Cal.App.d
6 , the Fourth District rejected the same argument made by National Association here. There, the plaintiff was employed by Van Camp Seafood and was injured while operating a conveyor belt designed by the parent company, Ralston Purina. Van Camp and Ralston were each distinct corporate entities. Id. at p. 0, fn.. When the plaintiff sued Ralston, Ralston claimed to be the plaintiff's employer for workers' compensation purposes. Ralston argued that Van Camp was merely an operating division under Ralston and, therefore, Ralston was the plaintiff's employer for purposes of workers' compensation law. Id. at p. 0. On appeal by the plaintiff, the Court of Appeal reversed summary judgment for Ralston. A host of cases hold an employee of a wholly owned subsidiary who has obtained workers' compensation benefits from the subsidiary may maintain an action in tort against the parent corporation and this is so even though the parent and subsidiary are covered by the same workmen's compensation policy. Id. at p. 01. The court observed that this holding is essentially mandated where the separate businesses are separately incorporated because there are two separate employing entities. Id. at pp National Association makes no effort to distinguish Gigax, or even to address its holding. It merely repeats its unfound assertion that [National Association] and [Investments] are essentially two arms of the same company. Since that claim is without any factual support, it does not help National Association. That is the end of the inquiry. National Association does not attempt to show the indicia of an employment relationship between Mr. Hogan and National Association are present, likely because they are not. National Association did not control Mr. Hogan s work or pay his salary. And, in any event, that is obviously a factual inquiry well beyond suitability for a demurrer.
7 CONCLUSION National Association s demurrer must be overruled. It is predicated on factual matters outside the pleadings, and those matters undermine rather than help National Association. National Association has never been Mr. Hogan s employer Dated: April, 01 Casey Gerry Schenk Francavilla Blatt & Penfield, LLP By: Jeremy Robinson Attorneys for Plaintiff
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