Doe v. CFR Enterprises, Inc.

CourtCalifornia Court of Appeal
DecidedJuly 27, 2023
DocketA163543
StatusPublished

This text of Doe v. CFR Enterprises, Inc. (Doe v. CFR Enterprises, Inc.) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Doe v. CFR Enterprises, Inc., (Cal. Ct. App. 2023).

Opinion

Filed 6/29/23; certified for publication 7/27/23 (order attached)

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION TWO

JANE DOE #21 (S.H.) et al., Plaintiffs and Appellants, A163543 v. CFR ENTERPRISES, INC., et al., (San Mateo County Super. Ct. No. 19CIV00392) Defendants and Respondents. JANE DOE #4 (D.T.), Plaintiff and Appellant, (San Mateo County v. Super. Ct. No. 19CIV04095) DESERT VENTURES SOUTH, LLC, Defendant and Respondent. JANE DOE #9 (J.C.) et al., Plaintiffs and Appellants, (San Mateo County v. Super. Ct. No. 19CIV05035) RME CLINICS, INC., et al., Defendants and Respondents.

In 2019, several dozen plaintiffs sued Massage Envy Franchising, LLC (a franchisor) and Massage Envy franchisees alleging that as adults they were sexually assaulted by massage therapists at Massage Envy locations in

1 California between August 2003 and November 2014. This is an appeal by 18 of those plaintiffs from judgments entered against them after demurrers were sustained without leave to amend on the ground that the applicable statutes of limitations barred all their claims. Just as the appellate briefing was about to be completed, the Governor approved Assembly Bill No. 2777, which amended section 340.16 of the Code of Civil Procedure to revive certain claims that relate to sexual assault. (Stats. 2022, ch. 442, § 3, eff. Jan. 1, 2023.) After plaintiffs argued in their reply brief that the new statute revived all their claims, we asked for and received supplemental briefing from the parties on the effect of the new law. It is clear that the new law revives some, if not all, of plaintiffs’ claims. But it is impossible for us to fairly say more at this point, because the operative complaints and the demurrers at issue were drafted before the revival statute was enacted. We shall reverse the judgment of dismissal and remand to the trial court for further proceedings to give plaintiffs the opportunity to amend their complaints if necessary, and to give defendants the opportunity to make further arguments, if they so choose, regarding the effect of the revival statute on each of the causes of action brought by each of the plaintiffs in this case. FACTUAL AND PROCEDURAL BACKGROUND Allegations in Plaintiffs’ Complaints Three separate complaints are at issue in this appeal, which is brought by 18 of the original plaintiffs.1 In one of the complaints, the plaintiffs

1 The appellants are Jane Doe Nos. 21 (S.H.), 23 (A.H.), 25 (M.H.), 27

(R.L.), 28 (A.L.), 30 (M.M.), 33 (A.M.), 37 (M.S.), and 38 (E.L.) in superior court case No. 19CIV00392; Jane Doe No. 4 (D.T.) in case No. 19CIV04095; and Jane Doe Nos. 9 (J.C.), 10 (E.D.), 11 (T.S.), 12 (A.H.), 15 (J.M.), 16 (T.R.), 18 (L.N.), and 19 (M.M.) in case No. 19CIV05035. The contours of this appeal

2 alleged in general terms that the defendants were aware of a “rampant problem of sexual assaults occurring at Massage Envy locations,” and concealed or suppressed information about the assaults, intending that plaintiffs would buy massage services that defendants knew were unsafe. Defendants allegedly “actively prevent[ed] sexual assault . . . from being reported to law enforcement and/or state massage therapy boards,” or to the public at large. And although defendants allegedly knew that their security screening of massage therapists was deficient, their background checks were below industry standards, and their massage therapists were not trained or supervised, defendants concealed this information from plaintiffs and deliberately represented the opposite, including that they had a “zero tolerance” policy relating to sexual misconduct by massage therapists, and that their massage therapists were psychologically fit, properly screened, and safe. Plaintiffs alleged they reasonably relied on defendants’ false assurances that the massage services they offered were safe and free of inappropriate touching, and had no way to discover that the assurances were false, because

have been in some flux. Initially, there were 23 plaintiffs/appellants and numerous defendants/respondents. Only one of the respondents, Massage Envy Franchising, LLC, was common to all the plaintiffs. Before the opening brief was filed, three plaintiffs dismissed their appeals, leaving 20 plaintiffs. After respondents’ brief was filed, another plaintiff dismissed her appeal in its entirety and the remaining 19 plaintiffs dismissed their appeals as to the common defendant. According to a letter filed by plaintiffs’ counsel on May 30, 2023, 13 named defendants remained in the appeal as respondents. At oral argument, appellants’ counsel informed us that one of the 19 remaining plaintiffs had settled her case and would be dismissing her appeal. The dismissal has since been entered, leaving 18 plaintiffs/appellants.

3 of defendants’ misrepresentations, omissions, and acts of cover-up, which were designed to obtain the plaintiffs as customers.2 Each plaintiff in each of the three cases alleged nine causes of action: (1) negligence; (2) premises liability; (3) intentional infliction of emotional distress; (4) sexual battery (Civ. Code, § 1708.5); (5) violation of the Ralph Civil Rights Act of 1976 (Ralph Act, Civ. Code, § 51.73); (6) negligent misrepresentation; (7) fraud, intentional misrepresentation, concealment, false promise; (8) violation of the Consumers Legal Remedies Act (CLRA, Civ. Code, § 1750 et seq.); and (9) fraudulent and unfair business practices in violation of the unfair competition law (UCL, Bus. & Prof. Code, § 17200 et seq.). Demurrers and Judgments Defendants demurred to the complaints based on the then-applicable statutes of limitations. They contended that plaintiffs’ claims for negligence, premises liability, intentional infliction of emotional distress, sexual battery, and negligent misrepresentation were subject to a two-year limitations period governing “[a]n action for assault, battery, or injury . . . caused by the wrongful act or neglect” (Code Civ. Proc.,4 § 335.1), and that the Ralph Act

2 The three operative complaints are lengthy: one is 170 pages long, one is 100 pages, and one is 34 pages. In their appellate briefs, to the limited extent plaintiffs cite to specific allegations in the complaints, they rely primarily on just one of the three complaints. Plaintiffs assert that “identical or similar passages may be found” in the other complaints, but they do not provide citations to those passages by page number, as they are required to do by rule 8.204(a)(1)(C) of the California Rules of Court. 3 The Ralph Act sets forth “the right to be free from any violence, or

intimidation by threat of violence, committed against their persons” on account of their sex. (Civ. Code, §§ 51.7, subd. (b)(1); 51, subd. (b).) 4 All statutory references are to the Code of Civil Procedure unless

otherwise stated.

4 claims were subject to a three-year limitations period (§ 338, subd. (n); see also Civ. Code, § 52.4, subds. (b) & (c)), as were the claims for fraud (§ 338, subd. (d)) and violation of the CLRA. (Civ. Code, § 1783). Defendants argued that the longest applicable statute of limitations was four years, for claims of fraudulent and unfair business practices (Bus. & Prof. Code, § 17208), and that because each of the plaintiffs was allegedly assaulted more than four years before the actions were filed, the statutes had run and the claims were time-barred.5 After complicated pretrial proceedings not relevant for our purposes, case management orders were issued that sustained all of defendants’ demurrers without leave to amend on the basis of the applicable statutes of limitations.6 Judgments were entered in favor of defendants, and plaintiffs timely appealed.7 While this appeal was being briefed, plaintiffs dismissed their appeals as to Massage Envy Franchising, LLC, leaving only the franchisees as respondents.

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Bluebook (online)
Doe v. CFR Enterprises, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/doe-v-cfr-enterprises-inc-calctapp-2023.