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JON DAGGETI, ESQ.lSBN: 227375 DEAN SCHIRMER, ESQ.lSBN: 146407 HIROSHIMA, JACOBS, ROTH and LEWIS 1420 River Park Drive, Second Floor Sacramento, CA 95815 Telephone: (916) 923-2223 Facsimile: (916) 929-7335 Attorneys for Defendant, RICARDO GRAHAM

~PER1~w1rR\W
SEP 222011
M. Gibson

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SUPERIOR COURT OF CALIFORNIA

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COUNTY OF RIVERSIDE JEFFRY M. KAATZ, JAMES W. BEACH, and GARY L. BRADLEY, Plaintiff, Case No.: RIC

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1112557

RICARDO GRAHAM'S NOTICE OF DEMURRER TO PLAINTIFF'S COMPLAINT

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v.
RICARDO GRAHAM; PACIFIC UNION CONFERENCE OF SEVENTH-DAY ADVENTISTS, a not-far-profit corporation; DANIEL R. JACKSON; LARRY BLACKMER; NORTH AMERICAN DIVISION CORPORATION OF SEVENTH-DAY ADVENTISTS, a not-far-profit corporation; and LA SIERRA UNIVERSITY, a not-for profit corporation; and DOES 1-100, Defendants. TO EACH PARTY AND TO COUNSEL To JEFFRY attorney of record.

Date: , 1\ Time:O)~lJOo.(
Dept:

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OF RECORD FOR EACH PARTY: and his

M. KAATZ, JAMES W. BEACH and GARY L. BRADLEY, • .

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day of

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NOTICE IS HEREBY GIVEN that on the~

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2011, at
of

a.m. 'or as soon thereafter as the matter can be heard in DepartmenQ court, located at 4050 Main Street, Riverside, CA 92501, defendant

the above-entitled

will
-1-

RICARDO GRAHAM'S NOTICE OF DEMURRER TO PLAINTIFF'S COMPLAINT

move for an order demurring to the plaintiffs' Complaint on the grounds set forth below. 2 3 4 5 6 7 8 9 Defendant files this Demurrer on the following grounds: 1. As to the First, Second, Third, Fourth, Fifth, Ninth, Tenth, Eleventh, Twelfth and Thirteenth causes of action, the Defendant Ricardo Graham cannot be personally held liable for monetary damages to the plaintiff caused by his actions as chairman of the board of trustees at La Sierra University pursuant to corp. Code §9247. 2. As to the Ninth Cause of Action, defendant states that the plaintiffs have failed to plead sufficient "outrageous conduct to bring a cause of action for intentional infliction of emotional distress 3. As to the Eleventh Cause of Action defendant contends that the plaintiffs action for violation of Business and Professions code §17200 is not applicable as to any defendant in this matter. 4. As to the First Cause of Action the defendant Ricardo Graham cannot be held personally liable for wrongful termination of plaintiffs as he was not the employer of the plaintiffs and individual defendants may not be held liable under a wrongful

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termination in violation of public policy cause of action. 5. As to the Second, Third, Fourth and Fifth Causes of Action the defendant was not in privity of contract with the plaintiffs and thus could not have breached the employment contracts between the plaintiffs and LSU. The Motion is based upon this Notice of Motion and Motion, the memorandum of points and authorities, all pleadings and papers on file herein, all matters of which this court must or may take judicial notice, and upon such other evidence and argument as

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III III II I III III III
RICARDO GRAHAM'S NOTICE OF DEMURRER TO PLAINTIFF'S COMPLAINT -2-

the court deems just and proper.

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Dated: September 22, 2011

BY:_

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(ROSHIM / SBN 50758 AN SCHIRMER / SBN 146409 JON DAGGETT / SBN 227375 HIROSHIMA, JACOBS, ROTH and LEWIS 1420 River Park Drive, Second Floor Sacramento, California 95815 Telephone: (916) 923-2223 Facsimile: (916) 929-7335 Attorneys for Defendant, Ricardo Graham

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RICARDO GRAHAM'S

NOTICE OF DEMURRER TO PLAINTIFF'S

COMPLAINT

-3-

2 3

4
5

JON DAGGETT, ESQ.lSBN: 227375 DEAN SCHIRMER, ESQ.lSBN: 146407 HIROSHIMA, JACOBS, ROTH and LEWIS 1420 River Park Drive, Second Floor Sacramento, CA 95815 Telephone: (916) 92.3-2223 Facsimile: (916) 929-7335 Attorneys for Defendant, RICARDO GRAHAM

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SUPERIOR

COURT OF CALlFORNIA

----~--M. Gibson
1112557

SEP 222011

COUNTY OF RIVERSIDE

JEFFRY M. KAATZ, JAMES W. BEACH, and GARY L. BRADLEY, Plaintiff,

Case No.: RIC

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v.
RICARDO GRAHAM; PACIFIC UNION CONFERENCE OF SEVENTH-DAY ADVENTISTS, a not-for-profit corporation; DANIEL R. JACKSON; LARRY BLACKMER; NORTH AMERICAN DIVISION CORPORATION OF SEVENTH-DAY ADVENTISTS, a not-for-profit corporation; and LA SIERRA UNIVERSITY, a not-for profit corporation; and DOES 1-100, Defendants.

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF RICARDO GRAHAM'S NOTICE OF DEMURRER TO PLAINTIFF'S COMPLAINT D.ate: Time: Dept:

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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF RICARDO GRAHAM'S NOTICE OF DEMURRER TO PLAINTIFF'S COMPLAINT -i-

TABLE OF CONTENTS

2 3 4
5 6 7 III.

I.
II.

INTRODUCTION DEFENDANT RICARDO LIABLE FOR MONETARY ACTIONS AS CHAIRMAN UNIVERSITY PURSUANT

1 GRAHAM CANNOT BE PERSONAllY HELD DAMAGES TO THE PLAINTIFF CAUSED BY HIS OF THE BOARD OF TRUSTEES AT lA SIERRA TO CORP. CODE §9247 2

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PLAINTIFFS FAIL TO PLEAD SUFFICIENT "OUTRAGEOUS CONDUCT" TO BRING A CAUSE OF ACTION FOR INTENTIONAL INFLICTION OF EMOTiONAL DlSTRESS 5 BUSINESS AND PROFESSIONS CODE §17200 IS NOT APPLICABLE TO ANY DEFENDANT IN THIS MATTER. DEFENDANT RICARDO GRAHAM CANNOT BE HELD LIABLE FOR WRONGFUL TERMINATION OF PLAINTIFFS AS 8

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IV.

V.

PERSONAllY 10

VI.

PLAINTIFFS SECOND, THIRD, FOURTH AND FIFTH CAUSES OF ACTION FOR BREACH OF CONTRACT AND THE CONVENANT OF GOOD FAITH AND FAIR DEALING MUST BE DISMISSED AS THEIR WAS NO PRIVITY OF CONTRACT BETWEEN DEFENDANT RICARDO GRAHAM AND THE PlAINTIFFS 12 CONClUSION 15

VII.

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MEMORANDUM OF POINTS AND AUTHORITIES OF DEMURRER TO PLAINTIFF'S COMPLAINT IN SUPPORT OF RICARDO GRAHAM'S NOTICE -ii-

TABLE OF AUTHORITIES 2 CASES Alcorn v. Anbro Engineering, Co., Inc. (1970) 2 CaL3d 493, 499, n. 5; Bogard v. Employer's Cas. Co. (1985) 164 CaLApp.3d 602, 617 Buckley v. Gray (1895) 110 Cal. 339,42 P. 900, 52 Am. Sf. Rep. 88, 31 A.L.R. 862 Cole v. Fair Oaks Fire Protection Dist. (1987) 43 Cal.3d 148, 155, n. 7; Curran v. Mount Diablo Counsel of the Boy Scouts (1998) 17 Cal.4th 670 Davidson v. City ofWesminster 32 CaL3d 197, 209 (1982) 5

Pagels)
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4 5

6 7 8 9 10 11 12
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12,13

5, 6

9, 10

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Deaile v. Gen. Tele. Co. of Cal. (1974) 40 Cal.App.3d 841, 847 Doe v. Caliornia Lutheran High School Assn. (2009) 170 Cat.App.c" 828, 833 EEOC v. Catholic University of America (D.C.Cir.1996) 83 F.3d 455 Golden v. Dungan (1971) 20 Cal.App.3d 295, 308 Grimes v. Carter (1966) 241 CaLApp.2d 694, 699 Hart v. Cult Awareness Network (1993) 13 Cal.App.4th 777 Jacobs v. Universal Dev. Corp. (1997) 53 Cal.AppAth 692, 704 Kelly v. General Tel. Co. (1982) 136 Cal.App.3d 278, 285

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MEMORANDUM OF POINTS AND AUTHORITIES OF DEMURRER TO PLAINTIFF'S COMPLAINT

IN SUPPORT OF RICARDO GRAHAM'S

NOTICE -iii-

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Khajavi v. Feather River Anesthesia Med. Group (2000) 84 CaLApp.4th 32 Mickel v. Murphy (1957) 147 CaLApp.2d 718, 905 P.2d 993 Ochoa v. Superior Court (1985) 39 Cal.3d 159, 165 Ohmart v. Citizens' Say. & Trust Co. (1924) 82 Ind.App. 219,145 N.E. 577 Perati v. Atkinson (1963) 213 CaLApp.2d 472, 474 Phoenix Title & Trust Co. v. Continental Oil Co. (1934) 43 Ariz. 219, 29 P.2d 1065, 1069-1071 Pitman v. City of Oakland (1988) 197 Cal.App.3d 1037, 1047 Ricard v.Pacific Indemnity Co. (1982) 132 Cal.App.3d 866, 894 Ultramares Corp. v. Touche (1931) 255 N.Y. 170, 174 N.E. 441, 74A.L.R.

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1139

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Weinbaum v. Goldfarb, Whitman & Cohen (1996) 46 Cal.App.4th 1310, 1315 Williams v. Coombs (1986) 179 CaLApp.3d 626, 645-46

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MEMORANDUM OF POINTS AND AUTHORITIES OF DEMURRER TO PLAINTIFF'S COMPLAINT IN SUPPORT OF RICARDO GRAHAM'S NOTICE

STATUTES Business and Professions Code Civil Code: Corporations Code: Section 17200 Section 47(c) Section 911 0 Section 9247

Pagels)
8,9, 10M 8 3 1, 2

-iv-

OTHER AUTHORITY 2 3 4 Cf. Prosser, Torts (2d ed. 1955) §§ 36, 88, 107, pp. 168, 172 544-545, 747 2 Harper and James, Torts (1956) § 18.6, p. 1052

Pagels)

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MEMORANDUM OF POINTS AND AUTHORITIES OF DEMURRER TO PLAINTIFF'S COMPLAINT IN SUPPORT OF RICARDO GRAHAM'S NOTICE

-v-

I. 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 INTRODUCTION Plaintiffs' Complaint requests the court's intervention into issues that are purely ecclesiastical in concern. Specifically, the Plaintiffs' wish the court to determine how the Seventh-day Adventist Church organizations other and accomplish their religious mission. are to be governed, interact with each However, the First Amendment of the

United States Constitution bars such actions by the courts. Admissions in the Plaintiffs' Complaint reveal the fundamental problem that

justified asking Plaintiffs to resign from their leadership roles at La Sierra University (hereinafter referred to as "LSU"), which is that Plaintiffs believe LSU's interests conflict with the Seventh-day Adventist Church and its representatives, Ricardo Graham. including defendant

However, Plaintiffs fail to adequately inform the court that LSU was Adventist Church which includes the North American

founded by the Seventh-day

Division of Seventh-day Adventists (hereinafter referred to as "NAD") and the Pacific Union Conference promote Adventism's of Seventh-day Adventists (hereinafter referred to as "PUC") to

religious and educational goals.

In truth, it is Plaintiffs who have

a conflict of interest with both LSU and the Seventh-day Adventist Church. By the filing of the Complaint and review of the causes of action therein, it is evident that plaintiffs believe that they should decide what is best for the Church rather than its chosen leadership such as defendant, Ricardo Graham, who they accuse of breaching his

fiduciary duty to LSU. However, as will be explained below, cases construing the First Amendment of the Constitution clearly prohibit courts from doing exactly what Plaintiffs are asking this court to do: adjudicate who should lead a religious organization dictate how those religious organizations should govern themselves. Federal and State governments recognize the need to abide by the true and

meaning of the First Amendment and have passed numerous laws regarding the exact nature of the meaning of "separation of Church and State", including California

Corporations Code §9247 and the development of the "ministerial exception".
MEMORANDUM OF POINTS AND AUTHORITIES OF DEMURRER TO PLAINTIFF'S COMPLAINT IN SUPPORT OF RICARDO GRAHAM'S NOTICE -1-

II. 2 3 4 DEFENDANT RICARDO GRAHAM CANNOT BE PERSONALLY HELD LIABLE FOR MONETARY DAMAGES TO THE PLAINTIFF CAUSED BY HIS ACTIONS AS CHAIRMAN OF THE BOARD OF TRUSTEES AT LA SIERRA UNIVERSITY PURSUANT TO CORP. CODE §9247. The specific provisions relating to indemnification of volunteer directors and

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officers of nonprofit religious corporations are set forth in Corp. Code § 9247, which states:

§ 9247. Personal liability of volunteer director or volunteer executive officer
(a) There shall be no personal liability for monetary damages to a third party on the part of a volunteer director or volunteer executive officer of a nonprofit corporation subject to this part, caused by the director's or officer's negligent act or omission in the performance of that person's duties as a director or officer, if all of the following conditions are met: (1) The act or omission was within the scope of the director's or executive officer's duties. (2) The act or omission was performed in good faith. (3) The act or omission was not reckless, wanton, intentional, or grossly negligent. (4) Damages caused by the act or omission are covered pursuant to a liability insurance policy issued to the corporation, either in the form of a general liability policy or a director's or officer's liability policy, or personally to the director or executive officer. In the event that the damages are not covered by a liability insurance policy, the volunteer director or volunteer executive officer shall not be personally liable for the damages if the board of directors of the corporation and the person had made all reasonable efforts in good faith to obtain available liability insurance. (b) "Volunteer" means the rendering of services without compensation. "Compensation" means remuneration whether by way of salary, fee, or other consideration for services rendered. However, the payment of per diem, mileage, or other reimbursement expenses to a director or executive officer does not affect that person's status as a volunteer within the meaning of this section. (c) "Executive officer" means the president, vice president, secretary, or treasurer of a corporation, or other individual serving in like capacity, who assists in establishing the policy of the corporation. (d) Nothing in this section shall limit the liability of the corporation for any damages caused by acts or omissions of the volunteer director or volunteer
MEMORANDUM OF POINTS AND AUTHORITIES OF DEMURRER TO PLAINTIFF'S COMPLAINT IN SUPPORT OF RICARDO GRAHAM'S NOTICE -2-

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executive officer. 2 (e) This section does not eliminate or limit the liability of a director or officer for any of the following: (1) As provided in Section 9243 or 9245. (2) In any action or proceeding brought by the Attorney General. (f) Nothing in this section creates a duty of care or basis of liability for damage or injury caused by the acts or omissions of a director or officer. (g) This section is only applicable to causes of action based upon acts or omissions occurring on or after January 1, 1988. As can be seen above, volunteer directors and volunteer executive officers of nonprofit corporations subject to the Nonprofit Religious Corporation Law (Corp. Code

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§ 9110 et seq.) are not personally liable for monetary damages to third parties caused
by the director's or officer's negligent act or omission in the performance of his or her duties as a director or officer committed after January 1, 1988, if all of the following are true: 1) The act or omission was within the scope of the director's or officer's duties. 2) The act or omission was performed in good faith. 3) The act or omission was not reckless, wanton, intentional, or grossly negligent. 4) Damages caused by the act or omission are covered by a liability insurance policy issued to the corporation in the form of a general liability policy or a director's or officer's liability policy, or issued to the director or officer personally. In this matter, there are no allegations that the defendant Ricardo Graham acted outside the scope of his duties. While the plaintiffs do argue that the actions taken

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were not within the procedures outlined in various church handbooks, they do not state that the actions taken were not of the nature usually handled by the Chair of the Board of Trustees. The conversations with other Church Officials, including Jackson,

Blackmer and the attorneys for the Church was well within the normal duties of a Chair of the Board of Trustees, especially when the subject matter pertains to the fitness of the employees, faculty and officers of the entity he is representing.
MEMORANDUM OF POINTS AND AUTHORITIES OF DEMURRER TO PLAINTIFF'S COMPLAINT IN SUPPORT

Furthermore, the
NOTICE -3-

OF RICARDO GRAHAM'S

conversations with the plaintiffs regarding the information contained on the recording 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 and the discussion regarding their resignations were well within the duties of the Chair of the Board of Trustees. documents It should also be noted that all of the various handbooks and

referenced by the Plaintiffs do not preclude the Chair of the Board of

Trustees discussing employment issues with LSU's faculty or officers, nor accepting their resignations. terminate It is also important to note that Defendant, Ricardo Graham did not They each resigned on their own and only later argued that

the Plaintiffs.

they were wrongfully terminated. Additionally, nothing in the Complaint states that the meetings with the Plaintiff were not done in good faith. As the Chair of the Board of Trustees, it is evident that defendant had a right and was required to address the statements made on the

recording which had been disseminated to numerous parties other than the defendants in this matter. A fact not mentioned in Plaintiffs' Complaint. While the Plaintiffs argue

that some of the statements were misrepresented

to them during their meeting with

defendant Ricardo Graham, that argument is without merit. They very carefully ignore the fact that 'THEY WERE PRESENT DURING THE CONVERSATION". If anyone is

aware of the statements made during that get-together it is the Plaintiffs. Their feigned ignorance of a conversation less than two months previous in which they admit they The allegations regarding

"were heavily emotionally charged" is difficult to believe.

defendant Graham's coercive treatment is merely an attempt by the Plaintiffs to shift the blame for their inappropriate and outlandish behavior which were in clear violation of the tenets of the Seventh-day Adventist Church and LSU. The actions in this matter were not reckless, wanton, intentional, negligent. or grossly

While Plaintiffs' Complaint attempts to paint as dire a picture as possible

regarding their termination of employment or resignations, the court must look at the actual allegations of the Complaint and the conduct that underlies the Plaintiffs' causes of action. In this matter, the plaintiffs were simply confronted about the statements they made on the recording. Having been present during the recording, the Plaintiffs were
IN SUPPORT OF RICARDO GRAHAM'S NOTICE -4-

MEMORANDUM OF POINTS AND AUTHORITIES OF DEMURRER TO PLAINTIFF'S COMPLAINT

well aware of the contents of the recording and their conduct during that conversation. 2 3 4 5 6 7 The decisions they made when they were asked to resign was their decision and not that of the defendant Ricardo Graham. As stated in the Complaint, defendant Graham was not going to terminate them if they failed to resign, he simply stated that it was to be brought to the Board of Trustees, who would then make their decision. Lastly, the entity for which the defendant, services for does have Liability Insurance. III. PLAINTIFFS FAIL TO PLEAD SUFFICIENT "OUTRAGEOUS CONDUCT" TO BRING A CAUSE OF ACTION FOR INTENTIONAL iNFLICTION OF EMOTIONAL DISTRESS Defendant Ricardo Graham has already filed a joinder to the demurrer of the defendants LSU, PUC and NAD regarding the ninth cause of action for Intentional Ricardo Graham volunteered his

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Infliction of Emotional Distress. However, the defendant Ricardo Graham believes that additional facts should be raised. To allege a claim for intentional infliction of emotional distress ("liED") a plaintiff must plead facts that establish the following elements: (1) extreme and outrageous conduct; (2) intention to cause emotional distress or reckless disregard of the

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probability of causing emotional distress; (3) severe emotional suffering; and (4) actual and proximate causation of the emotional distress. (Cole v. Fair Oaks Fire Protection Dist. (1987) 43 Cal.3d 148, 155, n. 7; Alcorn v. Anbro Engineering Co., Inc. (1970) 2 Cal.3d 493, 499, n. 5.) To state an liED claim, a plaintiff must plead and prove with great specificity acts that are "outrageous." Courts have defined this as conduct so

"extreme as to exceed all bounds of that usually tolerated in a civilized community." (Ricard v. Pacific Indemnity Co. (1982) 132 Cal.App.3d 886, 894). Whether the conduct can be found to be outrageous is a question of law that the court must initially determine at the pleading stage. (Alcorn v. Anbroo Engineering, Inc. (1970) 2 Cal.3d 493, 499.) "Outrageous" conduct is that which is "so extreme as to

exceed all bounds of that usually tolerated in a civilized community." (Davidson v. City
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF RICARDO GRAHAM'S NOTICE OF DEMURRER TO PLAINTiFF'S COMPLAINT -5-

of Westminster (1982) 32 Cal.3d 197,209.)

The California Supreme Court in Ochoa v.

2 3 4
5

Superior Court (1985) 39 Cal.3d 159, 165, stated: "A cause of action for intentional infliction of emotional distress must allege facts showing outrageous conduct which is intentional and which is especially calculated to cause ... mental distress of a very serious kind." The alleged conduct here is neither "outrageous" nor especially calculated to cause either plaintiff emotional distress as required by Ochoa. As summarized above, the Seventh-day Adventist leaders became aware, from third parties, of a recording of Plaintiffs' conversation where Plaintiffs were, according to admissions in the Complaint, "very critical" of Seventh-day Adventist church leaders' handling of the Adventist has deviated from the philosophy and

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Accrediting Agency's conclusion that LSU ...

objectives of Seventh-day Adventist education." (Complaint, 1[83, p.16, and 1[cn 84-92.) The recording also revealed that Plaintiffs were consuming alcohol during that

Conversation, which is inconsistent with Seventh-day Adventist teachings. It is neither unusual nor outrageous that a church's leaders who became aware that leaders in a church ministry disagree with church leaders and teachings would be concerned about that and feel the need to discuss it. Nor is it outrageous that if the church leaders disqualified Plaintiffs

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thought the "very critical" comments and alcohol consumption from their leadership Plaintiffs and spare

roles at LSU, the church leaders might want to counsel with them, LSU and the church the embarrassment of formal

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disciplinary proceedings. The Complaint alleges that Plaintiffs resigned and impliedly admits that Graham acknowledged that only the board of trustees could fire Plaintiffs. (See Complaint 1[1[46, 51, 53, 54-58.) Plaintiffs concede that Graham told plaintiffs Kaatz and Beach that if they chose not to resign he would "... call a special meeting of the Board of Trustees the following week and have them fired." Significantly, plaintiffs do not allege Graham threatened to have Bradley fired. (Ibid.) Obviously, if Graham were intending to fire Kaatz and Beach he would not have told them a special meeting with the board was going to be necessary. Also, obviously, if Kaatz and Beach thought they had done nothing wrong they could have waited until the next week and presented
MEMORANDUM OF POINTS AND AUTHORITIES OF DEMURRER TO PLAINTIFF'S COMPLAINT IN SUPPORT OF RICARDO GRAHAM'S NOTICE -6-

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their case to the board. Instead of facing possible discipline, Plaintiffs chose to resign. 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Accordingly, Plaintiffs have not alleged sufficient facts to establish that

Defendant Graham's conduct was "outrageous" as a matter of law. Such conduct did not exceed all bounds tolerated in a civilized community. It was merely a meeting

between an employer and its employees regarding the employees' bad conduct. As such, this demurrer must be sustained without leave to amend. In addition to the failure to plead facts that establish outrageous conduct, the cause of action must also fail because Plaintiffs have not pleaded the requisite facts establishing experienced the nature and extent of the severe emotional suffering allegedly infliction of

by them.

In pleading a cause of action for intentional

emotional distress, the plaintiff must state facts explaining the nature and extent of any alleged mental suffering. (Bogard v. Employer's Cas. Co. (1985) 164 Cal.App.3d 602, 617.) Mere conclusory allegations without facts indicating the nature or extent of any mental suffering incurred as a result of the defendants' alleged "outrageous conduct" are insufficient to maintain a claim for intentional infliction of emotional distress.

(Pitman v. City of Oakland (1988) 197 Cal.App.3d 1037, 1047.) Here, Plaintiffs simply claim that they suffered "severe emotional distress, including humiliation,

embarrassment, (Complaint at

and mental anguish, associated with the loss of one's life work ...." This allegation is fatally deficient in stating a cause of action for

11 181.)

intentional infliction of emotional distress. Additionally, in cases where the plaintiff sustained no physical harm, the courts

have held that the intentional acts must be even more extreme and outrageous than otherwise, as an assurance that the mental disturbance claimed is not fictitious.

(Golden v. Dungan (1971) 20 Cal.App.3d

295, 308; Grimes v. Carter (1966) 241

Cal.App.2d 694, 699; Perati v. Atkinson (1963) 213 Cal.App.2d 472, 474.) Plaintiff must also plead facts showing the Church Defendants' conduct was not privileged. (Bogard v. Employers Casualty Co. (1985) 164 Cal.App.3d 602,616-617.) alleging that the Church Defendants' communications Plaintiffs seem to be

about Darnell's recording were

MEMORANDUM OF POINTS AND AUTHORITIES iN SUPPORT OF RICARDO GRAHAM'S NOTICE OF DEMURRER TO PLAINTIFF'S COMPLAINT -7-

outrageous. 2 3 4 5 6 7 8 Church with

However, an employer has a privilege to communicate, without who have a "common interest" in the subject matter

malice, of the

persons

communication.

(Civil Code, § 47, subd. (c).) A communication is qualifiedly privileged

when made "without malice" and "to a person interested therein" by any of the following circumstances: (1) common interest; (2) special relationship; and (3) request for

information. The Complaint admits that at least the first two of those facts apply here. The crux of Plaintiffs allegations Defendants' constitutionally regarding their liED claim arises from the governance decisions and related

privileged

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communications. thereby

Plaintiffs cannot relabel the cause of action as one for liED and bar. (See, Williams v. Coombs (1986) 179

avoid the First Amendment's

Cal.App.3d 626, 645-46 [a cause of action for liED cannot be maintained where the alleged outrageous conduct is a privileged communication].) The common-interest privilege applies to the work place and employers. For

example, Civil Code section 47(c) and the associated

case law provide a qualified

privilege to an employer who publishes to certain of its employees the reasons for the termination of another employee. of Cal. (1974) 40 Cal.App.3d employees (See Civ. Code § 47(c) and Deaile v. Gen. Tele. Co. 841, 847.) "Communication among a company's

that is designed to insure honest and accurate records involves . . . a In the

common interest." (Kelly v. General Tel. Co. (1982) 136 Cal.App.3d 278, 285.)

instant matter, each defendant had a common interest in the subject matter of the communication.

IV.
BUSINESS AND PROFESSIONS CODE §17200 IS NOT APPLICABLE DEFENDANT IN THIS MATTER. Additionally, defendant Ricardo Graham AS TO ANY

has already filed a joinder

to the

demurrer of the defendants LSU, PUC and NAD regarding the eleventh cause of action for Violation of Business and Professions Code Section 17200 et. seq. defendant Ricardo Graham believes that additional facts should be raised.
MEMORANDUM OF POINTS AND AUTHORITIES OF DEMURRER TO PLAINTIFF'S COMPLAINT IN SUPPORT OF RICARDO GRAHAM'S NOTICE -8-

However, the

The 2 3 employment

threshold

inquiry

is

whether

a

non-profit/religious

organization's of

action qualifies as a "business act or practice" within the meaning

Section 17200.

In Doe v. California Lutheran High School Assn. (2009) 170 Cal.App. ("the

44th 5 6

828, 833 the plaintiffs sued the California Lutheran High School Association School"), which owned and operated a private religious high school. plaintiffs

It expelled

Jane Doe and Mary Roe on the ground that they had a homosexual

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relationship, in violation of the School's "Christian Conduct" rule. The plaintiffs asserted three causes of action solely against the School: Sexual orientation discrimination in

violation of the Unruh Civil Rights Act; gender discrimination in violation of the Unruh Civil Rights Act; and unfair business practices (Bus. & Prof. Code, § 17200). The trial court entered summary judgment in favor of defendants, ruling, in part, that the School was not a "business enterprise" and therefore not subject to the Unruh Civil Rights Act. (There is no discussion of section 17200.) The Court of Appeal affirmed and held that Curran v. Mount Diablo Council of the Boy Scouts (1998) 17 Cal.4th 670, was controlling. The Court of Appeal

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acknowledged similarities between the two cases. "Just like the Boy Scouts, the School 'is an expressive social organization whose primary function is the inculcation of values in its youth members.'" (Doe, supra, 170 Cal.AppAth at 838 [quoting Curran, supra, at

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699.) The Court also cited to the opinion of the Attorney General: The California Attorney General has opined that, under Curran, the admission decisions of a private religious school are not subject to the Unruh Civil Rights Act. (81 Ops.CaI.Atty.Gen. 189 (1998).) His opinion states: "[A] private nonprofit religious school has as its 'overall purpose and function' the education of children in keeping with its religious beliefs. The 'inculcation of a specific set of values,' with programs 'designed to teach the moral principles to which the [school] subscribes,' prevents such a school from being considered a 'business establishment' whose student admission practices would be subject to the Act." (Id. at p. 195, fn. omitted.) We agree. (Doe, supra, 170 Cal.AppAth at 839.) Since a private religious high school is not a "business enterprise" enterprise under the Unruh Civil Rights Act, it follows that the pleadings here fail to establish La
MEMORANDUM OF POINTS AND AUTHORITIES OF DEMURRER TO PLAiNTIFF'S COMPLAINT IN SUPPORT OF RICARDO GRAHAM'S NOTICE -9-

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Sierra University

was engaged

in a "business

act or practice"

actionable

under

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Business & Professions Code section 17200. In Curran v. Mount Diablo Council of Boy Scouts 1998) 17 Cal.4th 670, 720, the California Supreme Court held the Unruh Act did not apply to the Boy Scouts because the Boy Scouts are not a "business

establishment." The Supreme Court held that the Unruh Act only applies to "proprietorpatron relationships which involve the providing of goods or services, non-gratuitously, for a price or fee ... " (Ibid.) In Hart v. Cult Awareness Network (1993) 13 Cal.App.4th 777, the Court of

Appeal held that a nonprofit religious organization established to educate the public about the harmful effects of cults is not a business establishment for purposes of the Unruh Act. The court explained that "'the statute does not govern relationships which are truly private ... those which are "continuous, personal, and social" [citation] and

take place more or less outside "public view." [Citation.]'" (ld. at p.786.) The court also recognized that if it deemed the organization a business establishment within the

meaning of the Unruh Act, it might have the effect of interfering with the organization's freedoms of private and expressive association. (Id. at pp.787 -793.) (See, also, EEOC v. Catholic University of America (D.C.Cir.1996) 83 F.3d 455 where the court held that allowing a sex discrimination claim brought by a nun against a Catholic university for rights

denying her faculty tenure would infringe upon the University's constitutional under both the free exercise Constitution. ) of religion and establishment clauses

of the U.S.

v.
DEFENDANT RICARDO GRAHAM CANNOT BE HELD PERSONAllY WRONGFUL TERMINATION OF PLAINTIFFS California case law provides that individual defendants LIABLE FOR

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cannot be held liable

under a wrongful termination in violation of public policy cause of action. "As a matter of law, only an employer can be liable for the tort of wrongful discharge in violation of public policy." (Khajavi v. Feather River Anesthesia Med. Group (2000) 84 Cal.App.4th
MEMORANDUM OF POINTS AND AUTHORITIES OF DEMURRER TO PLAINTiFF'S COMPLAINT IN SUPPORT OF RICARDO GRAHAM'S NOTICE -10-

32; citing Weinbaum v. Goldfarb, Whitman & Cohen (1996) 46 Cal.AppAth 2 3 4 5 6 7 8 9 10 11 12

1310, 1315

("there is nothing in Foley or in any other case we have found to suggest that this tort imposes a duty of any kind on anyone other than the employer"); see Jacobs v.

Universal Dev. Corp. (1997) 53 Cal.AppAth 692, 704 ("only an employer can be liable for tortious discharge").) The rationale behind such a rule is clear: "the duty on which relationship, and the breach of (Weinbaum, 46

the tort is based is a creature of the employer-employee that duty is the employer's Cal.AppAth at 1315.)

improper discharge of an employee."

The case of Weinbaum v. Goldfarb, Whitman & Cohen (1996) 46 Cal. App. 4th 1310, 54 Cal. Rptr. 2d 462, concerned complaint they were fired because they plaintiff employees refused to prepare who alleged in their and

false financial

accounting reports for their employer. The plaintiffs alleged various causes of action against their employer, including one for wrongful termination policy. They also alleged a cause of action against third in violation of public party defendants for

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"conspiracy to wrongfully terminate in violation of public policy and aiding and abetting thereof." The third party defendants demurred to this conspiracy cause of action on the ground plaintiffs Finding did not and could not state a cause sustained of action against them.

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that the trial court properly

the third party defendants'

demurrer without leave to amend, the Weinbaum court held that third parties cannot commit the tort of wrongful discharge in violation of public policy because they are not subject to the duty on which the tort is based. Regarding the nature of that duty, the Weinbaum court cited to Foley, where the Supreme Court had observed that a

discharge of an employee in violation of public policy is deemed wrongful because employers have an implied-in-law duty to manage their businesses in accordance with public policy. Noting that this duty arises necessarily from the relationship between an employer and an employee, the Weinbaum court stated: "Because tort liability arising from conspiracy presupposes that the coconspirator the tort (because is legally capable of committing by law and is thus
GRAHAM'S NOTICE -11-

he owes a duty to the plaintiff recognized

MEMORANDUM OF POINTS AND AUTHORITIES OF DEMURRER TO PLAINTIFF'S COMPLAINT

IN SUPPORT OF RICARDO

potentially subject to liability for a breach of that duty), we hold that a third party who is 2 3 4 5 6 7 8 9 not (and never was) the plaintiffs employer cannot be liable for conspiracy to

wrongfully terminate the plaintiffs employment in violation of public policy." (Weinbaum v. Goldfarb, Whitman & Cohen, supra, 46 Cal. App. 4th at p. 1315, fn. omitted.) The court stated it had found "nothing in Foley or in any other case ... to suggest that this

tort imposes a duty of any kind on anyone other than the employer," and it knew of no law which "supports[s] the notion that anyone other than the employer can discharge an employee." (Ibid.) In this matter, it is evident that defendant, Ricardo Graham was not the

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employer of the Plaintiffs.

Defendant's position as President of PUC or Chairman of

the Board of LSU did not make him the employer of Plaintiffs under any of the above theories of liability. Based upon the above, it is evident that Defendant, Ricardo

Graham should be dismissed from Plaintiffs' First Cause of Action as well as those causes of action related to the wrongful termination, specifically the Second, Third,

Fourth and Fifth Causes of Action which all attempt to impute personal liability on the defendant Ricardo Graham for the alleged wrongful termination of the plaintiffs.

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VI.
PLAINTIFFS SECOND, THIRD, FOURTH AND FIFTH CAUSES OF ACTION FOR BREACH OF CONTRACT AND THE COVENANT OF GOOD FAITH AND FAIR DEALING MUST BE DISMISSED AS THEIR WAS NO PRIVITY OF CONTRACT BETWEEN DEFENDANT RICARDO GRAHAM AND THE PLAINTIFFS In this instance it is evident that the defendant, Ricardo Graham was not a

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signatory or party to the employment contract between the plaintiffs and the defendant La Sierra University. this defendant contracts. As such, there was no privity of contract between the parties and

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cannot be liable for the alleged breach of the plaintiffs' employment

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The principal question is whether defendant was under a duty to exercise

due care to protect plaintiffs from injury and was liable for the damages caused to plaintiffs by his alleged negligence even though they were not in privity of contract. In

Buckley v. Gray (1895), 110 Cal. 339, 42 P. 900, 52 Am.St.Rep. 88, 31 A.L.R. 862, it
MEMORANDUM OF POINTS AND AUTHORITIES OF DEMURRER TO PLAINTIFF'S COMPLAINT IN SUPPORT OF RICARDO GRAHAM'S NOTICE -12-

was held that a person who was named as a beneficiary under a will could not recover 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 damages from an attorney who negligently drafted and directed the execution of the will with the result that the intended beneficiary was deprived of substantial benefits. The court based its decision on the ground that the attorney owed no duty to the beneficiary because there was no privity of contract between them. (1957) 147 Cal.App.2d 718,305 Mickel v. Murphy

P.2d 993, relying on Buckley v. Gray, supra, held that

a notary public who prepared a will was not liable to the beneficiary for failing to have it properly executed. When Buckley v. Gray, supra, was decided in 1895, it was

generally accepted that, with the few exceptions noted in the opinion in that case, there was no liability for negligence absence of privity. In a nut shell the plaintiffs are alleging that the defendant breached their employment agreements by requesting Ricardo Graham committed in the performance of a contract in the

that they resign from their Courts have

positions and by accepting said resignations when the plaintiffs' agreed.

held that imposition of liability for injuries to intangible interests have been refused in the absence performance of privity where any potential advantage to the plaintiff from the

of the contract was only a collateral consideration

of the transaction or Ultramares

where the injury to the particular person bringing suit was not foreseeable. Corp. v. Touche, (1931) 255 N.Y. 170, 174 N.E. 441,74

A.L.R. 1139; Phoenix Title & Ohmart

Trust Co. v. Continental Oil Co., (1934) 43 Ariz. 219, 29 P.2d 1065,1069-1071; v. Citizens' Sav. & Trust Co., (1924) 82 Ind.App. 219, 145 N.E. 577.

The determination whether in a specific case the defendant will be held liable to a third person not in privity is a matter of policy and involves the balancing of various factors, among which are the extent to which the transaction was intended to affect the plaintiff, the foreseeability of harm to him, the degree of certainty that the plaintiff

suffered injury, the closeness of the connection between the defendant's conduct and the injury suffered, the moral blame attached to the defendant's conduct, and the policy of preventing future harm. (Cf. Prosser, Torts (2d ed. 1955), §§ 36, 88, 107, pp. 168,
MEMORANDUM OF POINTS AND AUTHORITIES OF DEMURRER TO PLAiNTIFF'S COMPLAINT IN SUPPORT OF RICARDO GRAHAM'S NOTICE -13-

172,544-545,747; 2 3 4 5 6 7 8 9

2 Harper and James, Torts (1956), § 18.6, p. 1052.) at

The defendant Ricardo Graham's only contact with the plaintiffs' employment

LSU was that he was the person delivering the "bad news" regarding the contents of the audio tape wherein the plaintiffs made numerous disparaging remarks regarding the school, church and its representatives. The tape contained clear indications of

conduct prohibited by the Church and behavior not in accordance with Church tenets or School policy. When confronted with the information and the option to resign from their positions by the defendant Ricardo Graham, the plaintiffs chose to resign. The fact

that it was the defendant Ricardo Graham that delivered this news is insufficient to impose liability for a breach of the plaintiffs' employment contracts. Defendant, Ricardo

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Graham was not an officer or employee of LSU, he served only as the Chairman of the Board of Trustees and was not soley responsible for making decisions regarding hiring or termination; a fact illustrated in the Complaint. Review of the Complaint will show

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that the plaintiffs' never stated in their Complaint that the defendant, Ricardo Graham had the ability to terminate them. Handbook. Additionally, the court should note that the plaintiffs have named defendant That decision was left to others per the Faculty

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Ricardo Graham in their sixth, seventh and eighth causes of action for interference with contractual relations, prospective economic advantage and inducing breach of contract; all actions reserved for third parties who are not in privity of contract with the plaintiffs. It is obvious that the plaintiffs are aware of the status of the defendant Ricardo Graham as a third party and have improperly named him in their second, third, fourth and fifth causes of actions.

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III III III III III
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF RICARDO GRAHAM'S NOTICE OF DEMURRER TO PLAINTIFF'S COMPLAINT -14-

VII. 2 3 4 Defendant Ricardo CONCLUSION Graham hereby requests that the court dismiss the

Complaint as to defendant Ricardo Graham regarding his actions as the Chairman of the Board of Trustees of LSU. Additionally, the defendant requests that the court

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grant the demurrer as to the second, third, fourth, fifth, ninth and eleventh causes of action.

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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF RICARDO GRAHAM'S NOTICE OF DEMURRER TO PLAINTIFF'S COMPLAINT -15-

Dated: September 22, 2011 B.~:· .' . :eYk?? ~ . HIL HIROSRIMA ISBN 50758 DEAN SCHIRMER ISBN 146409 JON DAGGETT ISBN 227375 HIROSHIMA, JACOBS, ROTH and LEWIS 1420 River Park Drive, Second Floor Sacramento, California 95815 Telephone: (916) 923-2223 Facsimile: (916) 929-7335 Attorneys for Defendant, Ricardo Graham

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JON DAGGETI, ESQ.lSBN: 227375 DEAN SCHIRMER, ESQ./SBN: 146407 HIROSHIMA, JACOBS, ROTH and LEWIS 1420 River Park Drive, Second Floor Sacramento, CA 95815 Telephone: (916) 923-2223 Facsimile: (916) 929-7335 Attorneys for Defendant, RICARDO GRAHAM

SEP 222011
M. Gibson

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8 SUPERIOR COURT OF CALIFORNIA COUNTY OF RIVERSIDE JEFFRY M. KAATZ, JAMES W. BEACH, and GARY L. BRADLEY, Plaintiff, Case No.: RIC 1112557 DECLARATION OF DEAN SCHIRMER IN SUPPORT OF RICARDO GRAHAM'S DEMURRER TO PLAINTIFF'S COMPLAINT

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v.
RICARDO GRAHAM; PACIFIC UNION CONFERENCE OF SEVENTH-DAY ADVENTISTS, a not-far-profit corporation; DANIEL R. JACKSON; LARRY BLACKMER; NORTH AMERICAN DIVISION CORPORATION OF SEVENTH-DAY ADVENTISTS, a not-far-profit corporation; and LA SIERRA UNIVERSITY, a not-for profit corporation; and DOES 1-1 ~O, Defendants. I, DEAN SCHIRMER declare:

Date: Time:
Dept:

Cf_'

tl~'ODa 01/

·fll

F!LED BY FAX

'-'R'-' i: Ie:: ""'0 v. '_'" (,~;.

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1.

I am a member of the law firm of Hiroshima, Jacobs, Roth and Lewis.

am an attorney at law duly licensed to practice in all courts in the State of California, as a member of the State Bar of California, and am sufficiently familiar with the file and the matters stated herein.

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DEC LARA TION OF DEAN SCHIRMER IN SUPPORT OF RICARDO GRAHAM'S DEMURRER TO PLAINTIFF'S COMPLAINT -1-

2. 2 3 4

Initially, counsel for Defendant Ricardo Graham did not attempt to meet

and confer regarding this instant Demurrer as it concerns the same causes of action and many of the same arguments as the Demurrers filed by co-defendants University, Pacific Union Conference and North American Division.
3.

La Sierra

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Plaintiffs failure to amend their Complaint prior to the filing of the co-

defendants La Sierra University, Pacific Union Conference of Seventh-day Adventists and North American Division of Seventh-day Adventists demurrers and motion to strike shows an unwillingness on the part of the plaintiffs to acknowledge the defects in their Complaint and the futile nature of the meet and confer process. 4. Additionally, counsel for defendant, Ricardo Graham was only recently

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retained and have only just been able to review the Complaint fully and speak with our client in detail about the allegations. The shortened time period to respond has caused

this response to be filed on very short notice and has made it difficult for the parties to have a meaningful meet and confer discussion regarding the plaintiff's concerns. I declare under the penalty of perjury that the forgoing is true and correct and

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thatthis declaration wasexecuted on~

20Z:0'

California.

.

DEAN SCHIRMER

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DECLARATION OF DEAN SCHIRMER IN SUPPORT OF RICARDO GRAHAM'S PLAINTIFF'S COMPLAINT DEMURRER TO -2-

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