California Cases October 18, 2022: Berkery v. Grove

Case Description

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NOT TO BE PUBLISHED

(Super. Ct. No. 34-2019-00255764-CU-OE-GDS)

OPINION ON TRANSFER

HULL, Acting P. J.

In August 2018, plaintiff Kristin Berkery began providing services as an independent contractor to defendant Visit Elk Grove (VEG), pursuant to a written contract signed by Berkery and defendant John Joseph Thompson (VEG's executive director at the time). Over the next few months, Berkery rejected Thompson's romantic advances. Berkery later sued defendants, raising claims of sexual harassment (Civ. Code, § 51.9) and failure to prevent sexual harassment (Gov. Code, § 12940), among other claims.

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Civil Code section 51.9 addresses sexual harassment in relationships often arising outside of workplace environments. The statute provides a nonexclusive list of providers of professional services in connection with which sexual harassment may exist, including physicians, attorneys, and teachers. The statute also contemplates liability for sexual harassment in a "relationship that is substantially similar to" those listed.

Ultimately, the trial court here granted defendants' demurrers to Berkery's third amended complaint (TAC), and denied leave to amend, concluding that because Berkery "was providing services to VEG, rather than the other way around," her sexual harassment claim under Civil Code section 51.9 was not viable. The trial court further concluded that because the underlying sexual harassment claim was not viable, neither was the claim for failure to prevent sexual harassment.

On appeal, Berkery argues the trial court erred.

In a prior opinion, a different panel of this court indicated that it disagreed with the trial court's construction of Civil Code section 51.9, and affirmed the judgment on an alternate ground, concluding Berkery did not plead an "inability . . . to easily terminate the relationship" with defendants, a necessary element of Berkery's claim under the version of Civil Code section 51.9 that applies to this case.

Berkery sought review in the California Supreme Court, which granted review and transferred the matter to this court "with directions to vacate [the prior] decision and reconsider [the] conclusion that [Berkery] failed to plead she could not easily terminate the relationship as required by Civil Code section 59.1 in light of Paragraph 122 of the [TAC]. (Cal. Rules of Court, rule 8.528(d).)"

Neither party filed supplemental briefs after transfer. (See Cal. Rules of Court, rule 8.200(b).)

Having reconsidered the matter as directed by our Supreme Court, we conclude Berkery's TAC sufficiently alleged an inability to easily terminate her relationship with VEG. Given that conclusion, we explain our disagreement with the trial court's

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construction of Civil Code section 59.1, and reverse the dismissal on demurrer of Berkery's two sexual harassment claims.

Background

Berkery owned and operated a marketing consulting firm based in Sacramento, providing clients with "services such as strategic planning, Web design, media buying, media relations, voiceover, and event planning." In August 2018, Berkery (who had been doing business in the City of Elk Grove since 2013) signed a contract to provide her services to defendant VEG, a nonprofit entity formed by the City of Elk Grove to promote tourism within the city.

The contract provided that Berkery was an "independent contractor" who had "the sole right to control the means, manner and method by which the services" would "be performed" under the agreement. The contract further provided: either party could terminate the agreement "at any time by giving 21 days' written notice to the other party"; the written contract was "the entire [a]greement" between the parties; and the agreement could be "modified only by a writing signed by both parties."

Defendant Thompson, VEG's executive director at the time, signed the contract on VEG's behalf. Thompson communicated frequently with Berkery in the first month of the contract, including three e-mails "promis[ing] many more assignments" to Berkery.

On August 26, 2018, Thompson sent a text message to Berkery, asking permission to pose a "personal question": "Have you wondered why our paths have crossed? I have, a lot lately!" Thompson observed there were "many coincidences that . . . pulled" him and Berkery "together," and he "wanted to be honest with [Berkery] as a friend."

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Berkery was "stunned and frightened" by the text message, which she did not reply to, and was followed by another text from Thompson later that day: "Hi, I'm so sorry and very embarrassed. This was sent at a very weak moment . . . . Please accept my apology!"

The next morning, Berkery replied to Thompson: "It's all good. . . . I was really busy . . . yesterday . . . . I'm really not looking for anything right now because of all the dating challenges I've been through. Let's get to know each other and then we can see."

Subsequently, Berkery and Thompson attended "many functions" together in their professional capacities, "[s]ometimes . . . carpool[ing]" to and from the events.

On September 14, 2018, Thompson asked Berkery to go on a date with him. Berkery declined, saying." 'I don't date people I work with regularly.' "

On October 20, 2018, Thompson drove Berkery home after they attended a costume ball. While they were in the car, Thompson told Berkery that he was in love with her, and wondered how he could get Berkery to look at him the way she looked at a man that she danced with during the ball that night. Thompson asked Berkery "to explain her rejection of his advances." Berkery "felt trapped and frightened," and explained that she wanted "to be able to do [her] job" for VEG, and did not "want to date anyone" at the moment.

Several hours later, Thompson sent a text to Berkery: "Thank you for tonight! It was great being there with the hottest girl in the room! [¶] . . . [¶] I'm hurting because you are, because you're in my heart, and that will never go away!!!! That's my problem, not yours, and I'll deal with it . . . but PLEASE remember, my love for you only grows stronger everytime [ sic ] we're together. [¶] I'm only 10 minutes away and would love nothing more than to be there for you. Even just to hold you! XO [¶] Oh, and none of this means we can't work together for a very long time and be very successful. We think alike and could do great things together."

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Berkery "fear[ed] for her physical safety and that of her children. . . . Between the stress of her job and the strain of rejecting Thompson's creepy advances, she was suffering from anxiety, insomnia, headaches and constant fatigue." But she was also "afraid she might lose this important client because she didn't want a sexual relationship with Thompson."

In an October 24, 2018 phone conversation, Berkery told Thompson she did not want to date him, and" 'fe[lt] that [Thompson] repeatedly asking'" to date her was" 'putting th[e] project . . . at risk.' She said she would resign unless Thompson ceased his sexual pursuit of her."

In two November 2018 text messages (sent 11 days apart), Thompson asked Berkery to go on a date with him. Berkery declined.

A few days after she declined Thompson for the second time in November 2018, and "[b]ecause Thompson had assured her there was plenty of work for her business"- including "Elk Grove Restaurant Week," in the second half of January 2019 (Restaurant Week)-Berkery hired several subcontractors for VEG projects.

Thompson's "disorganiz[ation]" in the "chao[tic]" period leading up to Restaurant Week made Berkery "worr[y] about the viability" of the event.

On January 3, 2019, Berkery: (a) sent an e-mail to Thompson "describing her frustration" surrounding Restaurant Week; (b) sent an e-mail to Restaurant Week's digital advertising vendor inquiring whether the vendor or VEG "was to blame" for delayed paperwork; and (c) met with VEG's chairperson, to whom she explained the" 'complete breakdown in communication'" with Thompson, who had engaged in "recurring sexual harassment and unwelcome advances."

VEG's chairperson "expressed regret that [Berkery] was sexually harassed and told [Berkery] that the [b]oard was happy with her work."

In an e-mail the next day, Thompson said Berkery was" 'out of line'" in her communication to the digital advertising vendor." 'If you don't have the trust in your

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own client, we really shouldn't be working together.'" " 'I feel it's time to move on.'" He asked Berkery to "stay on" for "about three more weeks."

Berkery declined, writing in an e-mail:" '[C]onsider this my 7 day notice. I'll be leaving . . . 1/11/19.'" Berkery expressed to Thompson her belief that he was" 'intentionally trying to bring [her] down . . . because [she] wouldn't date [him].'" In a reply e-mail, Thompson disagreed.

A week later, on January 11, 2019, VEG's chairperson told Berkery that "an investigation had been launched." Berkery "agreed to cooperate," and met with the investigator (an attorney from a local law firm) for about one hour on January 14, 2019. Berkery provided to the investigator numerous text messages and e-mails between her and Thompson.

On February 7, 2019, VEG's chairperson told Berkery that" 'the investigation . . . concluded'" and that "Thompson's sexual harassment" of Berkery" 'had been addressed.'" Berkery was told that "[b]ecause the investigation involved a 'personnel matter,'" no further information could be "divulge[d]."

Over the course of the contract, Berkery billed VEG an average of $3,200 a month for her services, "at a billing rate of $90 an hour for technology work and $45 an hour for writing."

In May 2019, Berkery filed a complaint against VEG, VEG's chairperson, and Thompson.

In August 2019, Thompson's employment with VEG ended.

In December 2019, Berkery filed the TAC, stating four causes of action against defendants: (1) "Sexual Harassment in a Defined Relationship" (Civ. Code, § 51.9); (2) "Failure to Prevent Sexual Harassment of a Person Providing Services Under Contract" (Gov. Code, § 12940, subd. (j)); (3) "Breach of Implied Covenant of Good Faith and Fair Dealing"; and, (4) "Intentional Infliction of Emotional Distress." Regarding her Civil Code section 51.9 claim, Berkery alleged in paragraph 122 of the TAC: "[Berkery] could

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not easily end the business relationship with Thompson and [VEG] . . . . Plaintiff was, and is, a single mother with a start-up business, and [d]efendants controlled her primary source of income. Defendant Thompson held himself out as helping [p]laintiff establish her business, service, or professional relationships in Elk Grove. Thompson was Producer Director of [p]laintiff's voiceover radio commercials on behalf of [VEG]."

In January 2020, Berkery requested, and the trial court granted, dismissal of VEG's chairperson as a defendant.

Also in January 2020, VEG and Thompson demurred to the TAC. In support of their demurrers, both defendants argued that Berkery failed to state a claim of sexual harassment under Civil Code section 51.9, because she did not present facts showing an inability to easily terminate the relationship, a necessary element under the statute. In her oppositions to the demurrers, Berkery contended that element was eliminated, effective January 1, 2019, in "the new version of Civil Code § 51.9."

In February 2020, the trial court issued tentative rulings sustaining defendants' demurrers without leave to amend as to all causes of action but did not address defendants' arguments regarding the element of an inability to easily terminate the relationship.

Tentative ruling on VEG's demurrer

The trial court sustained VEG's demurrer to Berkery's sexual harassment claim, because "according to the California Supreme Court, the Legislature enacted Civil Code §51.9 to 'address "relationships between providers of professional services and their clients ." [Citation.]' ( Hughes v. Pair (2009) 46 Cal.4th 1035, 1044 (emphasis added)." But "the facts alleged in the TAC . . . ma[d]e plain that it was [Berkery] who was providing services to VEG, rather than the other way around, and thus, [Civil Code] § 51.9 ha[d] no application to the facts of the case at bar."

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The Government Code section 12940 claim for failure to prevent sexual harassment "necessarily fail[ed] because" the sexual harassment claim failed. Likewise, the claim for intentional infliction of emotional distress was not viable "inasmuch as it [was] expressly premised on defendant Thompson's alleged sexual harassment," which did "not . . . plead a valid claim."

Last, Berkery's claim for breach of the implied covenant of good faith and fair dealing was "deficient as a matter of law," because "there [was] no indication that [Berkery] was unfairly deprived of any benefits to which she was otherwise entitled under the contract with VEG."

The trial court denied leave to amend, "[s]ince [Berkery] . . . had four opportunities to plead her claims . . . against . . . VEG and since the [trial court was] not persuaded [Berkery] ha[d] a reasonable possibility of" pleading viable claims.

Tentative ruling on Thompson's demurrer

As a preliminary matter, the trial court explained that only the sexual harassment and intentional infliction of emotional distress claims were "directed against . . . Thompson."

The trial court sustained Thompson's demurrer on those claims for the same reasons it sustained VEG's demurrer. Likewise, the trial court denied leave to amend the claims against Thompson for the same reasons it denied leave to amend the claims against VEG.

Hearing

At a hearing held after the trial court issued its tentative rulings, and after defense counsel observed the defense was "never notified by" Berkery's counsel of a "request for hearing . . . as to any cause of action other than" the failure to prevent sexual harassment, counsel for Berkery agreed to "limit [his] comments" at the hearing to the Government Code section 12940 claim. Counsel for Berkery maintained that he could "cure th[e] lack

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of underlying sexual harassment" in order to plead a viable claim of failure to prevent sexual harassment, and asked the trial court for leave to amend.

Judgments

The trial court affirmed its tentative rulings, and entered judgments for VEG and Thompson in March 2019.

Berkery timely appealed.

Discussion

A. Standard of Review

"The function of a demurrer is to test the sufficiency of the complaint by raising questions of law. We give the complaint a reasonable interpretation and read it as a whole with all parts considered in their context. . . . We are not concerned with the plaintiff's ability to prove the allegations or with any possible difficulties in making such proof. We are not bound by the construction placed by the trial court on the pleadings; instead, we make our own independent judgment." ( Scholes v. Lambirth Trucking Co. (2017) 10 Cal.App.5th 590, 595 ( Scholes ).)

On appeal from a demurrer for failure to state a cause of action, "we accept as true the well-pleaded allegations in plaintiffs' [operative] complaint.' "We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law." '" ( Evans v. City of Berkeley (2006) 38 Cal.4th 1, 6, italics added; see Kim v. Westmoore Partners, Inc. (2011) 201 Cal.App.4th 267, 281 ["The 'well-pleaded allegations' of a complaint refer to '" 'all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law'"' "].)

"Facts appearing in exhibits attached to the [operative] complaint . . . are accepted as true and are given precedence, to the extent they contradict the allegations." ( Paul v. Patton (2015) 235 Cal.App.4th 1088, 1091.)

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"Where the trial court sustains the demurrer without leave to amend, we must decide whether there is a reasonable possibility the plaintiff can cure the defect with an amendment. If we find that an amendment could cure the defect, we must find the court abused its discretion and reverse. If not, the court has not abused its discretion. The plaintiff bears the burden of proving an amendment would cure the defect." ( Scholes, supra , 10 Cal.App.5th at p. 595.)

The plaintiff also bears the burden on appeal to show the demurrer was sustained erroneously. ( Savage v. Trammell Crow Co. (1990) 223 Cal.App.3d 1562, 1576; Bush v. California Conservation Corps (1982) 136 Cal.App.3d 194, 200.)

"We may affirm on any basis stated in the demurrer, regardless of the ground on which the trial court based its ruling." ( Krolikowski v. San Diego City Employees' Retirement System (2018) 24 Cal.App.5th 537, 549.)

B. Legal Principles

1. Sexual harassment in the workplace

Under the California Fair Employment and Housing Act (the FEHA) (Gov. Code, § 12900 et seq.), it is unlawful "[f]or an employer . . . or any other person, because of . . . sex . . . to harass an employee . . . or a person providing services pursuant to a contract . Harassment of . . . a person providing services pursuant to a contract by an employee, other than an agent or supervisor, shall be unlawful if the entity, or its agents or supervisors, knows or should have known of this conduct and fails to take immediate and appropriate corrective action." (Gov. Code, § 12940, subd. (j)(1), italics added.)

In Hughes v. Pair, supra , 46 Cal.4th 1035 ( Hughes ), our Supreme Court explained that prohibited workplace sexual harassment "ranges from expressly or impliedly conditioning employment benefits on submission to, or tolerance of, unwelcome sexual advances to the creation of a work environment that is 'hostile or abusive to employees because of their sex.' [Citation.] Thus, . . . California's FEHA 'recognize[s] two theories

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of liability for sexual harassment claims . . . ". . . quid pro quo harassment, where a term of employment is conditioned upon submission to unwelcome sexual advances . . . [and] hostile work environment, where the harassment is sufficiently pervasive so as to alter the conditions of employment and create an abusive work environment." '" ( Id. at pp. 1042-1043.)

"[T]he hostile work environment form of sexual harassment is actionable only when the harassing behavior is pervasive or severe. [Citation.] . . . [Citation.] To prevail on a hostile work environment claim under California's FEHA, an employee must show that the harassing conduct was 'severe enough or sufficiently pervasive to alter the conditions of employment and create a work environment that qualifies as hostile or abusive to employees because of their sex.' [Citations.] There is no recovery 'for harassment that is occasional, isolated, sporadic, or trivial.' [Citation.] [¶] Courts that have construed . . . California employment discrimination laws have held that an employee seeking to prove sexual harassment based on no more than a few isolated incidents of harassing conduct must show that the conduct was 'severe in the extreme.'" ( Hughes, supra , 46 Cal.4th at p. 1043.)

In determining the severity of harassment, courts should give"' "careful consideration [to] the social context in which particular behavior occurs and is experienced by its target. . . . The real social impact of workplace behavior often depends on a constellation of surrounding circumstances, expectations, and relationships which are not fully captured by a simple recitation of the words used or the physical acts performed." '" ( Lyle v. Warner Brothers Television Productions ( Lyle ) (2006) 38 Cal.4th 264, 283.)

"To be actionable, 'a sexually objectionable environment must be both objectively and subjectively offensive, one that a reasonable person would find hostile or abusive, and one that the victim in fact did perceive to be so.'" ( Lyle , supra , 38 Cal.4th at p. 284.)

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2. Sexual harassment in certain relationships

"In 1994, the Legislature enacted Civil Code section 51.9 to address 'relationships between providers of professional services and their clients.' (Stats. 1994, ch. 710, § 1, p. 3432.) The statute sets out a nonexclusive list of such providers, which includes physicians, psychiatrists, dentists, attorneys, real estate agents, accountants, bankers, building contractors, executors, trustees, landlords, and teachers; also falling within the statute's reach is sexual harassment in any 'relationship that is substantially similar to' those specifically listed." ( Hughes, supra , 46 Cal.4th at p. 1044, fn. & italics omitted.)

In 2018, the necessary elements to prove sexual harassment under Civil Code section 51.9 were: (1) a cognizable relationship; (2) that "[t]he defendant has made sexual advances, solicitations, sexual requests, demands for sexual compliance by the plaintiff, or engaged in other verbal, visual, or physical conduct of a sexual nature or of a hostile nature based on gender, that were unwelcome and pervasive or severe"; (3) "an inability by the plaintiff to easily terminate the relationship"; and (4) that such conduct caused or will cause "economic loss or disadvantage or personal injury." (Former Civ. Code, § 51.9, subd. (a)(1)-(4).)

Senate Bill No. 224 (2017-2018 Reg. Sess.) amended Civil Code section 51.9, effective January 1, 2019. (Stats. 2018, ch. 951, § 1.) Relevant here, Senate Bill No. 224 (i) added to the nonexclusive list of relationships that fall within Civil Code section 51.9's reach, by including elected officials, lobbyists, and directors or producers, and (ii) eliminated the third element-the plaintiff's "inability . . . to easily terminate the relationship." (Stats. 2018, ch. 951, Leg. Counsel's Digest, para. 2.)

Regarding the second element of a Civil Code section 51.9 claim, "the words 'pervasive or severe' in section 51.9 [are to] be given the same meaning that those words have in the employment context." ( Hughes, supra , 46 Cal.4th at p. 1046.) This is so, because the "history of the amendments to Civil Code section 51.9 leaves no doubt of the

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Legislature's intent to conform the requirements governing liability for sexual harassment in professional relationships outside the workplace to those of . . . California's FEHA . . . liability for sexual harassment in the workplace. . . . With respect to liability under section 51.9, which covers a wide variety of business relationships outside the workplace, the relevant inquiry is whether the alleged sexually harassing conduct was sufficiently pervasive or severe as to alter the conditions of the business relationship." ( Id. at p. 1048, italics omitted.)

3. Retroactivity of civil statutes

"Whether a statute should apply retrospectively or only prospectively is, in the first instance, a policy question for the legislative body enacting the statute. [Citation.] Thus, where a statute provides that it clarifies or declares existing law, '[i]t is obvious that such a provision is indicative of a legislative intent that the amendment apply to all existing causes of action from the date of its enactment.'" ( Western Security Bank v. Superior Court (1997) 15 Cal.4th 232, 244.)

Accordingly, civil "statutes do not apply retroactively unless the Legislature clearly indicated otherwise." ( Phillips v. St. Mary Regional Medical Center (2002) 96 Cal.App.4th 218, 229 ( Phillips ).) One reason for this "presumption against retroactive application" of civil statutes, is a concern that "the parties' rights and obligations that exist[ed] before the statute's adoption" will be impacted. ( Id. at pp. 229-230.)

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C. Analysis

1. Parties' arguments on appeal

Berkery contends the trial court "erred in granting the demurrer on all causes of action," but presents specific argument only as to the claims of sexual harassment and failure to prevent sexual harassment.

Regarding the sexual harassment claim, Berkery contends the 2019 version of Civil Code section 51.9 applies to this case, but that under even the earlier version, "sufficient facts were alleged in [the TAC] to rebut the demurrer." Regarding the claim of failure to prevent sexual harassment, Berkery contends the TAC "pled sufficient facts to establish a claim under Government Code section 12940(j)," that VEG failed to prevent Thompson's creation of a hostile work environment.

VEG argues as a threshold matter that in light of a local rule of the trial court, and because (after issuance of the trial court's tentative rulings) Berkery requested a hearing only on her claim under Government Code section 12940 for failure to prevent sexual

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harassment, Berkery "waived her right to appeal the trial court's ruling as to th[e] other causes of action."

On the merits, VEG argues Berkery failed to state a claim for sexual harassment under Civil Code section 51.9, for multiple independent reasons: (i) the trial court correctly ruled it was dispositive that Berkery was the provider of services to VEG, rather than the recipient of services; (ii) the 2018 version of the law applies, and the TAC "included no allegations to establish that [Berkery] could not easily terminate the relationship" with VEG, a necessary element of the 2018 version of the law; and (iii) Thomson's conduct was not severe or pervasive.

As for the claim of failure to prevent sexual harassment under Government Code section 12940, VEG argues the absence of a viable sexual harassment claim precludes a claim of failure to prevent sexual harassment.

Thompson argues Berkery failed to state a claim against him for sexual harassment under Civil Code section 51.9, because their professional relationship "was not a 'qualifying relationship' within the terms of the statute," as it "did not match any of the relationships" in the illustrative list of the 2018 version of the statute. Thompson "provided no services." Rather, it was Berkery who "was an independent contractor providing services in a manner expressly under her own control."

Thompson also argues Berkery "failed to allege facts establishing [his] unwanted" romantic advances "constituted 'pervasive and severe conduct.' "

2. No forfeiture by Berkery of her right to appeal

Berkery did not forfeit the right to appeal any aspect of the trial court's ruling. We find unpersuasive VEG's contention that, by failing to request (pursuant to local rule)

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oral argument on the court's tentative ruling on the Civil Code section 51.9 claims, Berkery forfeited an appellate challenge to that ruling. The cases VEG cites in support of the proposition are inapposite.

Doers v. Golden Gate Bridge etc. Dist. (1979) 23 Cal.3d 180, stands for the proposition that "judicial litigation of the merits of arbitrable issues . . . waives a party's right to arbitration." ( Id. at p. 188, italics omitted.) In re Marriage of Hinman (1997) 55 Cal.App.4th 988, applies the broad proposition that "fail[ure] . . . to raise . . . arguments below," in the trial court "thereby waiv[es] [the] right to" raise the arguments on appeal. ( Id. at p. 1002.) Neither case stands for the proposition that a party who files an opposition to a demurrer but does not request oral argument on a tentative ruling sustaining the demurrer, as contemplated by local rule, thereby forfeits the right to appeal a ruling sustaining the demurrer. And our own independent research found no such principle in California courts. (Cf. Gilberd v. AC Transit (1995) 32 Cal.App.4th 1494, 1500 ["oral argument with respect to . . . motions is clearly collateral to the merits of the motions"].)

Further, we do not read the language of the local rule (as quoted by VEG) as suggesting forfeiture on the merits of a ruling.

Local rules like the one VEG purports is at issue here promote both judicial economy and preservation of litigant resources by reducing oral argument calendars.

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Even when a party believes its position is sound, the party reasonably may decide to waive oral argument in light of a tentative ruling. (Cf. People v. Pena (2004) 32 Cal.4th 389, 400 ["tentative opinion[s] . . . streamline the oral argument process by . . . in many cases, enabling counsel to determine that requesting oral argument . . . is not likely to be fruitful and may not be a wise use of available resources" (fn. omitted)].)

But if waiving oral argument were to result in forfeiture on the merits, no rational party would waive oral argument, thereby frustrating judicial economy. ( People v. Hazle (2007) 157 Cal.App.4th 567, 573 [construing a statute to avoid "an absurd waste of judicial resources"].)

3. Senate Bill No. 224's changes to Civil Code section 51.9 are not retroactive.

Berkery has provided nothing to suggest the Legislature clearly indicated that its changes to Civil Code section 51.9, via Senate Bill No. 224, should apply retrospectively. Indeed, far from indicating that Senate Bill No. 224's changes to the language of Civil Code section 51.9 were mere clarifications or declarations of existing law (cf. Western Security Bank v. Superior Court, supra , 15 Cal.4th at p. 244), the Legislature indicated it wanted substantively to change the law . (Sen. Rules Com., Off. of Sen. Floor Analyses, analysis of Sen. Bill No. 224 (2017-2018 Reg. Sess.) as amended August 23, 2018, pp. 2-3 [explaining substantive changes to § 51.9, including "[r]emov[ing] the requirement in existing law for a plaintiff . . . to prove that there is an inability by the plaintiff to easily terminate the relationship"].)

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Thus, the presumption against retroactive application of Senate Bill No. 224's changes to Civil Code section 51.9 applies, and the 2018 version of the law governs this appeal. (See Phillips, supra , 96 Cal.App.4th at p. 229.)

Berkery's contention that the 2019 version of Civil Code section 51.9 applies "because the statute did not substantially affect" the parties' "existing rights and obligations," is unpersuasive. Senate Bill No. 224 did affect the parties' rights, by expanding defendants' potential liability under statutory law to cases of sexual harassment of an independent contractor even when the plaintiff independent contractor can easily terminate the relationship. (See Phillips, supra , 96 Cal.App.4th at pp. 229-230 [because the relevant statutory "amendments substantially affect[ed] defendant's liability under FEHA," plaintiff's claim of wrongful discharge claim would be cognizable only if the provisions had retroactive application].)

4. The trial court's analysis of Civil Code section 51.9 .

We disagree with the trial court's conclusion (and defendants' argument on appeal) that because Berkery was the service provider (not the recipient), she was not entitled to the protections of Civil Code section 51.9 as a matter of law. The text of section 51.9 draws no such bright line between providers and recipients of professional services, and our Supreme Court's observation in Hughes that, when enacted, section 51.9 was meant to "address 'relationships between providers of professional services and

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their clients,'" ( Hughes, supra, 46 Cal.4th at p. 1044, italics added) simply cannot be read to preclude lawsuits by the service provider against their clients.

The 9th Circuit Court of Appeals recently observed, when analyzing the version of Civil Code section 51.9 that preceded Senate Bill No. 224, that "each of the enumerated examples" in the statute "consists of a relationship wherein an inherent power imbalance exists such that, by virtue of his or her 'business, service, or professional' position, one party is uniquely situated to exercise coercion or leverage over the other." ( Judd v. Weinstein (9th Cir. 2020) 967 F.3d 952, 957.)

For instance, someone providing personal security services to a public official may be in a relatively vulnerable position vis-a-vis the public official. (See Inquiry Concerning Johnson (2020) 9 Cal.5th CJP Supp. 1, 27-28.)

Indeed, the legislative history of Senate Bill No. 224 indicates the Legislature was not contemplating rigid dichotomies (e.g., client/plaintiff vs. service provider/defendant) when it amended the law recently. (See Sen. Rules Com., Off. of Sen. Floor Analyses, analysis of SB 224 (2017-2018 Reg. Sess.) as amended Aug. 23, 2018, p. 6 [explaining a problem the bill was intended to address by explicitly including elected officials and lobbyists in the illustrative list of examples of professional relationships cognizable for purposes of Civil Code Section 51.9 was that elected officials "have particular influence over the staff who serve at their pleasure and the people whose careers depend on having the access to them: lobbyists. In some cases, the opposite holds: some lobbyists have such outsized influence and access to resources with which to influence elections, that they hold power over elected officials"].)

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5. Berkery sufficiently pleaded an "inability to easily terminate the relationship" as required to establish liability for sexual harassment under Civil Code section 51.9, subdivision (a)(3) in effect at the time of the relevant events.

Here, Berkery was the owner and operator of a marketing consulting firm; had been doing business in the City of Elk Grove since 2013; and signed a contract in August 2018 to provide her services to VEG. The contract (attached as an exhibit to the TAC) provided: Berkery was an "independent contractor" who had "the sole right to control the means, manner and method by which the services" would "be performed" under the agreement; either party could terminate the agreement "at any time by giving 21 days' written notice to the other party"; the written contract was "the entire [a]greement" between the parties, and could be "modified only by a writing signed by both parties."

In paragraph 122 of the TAC, the relevant text that our Supreme Court directed us to consider when it granted Berkery's petition for review and transferred the matter to us, Berkery pleaded she "could not easily end the business relationship with Thompson and [VEG] . . . . Plaintiff was, and is, a single mother with a start-up business, and [d]efendants controlled her primary source of income."

This is a sufficiently pleaded allegation that Berkery could not easily terminate her relationship with Thompson and VEG. (Former Civil Code, § 51.9, subd. (a)(3).)

6. Berkery sufficiently pleaded a hostile work environment .

On August 26, 2018, Thompson sent a romantically suggestive text message to Berkery, and then apologized for the text. Berkery replied that she was "not looking" to date anyone. On September 14, 2018, Berkery declined Thompson's invitation to go on a date with him.

On October 20, 2018, after driving Berkery home from a costume ball they attended together, and while they were in his car, Thompson: (i) told Berkery he was in love with her, (ii) wondered aloud how he could get her to look at him the way she

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looked at a man that she danced with during the ball that night, and (iii) asked Berkery to explain her rejection of his advances. Berkery "felt trapped and frightened," and said she did not "want to date anyone" at the moment. Several hours later, Thompson sent a text message to Berkery describing her as "the hottest girl in the room"; reminded her that he was "only 10 minutes away and would love nothing more than" "just to hold" her. Berkery "fear[ed] for her physical safety and that of her children. . . . Between the stress of her job and the strain of rejecting Thompson's creepy advances, she was suffering from anxiety, insomnia, headaches and constant fatigue." But she was also "afraid she might lose this important client because she didn't want a sexual relationship with Thompson."

In an October 24, 2018 phone conversation, Berkery reiterated to Thompson that she did not want to date him, and indicated she would end the business relationship with VEG unless Thompson ceased pursuing her. Thompson asked Berkery to go on a date with him twice more via November 2018 text messages.

We conclude this is a sufficiently pleaded hostile work environment. (Cf. Miller v. Department of Corrections (2005) 36 Cal.4th 446, 468 [considering all the circumstances from the perspective of a reasonable person in the plaintiff's position, "a jury reasonably could conclude that the conduct created a work environment that qualifies as hostile or abusive to employees because of their gender"].)

Subjectively, Berkery pleaded that Thompson's behavior frightened her, caused her to fear for her family's safety, and lead to insomnia and constant fatigue. Objectively, we cannot say Berkery's fear, insomnia, and constant fatigue were unreasonable reactions to Thompson's severe harassing behavior. For example, the executive director of the company that "controlled [Berkery's] primary source of income" and knew where she lived sent a text message to her -- despite Berkery's repeated refusals to date, including a refusal only several hours beforehand -- that he was "only 10 minutes away and would love nothing more than" "just to hold" her.

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7. Because Berkery states a claim of sexual harassment under Civil Code section 51.9, the trial court erred by dismissing her claim for failure to prevent sexual harassment under Government Code section 12940.

The trial court ruled that Berkery's Government Code section 12940 claim for failure to prevent sexual harassment "necessarily fail[ed] because" the sexual harassment claim failed. In light of our conclusion that Berkery's sexual harassment claim was sufficiently pleaded, the reasoning undergirding trial court's demurrer dismissal of the Government Code section 12940 vanishes.

Accordingly, we reverse the trial court's demurrer dismissal of this claim (against VEG).

Disposition

The trial court's dismissals on demurrer of Berkery's sexual harassment claims (the first and second causes of action in the TAC) against Thompson and VEG are reversed. Dismissal of the other claims is affirmed. The parties shall bear their own costs on appeal. (Cal. Rules of Court, rule 8.278.)

We concur: DUARTE, J. KRAUSE, J.