Opinion
B226637
11-15-2011
FRANK SMITH, Plaintiff and Appellant, v. IRONWOOD MANAGEMENT, Defendant and Respondent.
Righetti Glugoski, Matthew Righetti, John Glugoski and Michael Righetti for Plaintiff and Appellant. Law Office of Stephen F. McAndrew and Stephen F. McAndrew for Defendant and Respondent.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Los Angeles County Super. Ct. No. BC398020)
APPEAL from an order of the Superior Court of Los Angeles County, Alan S. Rosenfield, Judge. Affirmed.
Righetti Glugoski, Matthew Righetti, John Glugoski and Michael Righetti for Plaintiff and Appellant.
Law Office of Stephen F. McAndrew and Stephen F. McAndrew for Defendant and Respondent.
INTRODUCTION
Plaintiff Frank Smith appeals from an order denying class certification. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff was an hourly maintenance employee employed by defendant Ironwood Management. Defendant was a property management company managing approximately 41 apartment properties in California with a team of approximately 70 managers, assistant managers, and maintenance workers.
In September 2008, plaintiff filed the instant suit, pled as a class action authorized by Code of Civil Procedure section 382, against defendant. On behalf of plaintiff and all then-current and former hourly paid maintenance employees of defendant from 2004 to the time the complaint was filed in 2008, the complaint set forth the following causes of action: failure to pay minimum wage (first), failure to pay overtime compensation (second), violation of the unfair competition law (UCL, Bus. & Prof. Code, § 17200 et seq.) (third), and failure to make payment within the required time (fourth). The complaint alleged that defendant had engaged in a pattern and/or practice of failing to compensate plaintiff properly for all hours worked for work defendant required him to perform, failing to maintain accurate and proper time records of the actual hours and/or days worked, improperly altering time records, encouraging plaintiff not to report all time worked, and threatening plaintiff with discharge, demotion, or discrimination or otherwise intimidating him if he did not work off-the-clock.
Code of Civil Procedure section 382 provides in pertinent part: "[W]hen the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court, one or more may sue or defend for the benefit of all."
In March 2010, after being granted leave to amend, plaintiff filed the first amended complaint. Rather than substantive new allegations, the amendment added the following causes of action in order to recover statutory penalties for violation of specified California wage and hour laws and regulations associated with the wrongful acts alleged in the first four causes of action: late payment of wages (Lab. Code, §§ 210, 226 et seq., 226.7, 1198; an Industrial Welfare Commission Wage Order (fifth); waiting time penalties (id., §§ 201-203) (sixth); and failure to furnish wage and hour statements (id., §§ 226, 558, 2698). There was no change to the first four causes of action.
Plaintiff filed a motion for an order granting certification of the following class: "All California Hourly Maintenance Employees employed by Defendants during the time period of September 11, 2004 to the present in any of its properties in California." The motion also sought an order appointing plaintiff as class representative.
Plaintiff's accompanying memorandum of points and authorities defined the putative class as follows: "Plaintiff moves for certification of California based hourly maintenance employees that suffer both 1) 'off the clock' violations from hours worked and 2) denied meal and rest breaks without additional compensation . . . ." Plaintiff's statement of the common issues of law that predominate was much more specific than allegations in the complaint. They included failure to pay all overtime owed to maintenance workers for work performed during the time for meal periods, which resulted in a meal period of less than the one-hour deduction applied to workers, statutory penalties for requiring workers to be on-duty during the meal period, and for rest breaks.
Plaintiff's memorandum of points and authorities in support of its motion stated that the common issues of law that predominate were as follows:
"1. Whether Ironwood failed to pay all overtime owed to the maintenance employees;
"2. Whether Ironwood's daily 60minute (one hour) autodeduct policy from time worked by hourly employees for meal periods not received or one [of] a length lesser than 60 minutes is valid under California law;
"3. Whether Ironwood's policies concerning what constitutes 'hours worked' for purposes of the payment of wages is illegal and thus Ironwood failed to pay its maintenance worker for all hours actually worked[:] [¶] a. Work performed on weekends opening and closing onsite laundry rooms not recordable as time worked;
b. No overtime paid for employees whom Ironwood allows to live onsite on the basis that an onsite apartment constitutes payment of overtime wages; [¶] c. No compensation for travel time to and from home in the middle of the night for emergency mandatory oncall projects for employees who do not live onsite and have already worked a full day, gone home and then are recalled to the apartment complex; [¶] d. Failure to pay one hour of pay for meal periods not provided pursuant to California Labor Code Section 226.7 and the Industrial Welfare Commission Wage Orders.
"4. Whether Ironwood's 'onduty' meal break policy requires employees to be paid for that time under California law;
"5. Whether Ironwood's rest break policy violates California law[.]"
As supporting evidence, plaintiff offered declarations and their exhibits and deposition excerpts from plaintiff and five other maintenance employees and five managerial employees of defendant. The following is a summary of the evidence:
Plaintiff and the putative class were non-exempt hourly workers employed by defendant to provide maintenance services at apartment complexes (properties) managed by defendant. Time cards submitted by the workers showed essentially the same hours worked for each of them every work day. The cards showed that they began work at 8:00 a.m., had lunch from 12:00 to 1:00 p.m., and ended work at 5:00 p.m. Thus, each worker's time card showed eight hours of work each day and a one-hour lunch period. In actuality, however, often workers did not receive a full hour as a lunch period. The workers were required to keep their phones and pagers on at lunch and to respond if they received a call for service. Also, workers did not take uninterrupted 10-minute rest breaks for each four-hour period of work.
Some of the workers also were required to work on-call shifts in order to respond to calls for service between the hours of 5:00 p.m. and 8:00 a.m. on weekdays and all of the weekend. When approved by defendant, a worker could live, either rent-free or with a reduced rent, at the property where he was required to provide on-call service. He received no overtime pay for his on-site, on-call service on the basis that he was receiving rent credit instead. Such workers were referred to as on-site, on-call workers. If a worker was on-call for a property and did not live rent-free or at a reduced rent on the property, his work was referred to as off-site, on-call work. He received overtime pay but only for the time when he began the service project at the property until he finished the project. He was not paid for his drive time to and from the property.
On-site workers were required to open and close the laundry facilities at the properties where they lived on each of the two weekend days, which required about 30 minutes each time. The workers were not paid for the laundry duty.
A few of the workers provided on-site, on-call service. Most provided off-site on-call service. Some workers had on-call shifts every day, seven days a week. A few had on-call shifts in rotation with one or two other workers. For part of his work history with defendant, plaintiff had an on-site, on-call shift for two weeks in rotation with two other workers who each had two-week shifts. At least one worker provided on-site, on-call service where he lived and off-site service at two other properties and was on-call every day for all three properties. If a worker reported overtime, a supervisor reviewed the report and decided the overtime hours, if any, that qualified for payment. In general, overtime was not compensated for work other than the previously described off-site, on-call work; occasionally a supervisor approved other overtime pay.
Defendant also provided declarations with exhibits and deposition excerpts as evidence, which is summarized as follows: The putative class consisted of 71 persons— 21 current employees and 50 former employees—on defendant's list of maintenance employees from 2004 through 2008.
Of the 71 putative class members, 34 had entered into settlement and release agreements saying that defendant had paid them all the compensation due them, and they had received payments for work they claimed they had not yet been paid for, including overtime for opening and closing laundry facilities. Together, the settlements represented slightly more than 70 percent of the total months in the class period.
Thirty-three putative class members signed settlement and release agreements with regard to the allegations in the complaint. One former maintenance employee signed a settlement and release agreement in relation to a claim made with the Equal Employment Opportunity Commission which, in part, was for unpaid overtime and other compensation.
All the hourly maintenance workers then currently working for defendant, except plaintiff, provided declarations or settlements that attested that defendant had paid them all the money owed to them and demonstrated they were not interested in participating in the class action. Declarations refuting plaintiff's claims were signed by 18 of the 21 hourly maintenance employees then currently working for defendant. The remaining two employees settled with defendant.
Each of the 18 declarants stated that he was not interested in participating in any class action suit against defendant; he believed he had been paid for all work performed, including overtime; he submitted timesheets that accurately reflected the time he worked; he had never done overtime work that was not reflected on his timesheets; he had never been asked to report less time than he actually worked; he had never been threatened or intimidated into reporting less time than he actually worked or into doing work "off the clock"; he had never been told by another employee that the employee had been threatened or intimidated to do such acts; he was not aware of anyone ever changing his timesheets after he submitted them. Each declarant who lived rent-free at the property where the declarant worked stated that he understood that rent credit was his compensation for any overtime he worked.
In deposition testimony, one of the declarants, Jose Ramon Baires (Baires), stated: "When I am talking about signing that [declaration] document was that I wanted to state for the record that I had no problem with the company or at the company." No one on behalf of defendant had ever told Baires to record that he started lunch at 12:00 even if he did not begin until 12:10 p.m. He stated, "[T]hey just tell you that you have to take your lunch break . . . ."
In deposition testimony, another declarant, Antonio Babb-Garcia (Babb-Garcia), stated that he was not intimidated into signing the declaration and that everything in it was true, including that he did not believe he was owed any overtime pay. Babb-Garcia said that he was instructed by defendant always to take his lunch hour and to fill out his timesheets accurately.
In his deposition, plaintiff testified that, during the time he had been employed by defendant, he sometimes lived off-site and sometimes on-site. It was at his request that he lived on-site. He was aware and had been in many discussions regarding defendant's practice that, when he lived on-site rent-free or at a reduced rent, he was not paid for overtime; the rent credit was his compensation for overtime. He never made a written demand to defendant for this overtime.
According to plaintiff's deposition testimony, his supervisor, Autumn Rodriguez, wanted to make sure plaintiff—"everybody"—always took lunch. His supervisor said at 12:00 p.m., but he did not always take it exactly at that time. He always recorded his time on his time sheets; managerial employees did not see his time sheets until after he completed them.
There were occasions, plaintiff testified, for which he recorded overtime on his timesheet and he was paid for it. No one had ever told him or required him to work off-the-clock. Other than the times he was on-call, no one ever required him to keep working after the workday ended or begin work before the workday started. For his then-current on-call schedule, he was on-call on a rotation schedule with two other workers. He was on-call for 14 days, then off-call for 28 days, when other maintenance workers had the on-call duty.
Plaintiff further testified that he had no specific recollection of being threatened with discharge or demotion if he did not do work off-the-clock. Other than one incident in the spring of 2006 and one in the spring of 2008, plaintiff had no evidence that defendant altered time records.
At the certification hearing, the trial court announced its tentative decision to deny the motion. Plaintiff presented extensive argument with supporting evidence, which the trial court discussed in its explanation of the reasons for adopting its tentative decision. The court explained that the combination of problems with typicality, commonality, and the adequacy of the class representative, in addition to the size of the class, rendered the instant lawsuit "not suitable for handling as a class action." The only resulting written order was a minute order denying the motion and stating that the reasons for the denial were set forth in the reporter's transcript of the hearing, which was "incorporated herein by reference only."
Although the trial court denied class certification, the court ruled that the case could proceed as to plaintiff's individual claims. Plaintiff filed a notice of appeal from the court's order denying class certification.
Ordinarily, interim orders are not appealable until an appeal is taken from the final judgment in the case. (Code Civ. Proc., § 904.1.) Nonetheless, "[a] decision by a trial court denying certification to an entire class is an appealable order." (Richmond v. Dart Industries, Inc. (1981) 29 Cal.3d 462, 470, italics added.) The facts are slightly different in the instant case. Here, the trial court's denial order had the effect of precluding the litigation of all class claims, but the trial court also ruled that plaintiff, a member of the putative class, could proceed with his individual claims. Under the so-called "death knell" doctrine applicable to class actions, however, an order is immediately appealable if it has the effect of preventing further proceedings as a class action but permits individual claims to continue. (In re Baycol Cases I & II (2011) 51 Cal.4th 751, 754; see Daar v. Yellow Cab. Co. (1967) 67 Cal.2d 695, 699.) A final judgment is not a prerequisite to appealing the order. (In re Baycol Cases I & II, supra, at p. 754.) Therefore, the trial court's order denying class certification is appealable.
DISCUSSION
We review the denial of class certification under the deferential abuse of discretion standard. "'Because trial courts are ideally situated to evaluate the efficiencies and practicalities of permitting group action, they are afforded great discretion in granting or denying certification.' [Citation.] Nevertheless, 'we must examine the trial court's reasons for [granting or denying] class certification.' [Citations.] In particular, we must consider whether the record contains substantial evidence to support the trial court's . . . finding, as a certification ruling not supported by substantial evidence cannot stand. [Citations.]" (Lockheed Martin Corp. v. Superior Court (2003) 29 Cal.4th 1096, 1106.) We will not disturb a trial court's ruling which is supported by substantial evidence unless the court failed to follow the correct legal analysis by using improper criteria or making erroneous legal assumptions. (Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 326-327; Ghazaryan v. Diva Limousine, Ltd. (2008) 169 Cal.App.4th 1524, 1530.)
Plaintiff claims that the trial court's ruling is insufficient to uphold its denial of class certification, in that the ruling fails to provide a meaningful explanation as to the reasons for its decision. Plaintiff quotes the reporter's notes reflecting the trial court's statements that its denial of class certification was based upon findings of insufficient typicality, inadequate representation of the class by plaintiff, and lack of predominance of common issues of law and fact, and that, in combination, the findings show that the lawsuit is not suitable for handling as a class action. According to plaintiff, if these are deemed to be the court's reasons, then the court must have used improper criteria. Plaintiff does not raise any issue as to whether the court's findings are supported by substantial evidence.
We begin with the trial court's explanation of its determination that the lawsuit is not suitable for proceeding as a class action. At the opening of the hearing on defendant's motion for summary judgment, the trial court announced: "The tentative is to deny certification based upon lack of typicality, adequacy of the class representative . . . and commonality. [¶] And it has a lot to do with this issue of the rent-in-exchange-for-overtime issues and . . . it kind of crosses over several different of the elements for certification. . . . [¶] I don't believe we have an adequate representative because his situation is way different than what would be the paradigmatic representative for a class like that. . . . You just don't have enough of the . . . typicality, [adequacy], and commonality among everybody in the class."
The trial court discussed the evidence as follows: "Well, the meal period isn't even alleged in the first amended complaint. But . . . putting that aside, [plaintiff], you couched an argument in terms of numerosity, and I didn't see it as numerosity. I saw it as commonality. But let me see if I can find the numbers. [¶] You had 70 putative class members. . . . [Y]ou're saying that there are only 21 current maintenance men, of which 18 signed declarations saying they did not wish to participate. And then, of the remaining three, two release their claims against the defendant. [¶] The defendant contends that the only remaining current maintenance worker is the plaintiff. [¶] Now, the defendant contends that of the 50 former workers, only 7 shared the on-site living arrangement, and that therefore 8 persons, net, is not sufficient to make a class. [¶] Interestingly, you were going for the issue of numerosity. And although I didn't buy it on numerosity, I think it said a lot in terms of commonality and typicality."
In response to the court's comments, plaintiff proposed either substituting in another class representative or creating sub-classes. The court explained: "You don't have a large enough class for that, to start subdividing the class as far as the court is concerned. And if it were just the adequacy of the class rep, I'd give you leave to amend.
But it's typicality and commonality in combination with the size of the class globally, the population, and the adequacy of the class representative, and it's not suitable for handling as a class action." After allowing plaintiff further to argue the elements and the evidence, the trial court issued its ruling: "All right. Class certification is denied. The court adopts the tentative."
Contrary to plaintiff's contention that the trial court used improper criteria, the trial court's explanation of the reasons for its decision are consistent with the legal principles and criteria to be considered in determining qualification for class certification. A lawsuit may proceed as a class action "when the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court." (Code Civ. Proc., § 382.) The party seeking certification of a class has the burden to establish the existence of both an ascertainable class and a well-defined community of interest among class members. (Sav-On Drug Stores, Inc. v. Superior Court, supra, 34 Cal.4th at p. 326.) The presence of an ascertainable class is undisputed here.
At a hearing prior to the class certification hearing, the trial court stated there was no problem with ascertaining the class, and neither party raised an objection.
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To establish the requisite "community of interest," the party must show (1) commonality, that is, that questions of law or fact common to the class predominate over such questions applicable to individual members; (2) typicality, that is, that the class representative has claims or defenses typical of the class; and (3) adequacy of representative, that is, that the class representative can adequately represent the class. (Sav-On Drug Stores, Inc. v. Superior Court, supra, 34 Cal.4th at p. 326.) These are the three criteria the trial court found were not supported by the evidence. Whether a class should be certified is essentially a procedural question "'that does not ask whether an action is legally or factually meritorious.' [Citation.]" (Lockheed Martin Corp. v. Superior Court, supra, 29 Cal.4th at p. 1104.) Nothing in the trial court's statements indicates that the trial court based its decision on, or even considered, the merits.
The final and overriding criterion for certification is that proceeding as a class action "'must be the superior means of resolving the litigation, for both the parties and the court.'" (Ghazaryan v. Diva Limousine, Ltd., supra, 169 Cal.App.4th at p. 1537.) For that reason, the trial court must weigh the benefits and burdens of the class action process to the parties and the court and allow the litigation to proceed as a class action only where substantial benefits accrue both to the parties and the court. (Ibid.)
The trial court's discussion of evidence shows a weighing of the benefits and burdens of proceeding as a class action. Although the complaint alleges the class was believed to number in the hundreds, the putative class size was comparatively small—71 persons. By the time of the certification hearing, plaintiff was the only one of the current maintenance workers remaining to pursue the class claims. Of the former workers, only seven had lived on-site like plaintiff had. Thus, there were only eight persons who could possibly have shared commonality of facts regarding their work arrangement with defendant. Even so, there was no evidence that they shared commonality of facts to prove liability for unpaid wages. The facts relevant to determining liability could have been different for each worker for each day he worked.
Among the papers of the parties reviewed by the court was the plaintiff's deposition testimony, which also shows one of the reasons his claims were not typical of those of other putative class members. His statements included admissions that contradicted the allegations in the complaint regarding unpaid wages.
In addition, the record reveals significant variation in the location each putative class member worked for defendant—over 40 properties, the managerial staff they worked under—managers at the individual properties and area supervisors, whether they worked on-call or not, whether they worked on-call on a rotations basis or full-time seven days a week basis, whether they lived on-site where they worked, and whether they completed every time card before they turned it in to management. "'Only in an extraordinary situation would a class action be justified where, subsequent to the class judgment, the members would be required to individually prove not only damages but also liability.' [Citation.]" (Caro v. Procter & Gamble Co. (1993) 18 Cal.App.4th 644, 668.)
Defendant draws our attention to the similarity of the circumstances of the instant case to those in Dunbar v. Albertson's, Inc. (2006) 141 Cal.App.4th 1422. In Dunbar, the appellate court affirmed the trial court's denial of class certification on the basis of significant variations in the nature of individual liability issues. (Id. at p. 1431.) The variations were associated with factual differences that would require individual attention in order to determine liability. For example, putative class members worked at different properties owned and operated by the defendant, with duties which varied according to the property where they worked and on a range of schedules. The reviewing court concluded that, in light of the significant variation in the liability issues, "very particularized individual liability determinations would be necessary." (Ibid.)The court noted its holding in a previous case that "'"the community of interest requirement is not satisfied if every member of the alleged class would be required to litigate numerous and substantial questions determining his individual right to recover following the 'class judgment' determining issues common to the purported class."'" (Id. at pp. 1431-1432.)
As the foregoing analysis shows, the trial court here used proper criteria for making its decision to deny class certification. (Ghazaryan v. Diva Limousine, Ltd., supra, 169 Cal.App.4th at p. 1537.) Although plaintiff does not raise a substantial evidence challenge to the court's decision, as discussed above, the record reveals substantial evidence to support the trial court's findings with respect to the criteria utilized by the court. We will not disturb the trial court's ruling, in that it is supported by substantial evidence and "'"[a]ny valid pertinent reason stated will be sufficient to uphold the order."'" (Sav-On Drug Stores, Inc. v. Superior Court, supra, 34 Cal.4th at pp 326-327.)
DISPOSITION
The order is affirmed. Defendant is to recover its costs on appeal.
JACKSON, J. We concur:
PERLUSS, P. J.
WOODS, J.