Opinion
A149486
02-08-2018
MICHAEL STEFFEN, Plaintiff and Appellant, v. TRIPLE Z RANCH, LLC, Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Sonoma County Super. Ct. No. SCV-256536)
Michael Steffen sued Triple Z Ranch, LLC (Triple Z) and its members, Susan Byrne, Katherine Byrne, and Charles Jones, to recover, among other things, unpaid minimum wages and overtime compensation (Lab. Code, § 1194). The trial court sustained Triple Z's demurrer to Steffen's second amended complaint (SAC) with respect to these and other statutory wage claims, without leave to amend, and ultimately entered judgment in Triple Z's favor. Steffen appeals from the judgment, arguing the trial court erred in concluding his statutory causes of action were barred by the applicable statute of limitations (Code Civ. Proc., § 338, subd. (a)) and he failed to allege Triple Z was his employer. We agree the trial court erred in sustaining Triple Z's demurrer to Steffen's statutory wage claims and reverse.
Undesignated statutory references are to the Labor Code.
I. FACTUAL AND PROCEDURAL BACKGROUND
Armand Zimmerlin died on March 8, 2012. Before his death, Zimmerlin was the managing member and majority owner of Triple Z. He owned a house and cottage on adjoining parcels of real property in Sonoma County (the Property), but transferred the Property to Triple Z in December 2001. Steffen alleges, on information and belief, that Zimmerlin, who had no children, transferred the real property to Triple Z for tax and estate planning purposes. Zimmerlin continued to live in the house on the Property.
Susan Byrne became Triple Z's managing member after Zimmerlin's death.
In July 2002, Steffen moved into the cottage and began performing handyman and caretaker tasks on the Property, under Zimmerlin's direction. Zimmerlin and Steffen orally agreed Steffen would pay $800 per month in rent, but Zimmerlin would credit Steffen $20 per hour for any work he performed for Zimmerlin or Triple Z. Between July 2002 and April 2008, Zimmerlin kept records of Steffen's work hours, totaled his hours at the end of each month, deducted $800 for rent, and then paid the difference to Steffen in cash.
Steffen alleges the agreement was modified in April 2008. After Steffen had cleaned and organized Zimmerlin's garage, Zimmerlin appeared pleased and told Steffen, "someday your kids will be in your cabin and talking about it being worth a million dollars." Steffen took this statement to mean Zimmerlin was planning to give him the cottage, "in exchange for [Steffen's] dedicated service." Thereafter, Zimmerlin no longer kept records of the hours Steffen worked, stopped collecting rent, and ceased paying Steffen any wages. For the next four years, Steffen continued working on the Property, at least 40 hours a week and sometimes more, but was never paid. Steffen "never complained or questioned the lack of pay because it was his understanding that he was now working for the Cottage." Steffen also improved the cottage itself and the surrounding property—installing new appliances and performing all necessary landscaping and maintenance. He was never compensated for these expenses. When Zimmerlin's health declined in his final four months of life, Steffen provided caregiving services to Zimmerlin in addition to his regular duties on the Property. On or about March 5, 2012, Zimmerlin told Steffen, "I left you quite a nest egg . . . but you'll have to help them clean this place up."
After Zimmerlin's death in March 2012, Steffen continued working at the Property, at Susan Byrne's and Jones's request, for approximately one year. In approximately April 2012, Steffen met with Jones, at Jones's request. Jones asked Steffen how he had been paid in the past, and how much he paid in rent. Confused by the question, Steffen asked Jones "if he knew of Zimmerlin's plans?" Jones replied, "You mean the cabin and 20 acres?" Steffen answered affirmatively. Jones stated "he would have to check with Susan Byrne," but in the meantime Jones would pay Steffen for his work at the Property in cash. Thereafter, Steffen was paid by Jones in cash, but continued living in the cottage without paying rent. In late 2013, Steffen informed Jones he had found another job and could not work at the Property. Jones became upset and asked Steffen, "what about our deal?" Steffen said "he did not know of any deal," but asked to discuss Zimmerlin's promise and the status of the estate. Jones claimed he did not remember acknowledging, in April 2012, Zimmerlin's promise regarding the "cabin and 20 acres." In July 2014, Steffen received a notice terminating his tenancy.
Katherine Byrne had previously informed Steffen "the estate was tied up in court."
On December 31, 2014, Steffen filed a complaint against Triple Z, Susan Byrne, and Zimmerlin's estate. He alleged various violations of the Labor Code in causes of action one through five, as well as promissory estoppel, unfair business practices, fraud, breach of contract, quiet title, and adverse possession causes of action. The three named defendants demurred. They argued, inter alia, that Steffen's first five causes of action failed because he had only pleaded an employment relationship with Zimmerlin, not with Triple Z. They also argued a two-year statute of limitations "applies to oral employment contracts" and the first two causes of action were barred thereunder. Specifically, the defendants conceded "a three-year statute of limitations applies to statutory claims (payment of overtime, minimum wage, waiting time penalties, etc.)," but insisted that "claims for payment under oral contract (i.e., [Steffen's] request for wages at $20/hour) are subject to a two-year statute of limitations."
In advance of the demurrer hearing, Steffen filed his first amended complaint, which realleged the same causes of action against the same defendants and made only minor amendments. The defendants again demurred and asserted the same arguments raised in their previous demurrer.
The Honorable Arthur A. Wick sustained the demurrer with leave to amend as to all causes of action alleged against Zimmerlin's estate, on the ground the statute of limitations had run. The demurrer was also sustained with leave to amend, as to Steffen's promissory estoppel, fraud, breach of oral contract, and quiet title causes of action. The demurrer was sustained without leave to amend as to Steffen's adverse possession cause of action and "the non-statutory wage claims" within counts one through five. The trial court overruled the demurrer to the statutory wage claims (in counts one through five), as well as Steffen's cause of action for unfair business practices.
Because only counts one through five are at issue on appeal, we do not further address Steffen's additional causes of action.
On November 20, 2015, Steffen filed his SAC against Triple Z, Susan Byrne, Katherine Byrne, and Jones. In relevant part, the SAC asserts the following claims (against Triple Z only): (1) unpaid hourly wages, overtime, and expenses in violation of sections 201, 203, 204, and 2802; (2) failure to pay all wages due at time of termination under sections 201, 202, and 203; (3) waiting time penalties under section 203; (4) failure to provide itemized wage statements in violation of section 226; and (5) unpaid minimum wages and overtime compensation in violation of sections 1194 and 1198. In both causes of action one and five, Steffen seeks to recover unpaid minimum wages and overtime, alleging he often worked in excess of eight hours per day and 40 hours per week, but was not paid overtime compensation and in many instances not compensated at all. In his second cause of action, Steffen alleges Triple Z failed to timely pay unpaid regular and overtime compensation when he was discharged. In his third cause of action, Steffen alleges he is entitled to penalties under section 203 because Triple Z's failure to pay wages was willful. In his fourth cause of action, Steffen alleges Triple Z failed to furnish him with statements of his hours worked.
Steffen elected not to amend his causes of action against Zimmerlin's estate, and the estate was dismissed with prejudice.
Triple Z demurred, renewing its alternative arguments that Steffen's wage claims were barred by the statute of limitations or failed to state facts showing the existence of an employment relationship between Steffen and Triple Z. Specifically, Triple Z argued Steffen's first and second causes of action were barred by the applicable statute of limitations. Triple Z also asked the trial court to take judicial notice of Steffen's declaration, dated January 12, 2015, filed in support of a motion to quash in an unlawful detainer action.
In its memorandum in support of the demurrer, Triple Z only fleshed out the following argument: "An employee's claim under . . . § 2802 for reimbursement of business expenses accrues as of the date the employee incurs the particular expense. A three-year statute of limitations applies. ([Code Civ. Proc.,] § 338(a).) [Steffen] failed to plead sufficient facts to show that he incurred expenses within three years of the filing of the Complaint."
Steffen opposed the demurrer, arguing in relevant part that "it is certainly reasonable to assume that when Zimmerlin promised Steffen the property that was owned by the limited liability company for which he was the only identified officer, member and agent . . . , he was either doing so on behalf of the company . . . or there was, as alleged, a unity of interest and ownership sufficiently alleged. . . . [¶] [N]othing in the [SAC] excludes Triple Z from the agreement entered in 2008, but rather, specifies that the promise was made (i.e., the words were stated) by Zimmerlin. [¶] . . . [¶] That the promise was made by Zimmerlin cannot conceivably defeat the claims; certainly Triple Z itself could not have stated the promise, and the fact that Zimmerlin was at that time the only identified officer, member or agent of Triple Z, further undermines [Triple Z's] contention." Steffen also insisted he "alleged sufficient facts to describe the employment relationship, or at a minimum, sufficiently so that an inference of the relationship can be drawn."
A plaintiff may plead an employer/employee relationship explicitly or with allegations from which an inference such a relationship can be drawn. (See, e.g., Burke v. Zanes (1961) 193 Cal.App.2d 773, 780.)
With respect to Steffen's causes of action one through five, the Honorable Allan D. Hardcastle sustained Triple Z's demurrer without leave to amend. The trial court explained: "Causes of Action 1-5 are based on Labor Code provisions which apply to employers and employees. [Steffen] urges that a three-year statute of limitations applies pursuant to [Code of Civil Procedure] section 338[, subdivision (a)] and that the claims are timely. [Steffen] also claimed that he had an employment relationship with [Triple Z]. [Triple Z] argues that [Steffen] fails to allege in his [SAC] that he was an employee or that [Triple Z] was his employer. The court notes that in paragraph 29 of the [SAC] [Steffen] claims he did not know that Triple Z Ranch owned the [Property] 'until after this action was commenced.' (December 31, 2014 is the date the first complaint was filed). [Steffen] cannot allege in a timely claim that he is owed wages from an employer whose identity he did not know until after he filed his complaint." (Italics added.)
Steffen filed a timely notice of appeal from the subsequent judgment of dismissal.
II. DISCUSSION
In its demurrer, Triple Z argued Steffen's SAC failed to state a cause of action because he had failed to plead an employment relationship with the entity and because causes of actions one and two were barred by the statute of limitations. On appeal, Steffen argues the trial court erred by accepting either ground. Triple Z now concedes the applicable statute of limitations (Code Civ. Proc., § 338, subd. (a)) does not bar Steffen's statutory wage claims. However, Triple Z continues to press its "employment relationship" argument and insists, for the first time, that Steffen cannot establish any statutory wage claim because the promised compensation under the 2008 agreement—the cottage—does not constitute "wages" within the meaning of the Labor Code.
The trial court's demurrer ruling does not make clear on which ground it relied. Because we must affirm the trial court's decision if it is correct for any reason, regardless of the trial court's stated reasons (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967), we will examine all three arguments. All three arguments are improperly focused on the terms of the 2008 agreement and Triple Z's repeated premise that "this is [only] a promise to make a will case." Triple Z and the trial court apparently fail to recognize the dual nature of the claims at issue and that Steffen's statutory wage rights are unwaivable. (Verdugo v. Alliantgroup, L.P. (2015) 237 Cal.App.4th 141, 150.) Under California labor law, "if 'an employer fails to pay wages in the amount, time or manner required by contract or by statute, the employee has two principal options. The employee may seek judicial relief by filing an ordinary civil action against the employer for breach of contract and/or for the wages prescribed by statute. (§§ 218, 1194.)" (Reynolds v. Bement (2005) 36 Cal.4th 1075, 1084, italics added & omitted; Sampson v. Parking Service 2000 Com., Inc. (2004) 117 Cal.App.4th 212, 218.) A. Standard of Review
Preliminarily, we observe that, because Judge Wick previously overruled Triple Z's demurrer to the first amended complaint's first through fifth statutory causes of action on the same grounds, Judge Hardcastle was arguably "foreclosed from rendering a new determination on the viability of those claims unless some new facts or circumstances were brought to his attention." (Bennett v. Suncloud (1997) 56 Cal.App.4th 91, 96-97, fn. omitted; accord, Berg & Berg Enterprises, LLC v. Boyle (2009) 178 Cal.App.4th 1020, 1035 ["where a prior demurrer was sustained as to some causes of action but overruled as to others, a defendant may not demur again on the same grounds to those portions of an amended pleading as to which the prior demurrer was overruled" (italics omitted)]; Code Civ. Proc., § 1008; but see Carlton v. Dr. Pepper Snapple Group, Inc. (2014) 228 Cal.App.4th 1200, 1211 ["[i]f the demurrer is erroneously overruled, [the demurring defendant] is acting properly in raising the point again, at his next opportunity"; "[i]f the trial judge made the former ruling himself, he is not bound by it"]; Pavicich v. Santucci (2000) 85 Cal.App.4th 382, 389 & fn. 3 [same].) However, even if the trial court was foreclosed from reconsidering its prior ruling, we remain free to review both orders and render an opinion based on the correct rule of law. (Bennett, at p. 97.)
In reviewing a judgment of dismissal following a demurrer sustained without leave to amend, we may affirm the demurrer ruling only if the complaint fails to state a cause of action under any possible legal theory. (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 810.) This court exercises its independent judgment as to whether the complaint states a cause of action as a matter of law. (Los Altos El Granada Investors v. City of Capitola (2006) 139 Cal.App.4th 629, 650.)
We are "not bound by the trial court's construction of the complaint." (Wilner v. Sunset Life Ins. Co. (2000) 78 Cal.App.4th 952, 958.) We give the complaint a reasonable interpretation and accept as true the well-pleaded material facts, as well as the reasonable inferences that may be drawn therefrom. (Evans v. City of Berkeley (2006) 38 Cal.4th 1, 6; Reynolds v. Bement, supra, 36 Cal.4th at p. 1083.) "Whether the plaintiff will be able to prove these allegations is not relevant; our focus is on the legal sufficiency of the complaint." (Los Altos Golf & Country Club v. County of Santa Clara (2008) 165 Cal.App.4th 198, 203, italics omitted.)
We also consider matters that may be judicially noticed. (Committee for Green Foothills v. Santa Clara County Bd. of Supervisors (2010) 48 Cal.4th 32, 42; Reynolds v. Bement, supra, 36 Cal.4th at p. 1083.) However, " '[a] demurrer is simply not the appropriate procedure for determining the truth of disputed facts,' [citation], judicial notice of matters upon demurrer will be dispositive only in those instances where there is not or cannot be a factual dispute concerning that which is sought to be judicially noticed." (Cruz v. County of Los Angeles (1985) 173 Cal.App.3d 1131, 1134.) "[T]he 'demurrer tests the pleading alone and not the evidence or other extrinsic matters which do not appear on the face of the pleading or cannot be properly inferred from the factual allegations of the complaint. This principle means that if the pleading sufficiently states a cause of action the demurrer cannot be granted on the basis of a showing of extrinsic matters by inference from attached exhibits, affidavits or otherwise except those matters which are subject to judicial notice.' " (Bach v. McNelis (1989) 207 Cal.App.3d 852, 864.) B. Statute of Limitations
Steffen maintains his statutory wage claims are not barred by the statute of limitations. He points to Code of Civil Procedure section 338, subdivision (a), which applies a three-year statute of limitations to "[a]n action upon a liability created by statute, other than a penalty or forfeiture." (Italics added.) Triple Z makes no attempt to defend the trial court's statute of limitations ruling on any of the five causes of action. It concedes, both implicitly on appeal and expressly before the trial court, that Code of Civil Procedure section 338 applies. (Cuadra v. Millan (1998) 17 Cal.4th 855, 859 ["[i]f based on a wage liability created by statute," an action for unpaid wages must be commenced "within three years after accrual"], disapproved on other grounds in Samuels v. Mix (1999) 22 Cal.4th 1, 16, & fn. 4.) Furthermore, Triple Z does not argue that all of Steffen's claims accrued more than three years before December 31, 2014, when Steffen filed his original complaint.
Triple Z's concessions are appropriate. " 'A demurrer on the ground of the bar of the statute of limitations will not lie where the action may be, but is not necessarily barred.' [Citations.] It must appear clearly and affirmatively that, upon the face of the complaint, the right of action is necessarily barred." (Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 881, italics added.) "[A] demurrer cannot rightfully be sustained to part of a cause of action or to a particular type of damage or remedy." (Kong v. City of Hawaiian Gardens Redevelopment Agency (2003) 108 Cal.App.4th 1028, 1047.) Nothing on the face of the SAC shows any of Steffen's first five causes of action would be wholly barred by the three-year statute of limitations.
Steffen filed suit on December 31, 2014. Thus, as long as some of his claims accrued after December 31, 2011, they are timely. (See Code Civ. Proc., § 338, subd. (a).) Steffen contends his causes of action did not accrue until Zimmerlin's death in March 2012. We need not decide the delayed accrual argument because, even under the generally applicable accrual rules, at least some of Steffen's claims are timely. "A cause of action for unpaid wages accrues when the wages first become legally due, i.e., on the regular payday for the pay period in which the employee performed the work; when the work is continuing and the employee is therefore paid periodically (e.g., weekly or monthly) a separate and distinct cause of action accrues on each payday, triggering on each occasion the running of a new period of limitations." (Cuadra v. Millan, supra, 17 Cal.4th at p. 859, italics omitted.)
Steffen admits he was paid for his work through April 2008, as well as his work after approximately April 2012. Although the statute of limitations may have run for some period of Steffen's uncompensated work, Steffen's fifth cause of action explicitly focuses on the time period between November 2011 and March 2012. Steffen's claims for unpaid minimum and overtime wages based on work done between December 31, 2011, and March 2012 are timely. Furthermore, Steffen's second cause of action is based on failure to pay unpaid compensation at the time of discharge, which is alleged to have occurred sometime between "late 2013" and July 2014. Steffen's fourth cause of action is for Triple Z's "regular and ongoing" failure to provide itemized statements of hours worked. To the extent Triple Z failed to provide such statements at any time between December 31, 2011, and Steffen's discharge in 2013 or 2014, his claims are timely.
The trial court's ambiguous ruling emphasizes Steffen's acknowledgement in his SAC that he did not know the cottage was owned by Triple Z, or that Zimmerlin lacked actual authority to encumber or transfer Triple Z's real property without the approval of a majority of its members, "until after this action was commenced." (Italics added.) But no legal or factual basis exists for treating this allegation as dispositive. Steffen correctly points out that he did allege, in his timely original complaint, that the Property was owned by Triple Z and that Zimmerlin was its majority owner.
Even if we assume, without deciding, that Steffen was not aware of Triple Z's ownership of the Property until after the original complaint was filed, neither the trial court nor Triple Z point to any authority requiring a plaintiff to have such knowledge in order to file a timely cause of action. In fact, the authority is to the contrary. "The right of a plaintiff to use a fictitious name where he is ignorant of the defendant's true name is one conferred by statute (Code Civ. Proc., § 474), and it has long been recognized that the purpose of the provision is to enable such a plaintiff to bring suit before it is barred by the statute of limitations . . . ." (Austin v. Massachusetts Bonding & Insurance Co. (1961) 56 Cal.2d 596, 602.) "Where a complaint sets forth, or attempts to set forth, a cause of action against a defendant designated by fictitious name and his true name is thereafter discovered and substituted by amendment, he is considered a party to the action from its commencement so that the statute of limitations stops running as of the date of the earlier pleading." (Id. at p. 599.)
The trial court erred in concluding Steffen's first through fifth causes of action were barred by the statute of limitations. C. Sufficient Allegations to Plead Employment Relationship with Triple Z
We turn to the next issue—whether Steffen adequately pleaded an employment relationship with Triple Z. In its demurrer to the SAC, Triple Z clearly argued Steffen's causes of action one through five failed because he had not pleaded the existence of an employment relationship with Triple Z, as opposed to Zimmerlin personally. Steffen maintains the trial court's ruling cannot be justified on this ground. Steffen asserts he alleged sufficient facts to describe his employment relationship with Triple Z or, at a minimum, to infer the existence of such a relationship.
The parties focus on the common law test for distinguishing an employee from an independent contractor—control over the person's time, place and manner of work. (S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341, 354-355.) However, at least for purposes of Steffen's section 1194 cause of action, a broader definition is applied. (Martinez v. Combs (2014) 49 Cal.4th 35, 62 (Martinez) [the applicable Industrial Welfare Commission wage order "and not the common law, properly defines the employment relationship in [an] action under section 1194"]; but see Ayala v. Antelope Valley Newspapers, Inc. (2014) 59 Cal.4th 522, 531 [declining to decide "what application, if any, the wage order tests for employee status might have to wage and hour claims"]; Futrell v. Payday California, Inc. (2010) 190 Cal.App.4th 1419, 1428-1429 [applying Martinez to question whether payroll company was employer for purposes of sections 203, 226, 510, and 1194].)
Under either of the applicable wage orders, an employee is "any person employed by an employer," an employer is one who "employs or exercises control over the wages, hours, or working conditions of any person" and "[e]mploy" means "to engage, suffer, or permit to work." (Cal. Code Regs., tit. 8, §§ 11150, subd. 2(E)-(G), 11160, subd. 2(G)-(I).) In Martinez, our Supreme Court concluded: "To employ, then, under the [Industrial Welfare Commission's] definition, has three alternative definitions. It means: (a) to exercise control over the wages, hours or working conditions, or (b) to suffer or permit to work, or (c) to engage, thereby creating a common law employment relationship." (Martinez, supra, 49 Cal.4th at p. 64.)
Under the first test, control over wages, hours, or working conditions can be exercised either "directly or indirectly, or through an agent or any other person." (See, e.g., Cal. Code Regs., tit. 8, § 11150, subd. 2(G).) "The verbs 'to suffer' and 'to permit' . . . are terms of art in employment law." (Martinez, supra, 49 Cal.4th at p. 64.) Under the second test, "[t]he basis of liability is the defendant's knowledge of and failure to prevent the [illegal] work from occurring." (Id. at 70, italics omitted.) Joint employment is also recognized. "Joint employment occurs when two or more persons engage the services of an employee in an enterprise in which the employee is subject to the control of both." (In-Home Supportive Services v. Workers' Comp. Appeals Bd. (1984) 152 Cal.App.3d 720, 732; accord, Guerrero v. Superior Court (2013) 213 Cal.App.4th 912, 917, 955.) " ' "The question of whether an employment relationship exists ' "is generally a question reserved for the trier of fact." ' . . . This remains true '[w]here the evidence, though not in conflict, permits conflicting inferences.' . . . However, if neither the evidence nor inferences are in conflict, then the question of whether an employment relationship exists becomes a question of law . . . ." ' " (Aleksick v. 7-Eleven, Inc. (2012) 205 Cal.App.4th 1176, 1187.)
Steffen asserts his SAC alleges facts from which an inference of an employer-employee relationship can be drawn. Steffen alleges that, in July 2002, he and Zimmerlin agreed "[Steffen] would pay $800.00 a month [in] rent, but that any work [Steffen] did for Zimmerlin or Triple Z would be credited against his rent." (Italics added.) Steffen also alleges, on information and belief, that Zimmerlin had "ostensible and/or actual authority to bind Triple Z to contracts, [and] to hire and fire employees."
We agree with Steffen that by alleging the basic terms of the 2002 and 2008 agreements, Triple Z's ownership of the Property, Zimmerlin's direction of his services, and by alleging that Zimmerlin was Triple Z's managing owner and held authority to bind Triple Z and hire and fire employees, an employment relationship with Triple Z was sufficiently pleaded. If Zimmerlin did not own the Property in 2008, as Steffen alleges, we can infer that when he promised the Property to Steffen in exchange for Steffen's services, he did so as an agent for Triple Z. The same inference—that Triple Z exercised control over Steffen's compensation and working conditions—can be taken from Steffen's allegations that he continued working on the Property after Zimmerlin's death. He merely received his directions and pay from Triple Z's remaining members (Susan Byrne and Jones). We can also infer from Steffen's allegations that Triple Z knew of Steffen's work and had the power to prevent him from working on its property.
Steffen's admission, in the judicially noticed declaration filed in support of a motion to quash the unlawful detainer action, that he had a rental agreement with Zimmerlin, not Triple Z, is not dispositive. The absence of a rental agreement with Triple Z, in 2002, does not mean Triple Z could not subsequently employ Steffen.
Triple Z, in seeking to persuade us that Steffen's allegations "are antagonistic to Triple Z being the employer," relies on "allegations" that simply do not exist in the SAC—that Triple Z "was not in business" and Zimmerlin had no authority to bind Triple Z. They do not cite to the record to show any such allegations were made. By failing to cite to the record, Triple Z has waived the argument. (Chicago Title Ins. Co. v. AMZ Ins. Services, Inc. (2010) 188 Cal.App.4th 401, 424; see Cal. Rules of Court, rule 8.204(a)(1)(C).) In any event, even if the first "allegation" is presumed to be true, we fail to see why an entity not being "in business" would negate the possibility it employed a caretaker to maintain its sole asset. The final "allegation" relied on by Triple Z is flatly contradicted by the SAC, in which Steffen clearly alleges Zimmerlin had "authority to bind Triple Z to contracts, and hire and fire employees, and the ostensible authority to encumber and transfer its real property."
Triple Z also contends: "[Steffen] might have been an independent contractor, and not an employee. [Zimmerlin's] 'direction' could have easily been simply direction of 'tasks' and jobs to complete, results to achieve, and it may not have been 'direction' and control as to the manner and means of completing those tasks." " 'Independent contractor' means any person who renders service for a specified recompense for a specified result, under the control of his principal as to the result of his work only and not as to the means by which such result is accomplished." (§ 3353.) "Independent contractors are not 'employees' covered by the wage and hour laws." (Chin et al., Cal. Practice Guide: Employment Litigation (The Rutter Group 2017) ¶ 11:116, p. 11-26.)
However, this is an issue for another day, not one properly resolved on demurrer. "[U]nder California law, once a plaintiff comes forward with evidence that he provided services for an employer, the employee has established a prima facie case that the relationship was one of employer/employee. [Citation.] As the Supreme Court of California has held, '[t]he rule . . . is that the fact that one is performing work and labor for another is prima facie evidence of employment and such person is presumed to be a servant in the absence of evidence to the contrary.' [Citations.] Once the employee establishes a prima facie case, the burden shifts to the employer, which may prove, if it can, that the presumed employee was an independent contractor." (Narayan v. EGL, Inc. (9th Cir. 2010) 616 F.3d 895, 900.)
Triple Z returns to Steffen's admission that he did not know Triple Z owned the Property, arguing it is dispositive. They contend Steffen could not rely on Zimmerlin's ostensible authority to bind Triple Z when Steffen was not aware of Triple Z's existence. (See Civ. Code, §§ 2300 ["[a]n agency is ostensible when the principal intentionally, or by want of ordinary care, causes a third person to believe another to be his agent who is not really employed by him"], 2317 ["[o]stensible authority is such as a principal, intentionally or by want of ordinary care, causes or allows a third person to believe the agent to possess"]; Chicago Title Ins. Co. v. AMZ Ins. Services, Inc., supra, 188 Cal.App.4th at p. 426 [" '[o]stensible authority arises as a result of conduct of the principal which causes the third party reasonably to believe that the agent possesses the authority to act on the principal's behalf' " (italics omitted)].) The problem with Triple Z's argument is that it ignores Steffen's allegation of actual authority. "An agency is either actual or ostensible." (Civ. Code, § 2298, italics added.)
At this stage, we cannot determine as a matter of law that Triple Z was not Steffen's "employer." D. Labor Code Definition of Wages
In a last-ditch effort, Triple Z argues that none of Steffen's first five counts states a statutory wage claim because the cottage Steffen was allegedly promised cannot constitute "wages." (See §§ 201, subd. (a) ["[i]f an employer discharges an employee, the wages earned and unpaid at the time of discharge are due and payable immediately" (italics added)], 202, subd. (a) ["[i]f an employee not having a written contract for a definite period quits his or her employment, his or her wages shall become due and payable not later than 72 hours thereafter" (italics added)], 203, subd. (a) ["[i]f an employer willfully fails to pay . . . any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty" (italics added)], 204, subd. (a) ["[a]ll wages . . . earned by any person in any employment are due and payable twice during each calendar month" (italics added)], 226 ["[a]n employer, semimonthly or at the time of each payment of wages, shall furnish to his or her employee . . . an accurate itemized statement in writing showing . . . gross wages earned" (italics added)].)
Triple Z did not raise this argument in its demurrer. The trial court did not address the argument. We generally do not review theories not argued in the trial court. (De Anza Santa Cruz Mobile Estates Homeowners Assn. v. De Anza Santa Cruz Mobile Estates (2001) 94 Cal.App.4th 890, 906, 908.) However, " 'a litigant may raise for the first time on appeal a pure question of law which is presented by undisputed facts.' " (Id. at p. 908; accord, Home Ins. Co. v. Zurich Ins. Co. (2002) 96 Cal.App.4th 17, 22.) "A demurrer is directed to the face of a complaint (Code Civ. Proc., § 430.30, subd. (a)) and it raises only questions of law (Code Civ. Proc., § 589, subd. (a); [citation]). Thus an appellant challenging the sustaining of a general demurrer may change his or her theory on appeal [citation], and an appellate court can affirm or reverse the ruling on new grounds." (B & P Development Corp. v. City of Saratoga (1986) 185 Cal.App.3d 949, 959.)
The Labor Code defines " 'Wages' " to "include[] all amounts for labor performed by employees of every description, whether the amount is fixed or ascertained by the standard of time, task, piece, commission basis, or other method of calculation." (§ 200, subd. (a), italics added.) Triple Z seizes on the italicized statutory language and argues: "The alleged agreement was to bequeath a Cottage in exchange for dedicated services. This cannot be converted into statutory wage claims. This is not an agreement to pay 'wages'; there is no 'amount' of money involved."
"Courts have recognized that 'wages' also include those benefits to which an employee is entitled as a part of his or her compensation, including money, room, board, clothing, vacation pay, and sick pay." (Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1103.)
We are wholly unpersuaded by Triple Z's attempt to characterize Steffen's SAC as seeking specific performance of the 2008 agreement. Although at one point Steffen may have had a quantum meruit claim for the reasonable value of services provided in reliance on the 2008 promise, the only relevant causes of action for purposes of this appeal are the statutory claims stated in counts one through five of the SAC. The SAC's first five causes of action make clear that Steffen is suing for Labor Code violations and unpaid minimum and overtime wages.
Triple Z relies on International Business Machines Corp. v. Bajorek (9th Cir. 1999) 191 F.3d 1033 (Bajorek), in which IBM issued stock options to its employee, under an agreement wherein he promised to return any profit from the options if he worked for a competitor within six months after he exercised his options. When the employee left IBM, and immediately went to work for a competitor, IBM rescinded his stock options and demanded the profit he had made from exercising them. (Id. at pp. 1035-1036.) In considering the employee's argument that the profit constituted paid "wages," which an employer cannot take back (§ 221), the Ninth Circuit Court of Appeals concluded stock options did not meet section 200's definition of wages because they "are not 'amounts,' " but rather "contractual rights to buy shares of stock." (Id. at p. 1039; see id. at pp. 1038-1040.) The Bajorek court explained: "The amount of money for which the shares can be sold on the market varies unpredictably from time to time, so it is not 'fixed or ascertainable' by any method of calculation when the agreements are made or exercised. Even where stock options may be awarded pursuant to plans giving rise to expectations of stock awards, and are not awarded according to such plans, they ordinarily do not give rise to an expectation of a calculable sum of money. The value of the stock awarded in options may be as much affected by the fortuities of stock market behavior as by the profitability of the company." (Id. at p. 1039, fn. omitted.)
Bajorek is distinguishable, as it did not involve a cause of action for unpaid minimum wages and overtime compensation. Unlike the employee in Bajorek, Steffen is not asserting that the cottage constitutes "wages." Steffen alleges: "From November 2011 through March 2012, [Steffen] often worked hours in excess of eight hours in a day, forty hours per week, and on the seventh day of a workweek. . . . [¶] . . . Defendants failed and refused to compensate Steffen in an amount to be proven at trial for the overtime hours he worked at the required overtime rate, and in many instances did not compensate [him] for any of the hours worked at all." (Italics added.) Contrary to Triple Z's assertion that Steffen has no statutory wage claim because he explicitly agreed to work, not for wages, but for a testamentary bequest, "California courts repeatedly have recognized sections 219 and 1194 make the Labor Code provisions [providing for minimum wage and overtime compensation] unwaivable, and also make any contract purporting to waive those rights illegal and unenforceable." (Verdugo v. Alliantgroup, L.P., supra, 237 Cal.App.4th at p. 150.)
Steffen misplaces his reliance on McAfee v. Metro. Life Ins. Co. (E.D.Cal., May 23, 2006, Civ. No. S-05-0227 WBS KJM) 2006 U.S.Dist. Lexis 33070. McAfee considered whether performance-based stock options met an ERISA disability insurance plan's definition of "predisability earnings" and has no relevance here.
Section 219, subdivision (a), provides in relevant part: "[N]o provision of this article can in any way be contravened or set aside by a private agreement, whether written, oral, or implied." Section 1194, subdivision (a), provides: "Notwithstanding any agreement to work for a lesser wage, any employee receiving less than the legal minimum wage or the legal overtime compensation applicable to the employee is entitled to recover in a civil action the unpaid balance of the full amount of this minimum wage or overtime compensation, including interest thereon, reasonable attorney's fees, and costs of suit."
The trial court's ruling cannot be upheld on the ground Steffen failed to allege he was due "wages" under the Labor Code. Accordingly, we must reverse the trial court's order sustaining Triple Z's demurrer to the SAC without leave to amend.
III. DISPOSITION
The judgment is reversed. The matter is remanded for entry of a new order overruling the demurrer to Steffen's first through fifth causes of action in the second amended complaint. Steffen is entitled to his costs on appeal.
/s/_________
BRUINIERS, J. WE CONCUR: /s/_________
SIMONS, Acting P. J. /s/_________
NEEDHAM, J.