Opinion
E062678
01-04-2017
VIRGINIA RODRIGUEZ et al., Plaintiffs and Respondents, v. EXEL, INC., Defendant and Respondent; RUBIN CHAPPELL et al., Objectors and Appellants.
The Spivak Law Firm and David Spivak; Law Offices of Louis Benowitz and Louis Benowitz for Objector and Appellant Rubin Chappell. The Nourmand Law Firm, Michael Nourmand and James A. De Sario; Bibiyan & Bokhour, David D. Bibiyan and Mehrdad Bokhour for Objector and Appellant Gabriel M. Garcia. Ice Miller and John P. Gilligan; Esner, Chang & Boyer and Holly N. Boyer for Defendant and Respondent Exel, Inc. James Hawkins, James R. Hawkins and Alvin B. Lindsay; Gupta Wessler, Deepak Gupta and Neil K. Sawhney for Plaintiff and Respondent Virginia Rodriguez.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super.Ct.No. CIVDS1104594) OPINION APPEAL from the Superior Court of San Bernardino County. Bryan Foster, Judge. Dismissed. The Spivak Law Firm and David Spivak; Law Offices of Louis Benowitz and Louis Benowitz for Objector and Appellant Rubin Chappell. The Nourmand Law Firm, Michael Nourmand and James A. De Sario; Bibiyan & Bokhour, David D. Bibiyan and Mehrdad Bokhour for Objector and Appellant Gabriel M. Garcia. Ice Miller and John P. Gilligan; Esner, Chang & Boyer and Holly N. Boyer for Defendant and Respondent Exel, Inc. James Hawkins, James R. Hawkins and Alvin B. Lindsay; Gupta Wessler, Deepak Gupta and Neil K. Sawhney for Plaintiff and Respondent Virginia Rodriguez.
The trial court entered a judgment approving the settlement of a class action against defendant and respondent Exel, Inc. (Exel) by its present and former employees, who sought damages and penalties for allegedly unpaid minimum and overtime wages, failure to provide meal and rest periods, and other Labor Code violations and unfair business practices, from April 11, 2011 through the date of the preliminary approval of the settlement. Objectors and appellants Rubin Chappell (Chappell) and Gabriel M. Garcia (Garcia), class members who objected to the settlement, appeal, contending the trial court abused its discretion in concluding (1) Plaintiff and respondent Virginia Rodriguez (Rodriguez) qualified as a class representative; (2) the parties provided the class members with sufficient notice of the terms of the settlement; (3) it was proper for the parties to release time-barred and stricken class claims; and (4) the settlement is fair, reasonable, and adequate.
I. PROCEDURAL BACKGROUND AND FACTS
A. Pleadings
Virginia Rodriguez worked for Exel, a warehousing services company in California, in its facility in Bloomington from September 2006 to July 2010. On April 11, 2011, Rodriguez filed this action in San Bernardino County Superior Court on behalf of herself and other similarly situated current and former nonexempt employees of Exel, claiming that the company maintained policies and practices that violated California's wage and hour laws. More specifically, she alleged meal and rest break claims; unpaid wages claims; (including failure to timely pay wages and provide accurate wage statements, and failure to pay hourly wages including overtime); and failure to comply with California's unfair competition law (Bus. & Prof. Code, § 17200 et seq.).
B. Pretrial Proceedings
After Rodriguez filed her complaint, the parties conducted discovery. On March 6, 2012, Exel moved to strike Rodriguez's class allegations on the grounds that her "claims are unique and should be adjudicated on an individual basis." Over Rodriguez's opposition, the trial court granted, in part, Exel's motion, striking her class allegations as to four of her five claims. The motion was denied as to Rodriguez's unpaid wages/overtime claim. While Rodriguez did not appeal the trial court's ruling, she "maintained throughout [the litigation] to Exel . . . that there [were] strong arguments for seeking reversal on appeal of the stricken claims, and that [she] would do so in the event the parties were unable to reach an amicable negotiated resolution." Exel "recognized that any negotiated resolution of this case would necessarily involve a class-wide settlement of all of the wage and hour claims, including the MRB [meal and rest break] claims." The parties continued the discovery process and engaged in informal settlement discussions. When the parties were unable to informally reach an agreement, they conducted a private mediation on March 20, 2013.
C. Chappell's Action
On February 1, 2012, Chappell filed a putative class action against Exel in Los Angeles County Superior Court (case No. BC477968; Chappell action). The complaint was amended on June 1, 2012. Chappell was employed by Exel as a forklift operator at its Carson facility from July 2007 to October 2011. He asserted: (1) unpaid wages; (2) waiting time penalties; (3) wage statement penalties; (4) unfair competition (Bus. & Prof. Code, § 17200 et seq.); and (5) civil penalties under California's Labor Code sections 2699 et seq. Chappell asserts that his claims are different from Rodriguez's claims because Rodriguez did not mention "failures to pay overtime wages to Exel's Carson employees based on a defective alternative workweek schedule and the Bonus Overtime claims," and he "defines the class period to include all of Exel's hourly California employees for the period from February 1, 2008 through entry of final judgment." However, Chappell did not separately plead an "alternative workweek" claim or otherwise distinguish it from his unpaid wage claims. Similarly, his meal period claims are contained in his unfair competition claims. Chappell and Exel engaged in discovery on Chappell's claims.
An alternative workweek schedule included four 10-hour days per week (the "Carson 4/10 AWS").
D. Garcia's Action
On November 5, 2013, Garcia filed a wage and hour class action in Los Angeles Superior Court (case No. BC526550; Garcia action). Garcia's complaint includes claims for (1) failure to provide meal and rest breaks; and (2) unpaid wage claims, including, failure to pay overtime wages; failure to pay minimum wages; failure to pay wages upon termination; failure to provide accurate wage statements; and unfair competition. Garcia's claims are similar to those of Rodriguez and Chappell; however, he adds a claim of unlawful rounding of hours.
E. Rodriguez's Amended Complaint and Settlement
On December 13, 2013, Chappell filed a motion for class certification. Simultaneously, Rodriguez and Exel were discussing settlement. The Los Angeles County Superior Court ordered the Chappell and Garcia actions stayed pending the Rodriguez settlement's resolution. Thus, the Los Angeles County Superior Court had yet to rule on Chappell's motion for class certification.
On March 20, 2014, Rodriguez and Exel filed its stipulation for an order granting Rodriguez leave to file a first amended complaint (FAC). The FAC expanded the class to include employees with overtime claims. On April 11, 2014, Rodriguez and Exel filed their stipulation of class action settlement (Settlement Agreement). The parties agreed on a class definition that included: "[A]ll persons who are or were employed by [Exel] in California in hourly, non-exempt positions, however titled, from April 11, 2007 through the date of preliminary approval of the Settlement Agreement, who allege: [¶] 1) they were not paid all wages earned, including regular and overtime wages related to the payment of non-discretionary bonuses . . . or were otherwise not compensated for all hours worked at the appropriate rate of pay; and/or [¶] 2) they were not provided legally compliant rest and meal breaks and were not provided premium wages for each alleged meal and rest violation . . . ." The Settlement Agreement involved about 3,494 employees and provided for a common fund of $2.99 million from which claims would be paid. Class members who wished to participate were required to submit claim forms; the settlement administrator would then calculate the individual settlement payments based on the class member's total number of compensable workweeks. Exel agreed to guarantee 55 percent of the net settlement amount; that is, if the total amount claimed did not equal that percentage, Exel would increase the payments to participating class members "on a pro rata basis" so that the amount distributed was at least 55 percent of the total fund. Any unclaimed amount would revert to Exel, and Exel would not oppose a claim for attorney fees up to one-third of the common fund.
The terms of the settlement included a common fund of $2,999,999.99, which established a maximum net settlement amount of $1,918,850; plus attorney fees in the amount of $999,899.99; a payment of $25,000 for violation of the Labor Code Private Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2698 et seq.); and enhancement to Rodriguez in the amount of $7,500; and administrator costs up to $25,000.
On June 3, 2014, the parties submitted an amended settlement agreement (Amended Settlement Agreement) for preliminary approval. Except for two changes, the terms were materially identical to the initial settlement. First, the parties revised the Settlement Agreement to clarify that, if the court were to deny approval to certain claims, the fund would be reduced by the amount allocated to those claims. Second, the parties amended the class release to "clarif[y] the release of claims by Settlement Class Members, and [track] the claims and allegations in the First Amended Complaint." The parties acknowledged to the court that the latter amendment clarified that "the release of the unpaid wages cause of action is and has been intended to be a global release of all unpaid wages claims." The revised release language, the parties noted, "provide[s] the best practicable notice to the Class Members regarding the Chappell and Garcia cases so they will understand how resolution of the class claims in this action will impact those in Chappell and Garcia." The parties also revised the class notice to reflect the changes in the release. And the parties added substantive information about the Chappell and Garcia actions in the notice, to "enable Settlement Class members to make an informed decision regarding whether to participate in the Settlement in this action."
The revised class notice states: "There are two other ongoing cases where other plaintiffs have alleged similar class claims against Exel to those Plaintiff has alleged on behalf of herself and all other similarly situated Exel employees in this Action." It then provides short summaries of the claims alleged in the Chappell and Garcia actions. The notice further states: "Both the Chappell and the Garcia cases were initiated well after this Action. The claimed causes of action, liability periods, and class scopes of the Chappell and Garcia cases are encompassed under those in this Action, and will be resolved along with the class claims in this Action upon the Court's final approval of the Settlement. The Chappell matter has been deemed related to the Garcia matter." --------
F. Preliminary Approval and Notice
After reviewing the Amended Settlement Agreement, the revised notice, and accompanying materials detailing the extent of discovery and negotiations, the trial court granted preliminary approval on July 2, 2014. The court concluded that the "Settlement is fair, adequate, and reasonable . . . when balanced against the probable outcome of further litigation relating to liability and damages issues." The court noted that "extensive and costly investigation, research and court proceedings have been conducted so that counsels for the parties are able to reasonably evaluate their respective positions." The court also approved the revised notice and claim form, and appointed Rodriguez and her counsel as class representative and class counsel. The settlement administrator mailed class notice to the class members on July 23, 2014.
G. Class Members' Response
After reviewing all claims, including late and deficient, the administrator determined that there were "1,096 valid and accepted claim forms" returned by participating class members submitting claims that included about 37.93 percent of the total number of weeks worked by class members. The participating class members' claims totaled $727,897.31, less than the guaranteed 55 percent of the net settlement; thus, an additional $327,470.19 would be distributed to participating class members on a pro rata basis. Rodriguez's individual settlement payment, not including the named plaintiff enhancement, would be $967.97. Fifteen out of 3,795 class members requested to opt out of the settlement. Four class members objected to the settlement, including Chappell and Garcia. However, Chappell submitted a claim while Garcia did not. Chappell would receive $1,332.53 under the terms of the settlement.
H. Final Approval and Judgment
A fairness hearing was held on October 20, 2014. The trial court took the matter under submission, and on November 12, 2014, after considering all of the "documents submitted by the parties in connection with preliminary and final approval of the Settlement, and . . . all oral arguments presented by counsel for the parties and objectors and the arguments and documents filed by the objectors and the parties' responses thereto," the court overruled the objections. The court concluded that class notice "provided sufficient information so that members were able to decide whether to accept the benefits offered, opt-out and pursue their own remedies, or object to the proposed settlement," and that the settlement was "fair, reasonable, and adequate." On November 13, 2014, the trial court filed an order granting final approval of the settlement.
II. REQUEST FOR DISMISSAL
After this case was fully briefed, the tentative opinion had been drafted and mailed to the parties, and the case was set for oral argument, counsel for both Chappell and Garcia contacted this court stating their intent to request that the appeal be dismissed. Subsequently, both Chappell and Garcia filed their request for dismissal on December 15, 2016.
Pursuant to California Rules of Court, rule 8.244, subdivision (c)(2), "On receipt of a request or stipulation to dismiss, the court may dismiss the appeal and direct immediate issuance of the remittitur." Dismissal is discretionary. While this court strongly encourages parties to resolve their differences, if possible, once the case has been fully briefed, it is assigned to a justice for preparation of the tentative opinion. To that end, valuable court resources are engaged in reviewing the entire record, researching the issues raised, and drafting the tentative opinion. In this case, by the time counsel for both Chappell and Garcia contacted the court, the tentative opinion had been received by the parties and the case was on calendar for oral argument. Again, we note that California Rules of Court, rule 8.244, subdivision (c)(2), gives this court the discretion to dismiss the appeal. Because the resolution of this case is fact specific, we grant the request.
III. DISPOSITION
The appeal is dismissed with prejudice. Respondents are awarded their costs on appeal. (California Rules of Court, rule 8.278, subd. (a)(2).) The Clerk of the Court is directed to issue the remittitur on appeal immediately.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
HOLLENHORST
J. We concur: RAMIREZ
P. J. SLOUGH
J.