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Salaam v. Public Storage, Inc.

Court of Appeals of California, Third Appellate District.
Nov 26, 2003
No. C042295 (Cal. Ct. App. Nov. 26, 2003)

Opinion

C042295.

11-26-2003

MOHAMET SALAAM et al., Plaintiffs and Appellants, v. PUBLIC STORAGE, INC., Defendant and Respondent.


Plaintiffs filed a complaint against defendant Public Storage, Inc. for recovery of unpaid wages and overtime (Lab. Code, § 1194), breach of oral contract, unlawful business practices (Bus. & Prof. Code, § 17200), and conversion. Plaintiffs voluntarily dismissed their claim for breach of oral contract. The trial court dismissed their conversion claim.

Plaintiffs filed a motion seeking class certification on the alleged Labor Code and Business and Professions Code violations. The trial court denied that motion, finding that common issues of fact did not predominate. Plaintiffs appeal.

Plaintiffs also sought class certification on the conversion claim but later acknowledged that claim had been dismissed.

On September 4, 2003, plaintiffs moved to augment the record with an exhibit lodged with the trial court. Defendant objected that not all documents subject to the augmentation motion had been presented in the trial court. At oral argument, the parties agreed, however, that the addition of the documents to the record on appeal would not change the result. We therefore will deny the motion.

CLASS CERTIFICATION LAW

Class action lawsuits are proper "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.) To obtain class certification, "a party must establish the existence of both an ascertainable class and a well-defined community of interest among the class members." (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435.) A community of interest among the class members will be found when there are "(1) predominant common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class." (Richmond v. Dart Industries, Inc. (1981) 29 Cal.3d 462, 470.) It is not the duty of the court to weigh the merits of the claims. "[W]e view the question of certification as essentially a procedural one that does not ask whether an action is legally or factually meritorious." (Linder v. Thrifty Oil Corp., supra, 23 Cal.4th at pp. 439-440.)

An appeal may be taken from an order denying class certification. (Linder v. Thrifty Oil Co., supra, 23 Cal.4th at p. 435.) However, "[b]ecause 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." (Ibid.) "[U]nless (1) improper criteria were used [citation]; or (2) erroneous legal assumptions were made [citation]" a trial court ruling supported by substantial evidence will not be disturbed. (Richmond v. Dart Industries, Inc., supra, 29 Cal.3d at p. 470.)

FACTS

Defendant is a corporation that owns self-storage properties throughout the nation. Defendant operates roughly 1400 properties. Approximately 400 are in California. Defendant is the largest self-storage company in the United States.

On a nationwide basis, defendants properties are organized into five divisions, two of which include portions of California. Each division is made up of regions. There are five regions in California. Each region contains 55 to 85 properties and is organized into between five and nine districts. A district manager oversees each district.

There are between 250 and 1,700 individual units on each of defendants California properties. Most properties have a property manager and an assistant property manager. The property manager and assistant property manager are usually a married couple that live on-site. There are also relief managers that replace property managers and assistant property managers on their days off.

Defendant has established procedures that its managers follow which are common to all of its employees. Plaintiffs argue these procedures force employees to work unpaid overtime and that defendant knew or should have known this. Defendant contends a fact-finder would have to consider numerous individual issues unique to each district, employee, and property when dealing with the claims presented. Both parties refer to security procedures, closing procedures and delinquent tenant management procedures to bolster their positions.

Security Procedures

Each of defendants properties has an electronic security gate. The gate is active until 7:35 p.m., at which time tenants can no longer open it. Any cars on the property after 7:35 p.m. are locked in. Tenants whose cars are locked in might go to the property manager or assistant property managers on-site home to have them unlock the gate. Defendant refers to several declarations suggesting this occurs infrequently.

John Sambuco, head of one of defendants divisions which has property in California, stated that in some cases where a tenant has been locked in defendant would expect the property manager or assistant property manager to assist that customer. However, it is clear that the manager is under no duty imposed by defendant to assist any tenant after hours. Defendant leaves that choice "to [the managers] best judgment." If managers are not comfortable assisting the tenant, they may use a remote to open the gate or call the police, as the tenant would be trespassing.

There is a disagreement among defendants supervisors as to whether tenant lock-ins are to be considered bona fide emergencies so that prior written approval is not required to work overtime that arises when the manager responds. District managers are authorized to pay managers for anything done outside of normal work hours. When it takes an extended period of time to respond to a tenant lock-in, managers have reported and been paid for their time.

In addition to the electronic gate, about 85 percent of the properties in California have a security alarm. When the alarm goes off, defendant expects its managers to assess the situation in some way. This assessment can range from looking out the window, seeing nothing is wrong and going to bed to calling the police because there is an obvious intrusion. Plaintiffs suggest that the managers should physically check the property when an alarm goes off, but Sambuco stated that managers should not go outside to check the property when an alarm goes off.

Plaintiffs claim that managers are not paid for responding to alarms because district managers are not available to preauthorize the time. Plaintiffs rely on their declarations to prove that defendants employees were not paid: " . . . it was impossible . . . to get pre-approval from my district manager before working this time. Therefore, I was not paid for it." Defendant responds that a manager should call the district manager whenever the police are called and therefore could get authorization for paid overtime. There is no evidence of whether the employees put this time on their timesheets, were paid for it, or called their district managers to seek approval.

Closing Procedures

Defendant has a standard procedure for closing the office at the end of the day. The manager is required to follow defendants procedure. The basic requirements for closing the office include shutting down the computer (which involves printing end-of-day reports, preparing the bank statement, reconciling the cash, reconciling the check and credit card ledgers, and backing up the data files), parking the golf cart, counting the petty cash, emptying the trash, preparing the daily time sheet, and locking the door.

Defendants operating manual states: "The actual starting time for [the closing process] may vary depending on the size of your property and the type of your computer, but usually begins 30 minutes before closing and should take no longer than 20 minutes." Plaintiffs argue that it is impossible to complete the tasks assigned in the allotted time and suggests that a minimum of five minutes of unscheduled overtime must be worked each day. Defendant responds that plaintiffs only reach that conclusion by assuming the closing requirements must be done consecutively, when in fact they should be done concurrently. According to defendant, there is no overtime needed to complete the required tasks. The operating manual, by itself, does not require overtime to complete the closing procedures.

Delinquent Tenant Management Procedures

Defendant has a standard procedure for collecting rent from delinquent tenants, called "Delinquent Tenant Management." Managers are generally expected to follow the delinquent tenant guidelines. However, it is up to the district manager to determine whether they are being followed in a satisfactory manner.

Plaintiffs contend an average sized lot of 500 occupied spaces would require approximately 255 telephone calls per month. If defendants training documents are correct, each call takes an average of 10 minutes. This could result in a maximum of 25 hours per month required to complete the procedures. Plaintiffs declarations suggest that many of defendants employees are not compensated for all of this time.

Defendant counters with Sambucos belief that each call takes one to two minutes and that the training documents are not accurate. This estimate results in 9 to 17 hours of work per month, depending on the property and the need to make the phone calls specific to the property. Plaintiffs scenario presents the number of calls per property, not per person, and does not show those calls cannot be made during business hours. Defendant claims that the size of the property makes a difference in whether the calls can easily be completed in normal business hours and provides a statement that the managers have plenty of time to make calls at the smaller properties.

Plaintiffs also refer to the delinquent tenant procedures ensuring all preliminary lien notices and notices of lien sale are timely mailed. It takes two to three minutes to prepare each letter for mailing. This results in job duties that require between two and three hours mid-month and 40 to 75 minutes at the end of the month. Plaintiffs claim many employees are not paid for this time. Defendant again counters with the argument that this time requirement is per site, not per person and that no evidence exists showing employees are required to complete this work after hours.

THE TRIAL COURTS RULING

The trial court determined class certification was not proper because plaintiffs did not demonstrate that common questions of fact predominated their case. The court observed there were specific factual issues that would require individualized proof. First, the court found that defendant has no corporate policy designed to deny plaintiffs their rightful pay. Instead, defendant vests discretion for overtime in the district managers. Second, the court determined that defendants corporate structure resulted in a decentralized decisionmaking chain that granted the district managers control over those working below them. The court also noted that the various district managers handled overtime differently. Third, and finally, the court concluded that the decentralized nature of the corporation and the large variety in lot sizes resulted in a multiplicity of individual issues regarding authorized overtime that would predominate the case. Accordingly, since individual issues of fact would predominate over class issues, the trial court denied class certification.

ELEMENTS OF UNPAID WAGE ACTION

To prove a claim for unpaid wages, a plaintiff must show (1) the plaintiff performed work for which he or she was not properly compensated and (2) the employer suffered or permitted the work, meaning the employer knew or should have known of the work for which the employee was not paid. The only remaining issue, if the prior two are shown, is the amount of damage (payment for unpaid labor) the plaintiff sustained. (See Morillion v. Royal Packing Co. (2000) 22 Cal.4th 575, 584-585; Hernandez v. Mendoza (1988) 199 Cal.App.3d 721, 726.)

DISCUSSION

I

Trial Court Did Not Rely On Incorrect Legal Assumptions

Plaintiffs first claim on appeal is that the trial court relied on incorrect legal assumptions when ruling on their motion because it misunderstood their theory of the case. (See Richmond v. Dart Industries, Inc., supra, 29 Cal.3d at p. 470.) They assert they could prove on a class-wide basis whether defendant knew or should have known that managers were working unpaid overtime and that defendant did not take reasonable steps to prevent off-the-clock work. Therefore, plaintiffs contend, the trial court improperly focused on whether district managers approved overtime worked by the managers. This argument is not persuasive.

Determining whether each plaintiff in the class worked unreported overtime is an individual issue. This determination must be made considering the way in which each employee goes about his or her mandated duties and how that employees district manager implements the corporate policies. Furthermore, the ruling was, in the courts words, "buttressed by the fact that Defendants storage facilities vary widely in terms of size, location, work load and staffing levels . . . ." Plaintiffs fail in their attempt to base a class action on a purely theoretical reading of the operating manual, divorced from the reality presented in discovery that (1) following the operating manual does not necessarily result in overtime and (2) decisions on whether to permit overtime are made at the district level.

Even if we assume the plaintiffs could show on a class-wide basis that defendant knew or should have known, because of general corporate policies and procedures, that the managers needed to work unpaid overtime, we would not find the trial court abused its discretion in denying class certification. Knowledge or constructive knowledge only pertains to one element of the plaintiffs cause of action, whether the employer suffered or permitted the work. (See Morillion v. Royal Packing Co., supra, 22 Cal.4th at pp. 584-585.) It does not establish that every manager in the class actually worked unpaid overtime and does not broach the issues of how much overtime was worked by each potential class member and whether the overtime was approved and paid for. Thus, the trial court was justified in determining that common issues of fact did not predominate.

The trial court did not misunderstand plaintiffs claim or rely on incorrect legal assumptions. The ruling that common issues of fact do not predominate is sound.

II

Trial Court Used Proper Criteria

Plaintiffs next argue the trial court committed reversible error by failing to consider the benefits of a class action to the parties and to the court when deciding not to certify the class. Plaintiffs argument fails.

Plaintiffs contend a class action is appropriate because (1) many of the potential class members claims are too small to be litigated separately and (2) one court action, instead of a multiplicity of suits, would benefit both the litigants and the courts. These possible benefits, however, do not overcome the fact that this action is not proper for class certification because common issues of fact do not predominate. Here, the trial court properly found there was no well-defined community of interest between class members. It was not necessary to further determine if the benefit to the plaintiffs was great enough to support a class certification. (Linder v. Thrifty Oil Co., supra, 23 Cal.4th at p. 435.)

Because we conclude the trial court did not abuse its discretion in denying plaintiffs class certification motion, we need not consider plaintiffs argument that we should order the trial court to certify the class rather than remanding for a new certification hearing.

DISPOSITION

Plaintiffs motion to augment, dated September 4, 2003, is denied. The order denying class certification is affirmed.

We concur: RAYE, J., ROBIE, J.


Summaries of

Salaam v. Public Storage, Inc.

Court of Appeals of California, Third Appellate District.
Nov 26, 2003
No. C042295 (Cal. Ct. App. Nov. 26, 2003)
Case details for

Salaam v. Public Storage, Inc.

Case Details

Full title:MOHAMET SALAAM et al., Plaintiffs and Appellants, v. PUBLIC STORAGE, INC.…

Court:Court of Appeals of California, Third Appellate District.

Date published: Nov 26, 2003

Citations

No. C042295 (Cal. Ct. App. Nov. 26, 2003)