Plata v. Darbun Enterprises

 

 

 

 

Filed 1/31/14  Plata v. Darbun Enterprises CA4/1

 

 

 

 

 

 

 

>NOT TO BE PUBLISHED IN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  This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115.

 

 

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

 

DIVISION ONE

 

STATE OF CALIFORNIA

 

 

 
>

JAVIER TENORIO PLATA, et al.,               Plaintiffs and Appellants,               v.   DARBUN ENTERPRISES, INC.,               Defendant and Respondent.

D062517         (Super. Ct. No. 37-2011-00059024-    CU-MC-NC)

 

            APPEAL
from a judgment of the Superior Court of
San Diego County, Thomas P. Nugent, Judge. 
Reversed.

            Stillman
& Associates and Philip H. Stillman for Plaintiffs and Appellants.

            Squires,
Sherman & Bioteau and Bruce Sherman for Defendant and Respondent.

            Eighteen
individuals (plaintiffs) filed a superior court complaint against Darbun
Enterprises, Inc. (Darbun) seeking recognition of a 2004 Mexican judgment that
was renewed in July 2008.  The court
sustained Darbun's demurrer without leave to amend on the ground that the Mexican
judgment is a "penalty" and thus not enforceable under California's Uniform Foreign-Country Money Judgments Recognition
Act ("Foreign-Country Judgments Act" or "Act").  (Code Civ. Proc., § 1713 et seq.)[1]

            The
Foreign-Country Judgments Act does not permit enforcement of a foreign judgment
"to the extent" the judgment is a "fine or other penalty."  (§ 1715, subd. (b)(2).) We determine the
court erred in ruling at the pleadings stage that the entire Mexican judgment
is a "penalty" as a matter of law and thus unenforceable in California.  Although a substantial portion of the Mexican
judgment constitutes a penalty, plaintiffs have pled sufficient facts to
overcome the Act's enforcement bar with respect to the remaining portions of
the judgment.  Accordingly, we reverse.[2]

FACTUAL AND PROCEDURAL BACKGROUND

            In
reviewing the court's ruling sustaining the demurrer, we are limited to
considering facts alleged in the complaint
and the attached incorporated documents. 
(See Donabedian v. Mercury Ins.
Co. (2004) 116 Cal.App.4th 968, 994.) 
In its respondent's brief, Darbun discusses numerous facts that are
beyond the scope of the complaint and are unsupported by any citation to the
appellate record.  Under settled rules,
we disregard these unsupported factual assertions.  (See Duarte
v. Chino Community Hospital (1999) 72 Cal.App.4th 849, 856.)

>Complaint

            Plaintiffs'
complaint alleges the following.  Plaintiffs
were employees of Soluciones Tecnologicas de Mexico, S.A. de C.V. (Soluciones).
 Darbun was part of a production unit responsible
for paying wages to Soluciones employees.  After plaintiffs were not paid their wages
due, they "commenced an action" before a Mexican governmental entity known
as the "Labor Relations Board."[3]  Plaintiffs filed this claim on May 31, 2000 and sought "back wages."  


            Darbun
was notified of the action by the Mexican Consulate General and allegedly
appeared and defended the action through its counsel.  Darbun's counsel presented evidence at several
hearings before the Labor Relations Board.  In January 2002, the Labor Relations Board
held a hearing "where Darbun's attorneys . . . appeared on behalf of
Darbun and presented written answers to questions . . . by the Labor Relations
Board . . . ."   

            Two
and one-half years later, in August 2004, the Labor Relations Board entered a
judgment against Darbun in plaintiffs' favor.  Plaintiffs attached to their complaint a copy
of the 44-page Mexican judgment and an English translation of this judgment.   

            In
the Mexican judgment, the Labor Relations Board found "plaintiffs proved
their claims [at] trial," and awarded monetary amounts to each plaintiff.  The translated judgment states that Darbun and
others were responsible for the "rescission" of plaintiffs'
employment on May 9, 2000 after the plaintiffs were informed that "starting
on April 28, [2000] [their] salaries would not be paid."  Although the judgment awards various forms of
monetary relief to plaintiffs, the precise nature and amount of these damages are
not entirely clear.  But viewing the translated
Mexican judgment in the light most favorable to plaintiffs, the amounts Darbun
was required to pay to each plaintiff included: 
(1) 20 days' salary for each year worked; (2) three months' salary; (3)
vacation pay for the years 1998, 1999 and a portion of vacation payment for the
year 2000; (4) a vacation pay bonus; (5) a seniority bonus; (6) payment equal
to 30 days of each plaintiff's last salary; and (7) payment of all unpaid salaries
starting on May 9, 2000 until the day the judgment is paid.  

            With
respect to the last category above, plaintiffs alleged:  "Under Mexican Labor Code, an employee is
not deemed to have been effectively terminated until the employee has been paid
all back wages, sick pay and vacation pay. 
Accordingly, payroll continues to accrue under Mexican law until the [judgment]
is paid.  Thus, the [judgment] continues
to grow at the rate of $16,996.12 Mexican pesos per day, representing the per
diem wages for each of the plaintiffs until such judgment is paid in full." 

            Plaintiffs
renewed the judgment in July 2008.  In
2010, Darbun challenged the validity of the Mexican judgment in the Mexican
court system, "claiming the statute of limitations had run on the judgment
due to an alleged 'conspiracy' between the plaintiffs and the Mexican Labor
Relations Board. . . ."  Plaintiffs allege that this challenge was
rejected, and all appeals have been finally resolved in favor of plaintiffs and
against Darbun.  

            Plaintiffs
first sought to enforce the Mexican judgment in this country by filing an
action in federal court, but that action was dismissed after the grounds for
diversity jurisdiction were eliminated. 
(See Plata v. Darbun Enterprises,
Inc. (S.D. Cal. 2011) 2011 WL 98405, p. *1.) 
Several months later, in October 2011, plaintiffs filed their superior
court complaint alleging a single cause of action under the Foreign-Country
Judgments Act.  Plaintiffs alleged the
Mexican judgment "grants a sum of money" and is "final,
conclusive and enforceable" under Mexican law, and the judgment satisfies
all statutory criteria, including that the Mexican court had personal
jurisdiction over Darbun, the proceeding was before a "fair tribunal," and Darbun appeared
with legal counsel and presented evidence in its defense.  According to plaintiffs, the amount of the
Mexican judgment (including the per diem charge) as of October 1, 2011 is $58,333,994.17 Mexican pesos, and in United States dollars that amount is approximately $4.2 million.  

>Demurrer

            Darbun
filed a demurrer on the sole ground that "the judgment shows on its face
that it is for a penalty and therefore cannot be recognized under California law."
 Darbun acknowledged that the Mexican
judgment indicates Darbun was legally responsible for the "rescission"
of  plaintiffs' employment and that plaintiffs
were unpaid for work performed from April 28, 2000 to
May 9, 2000.  But Darbun claimed the Labor
Relations Board "did not find that Plaintiffs were owed any 'back wages' "
and "did not award a single peso for work performed by Plaintiffs for
which they were not paid."  Darbun
also asserted that the bulk of the monetary award serves only to penalize it
for failing to pay the judgment.   

            In
support, Darbun submitted copies of several translated Mexican statutes.  Of relevance, these statutes:  (1) state a wrongfully terminated worker is
entitled to be reinstated or "be given severance pay in the amount of
three months of wages"; (2) set forth the amount and circumstances under
which a worker is entitled to vacation pay and bonuses; and (3) state that if
the employer does not prove the cause of termination at trial, the employee "shall
be entitled, additionally, regardless of what the attempted action had been, to
be paid the due wages from the date of termination until the time the judgment is fulfilled."  (Italics added.)  Darbun cited to Mexican Amended Federal Labor
Law sections 48, 49, 50, 76, 80, 87. 


            In
opposition, plaintiffs argued that their pleadings show they sought and
recovered compensatory damages, and not merely "penalt[ies]."  They relied on their allegations that in the
underlying Mexican action they sought " 'back wages' due upon
termination . . . .' "  They also identified portions of the Mexican judgment
that "set forth seniority bonuses, lunch breaks, vacation pay, sick pay,
and unpaid profit sharing required by the terms of employment that was required
to be paid but was not."  They further
noted that the Mexican judgment "recites that the plaintiffs worked from
April 28 through May 9 without being paid."  Plaintiffs thus urged the court to overrule
the demurrer because "at least a part of the judgment compensates"
them for unpaid actual wages and other losses resulting from Darbun's improper
conduct. 

            After
a hearing, the court sustained the demurrer without leave to amend, concluding
that "as a matter of law . . . the judgment constitutes an unenforceable
penalty under" California's Foreign-Country Judgments Act.  

DISCUSSION

I.  Review Standard

            On
appeal from a judgment dismissing an action after sustaining a demurrer without leave to amend, the "reviewing
court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material
facts properly pleaded.  [Citations.]  The court does not, however,
assume the truth of contentions, deductions or conclusions of law. 
[Citation.]  The judgment must be affirmed 'if any one of the several
grounds of demurrer is well
taken.  [Citations.]'  [Citation.]  However, it is error for a
trial court to sustain a demurrer
when the plaintiff has stated a cause of action under any possible legal
theory.  [Citation.]  And it is an abuse of discretion to sustain a demurrer without leave to amend if the
plaintiff shows there is a reasonable possibility any defect identified by the
defendant can be cured by amendment."  (Aubry v. Tri-City Hospital
Dist. (1992) 2 Cal.4th 962, 967.)  We
apply a de novo standard in reviewing the court's ruling sustaining the
demurrer.  (Lazar v. Hertz Corp. (1999)
69 Cal.App.4th 1494, 1501.)

II.  California's Foreign-Country Judgments Act

            Foreign
country money judgments are enforceable in California if they
meet the requirements of the Foreign-Country Judgments Act.  (§ 1716, subd. (a).)  The Act applies to all actions filed on or
after January 1, 2008, and was modeled on the 2005 Uniform
Foreign–Country Money
Judgments Recognition Act (2005 Uniform Act). 
(See Manco Contracting Co. (W.L.L.) v.
Bezdikian (2008) 45 Cal.4th 192, 198 (>Manco Contracting); In re Marriage of
Lyustiger (2009) 177 Cal.App.4th 1367, 1369-1370.)  In 2007, the Legislature enacted the Foreign-Country
Judgments Act to replace a prior uniform act.  (See Manco Contracting, supra, at p. 204; Lyustiger, supra, at p. 1370.)

            A
party seeking recognition of a foreign judgment under the Act must file a civil
action, and the procedures applicable to any civil action apply, including the
need to prove disputed factual allegations at a trial.  (Hyundai
Securities Co., Ltd. v. Lee (2013) 215 Cal.App.4th 682, 689-690.)  The fact that a foreign judgment is based on
laws different from, or in conflict with, California law is
not a basis for refusing to enforce the foreign judgment.  (Java
Oil Ltd. v. Sullivan (2008) 168 Cal.App.4th 1178, 1192 (>Java Oil.)  The purpose of the foreign-judgment enforcement
statutes "is to codify the most prevalent common law rules for recognizing
foreign money judgments and thereby encourage the reciprocal recognition of United States judgments in other countries. 
[Citation.]  . . . Drafters of the
uniform act believed codification of uniform rules would satisfy foreign
reciprocity concerns and encourage greater recognition and enforcement of
American judgments abroad.  [Citations.]"  (Manco
Contracting, supra, 45 Cal.4th at
p. 198.) 

            Under
the Foreign-Country Judgments Act, a court "shall recognize a
foreign-country judgment to which this chapter applies."  (§ 1716, subd. (a).)  Section 1715 provides that the chapter applies
to all foreign money judgments that are "final, conclusive, and
enforceable," except for three categories of excluded judgments.  (§ 1715, subds. (a), (b).)  On these three categories, the Act
states:  "This chapter does not
apply to a foreign-country judgment . . . to the extent that the judgment is
any of the following:  [¶] (1) A judgment
for taxes.  [¶] (2) A fine or other
penalty.  [¶] (3) [A judgment pertaining
to divorce, support, or maintenance]." 
(§ 1715, subd. (b).)

            A
party seeking to enforce a foreign judgment has the burden to show the chapter
applies to the judgment, including that the judgment does not fall within the
excluded categories.  (§ 1715, subd.
(c).)  Once that burden is met, the presumption
in favor of enforcement applies, and the burden shifts to the opposing party to
show a mandatory or discretionary ground for nonrecognition under section 1716.  (§ 1716, subd. (d).)  These nonrecognition grounds include that the
judgment was not rendered before an impartial tribunal, the foreign tribunal
had no personal or subject matter jurisdiction, the judgment was obtained by
fraud, and the judgment is "repugnant" to a state or federal public
policy.  (§ 1716, subds. (b), (c).) 

            The
only issue before us is whether the Mexican judgment is an excluded judgment
because it is a "fine or other penalty."  (§ 1715, subd. (b)(2).)  A California Court
of Appeal recently provided guidance on the meaning of a "penalty"
under the foreign judgment enforcement statutes.[4]  (Java
Oil, supra, 168 Cal.App.4th at pp. 1186-1189.)  The Java
Oil court explained that a "penalty" under these statutes has a
particular meaning " 'in the international sense' " and
this meaning was established long ago by the United States Supreme Court in Huntington
v. Attrill (1892) 146 U.S. 657, 673-674 (Huntington).  (>Java Oil, supra, at p. 1187.)  Quoting Huntington,
the Java Oil court stated the
question whether a statute is a " 'penal law . . . so that it cannot
be enforced in the courts of another State, depends upon the question whether
its purpose is to punish an offense against the public justice of the State, or
to afford a private remedy to a person injured by the wrongful act.' "
 (Java
Oil, supra, at p. 1187.)  " 'The test is . . . whether . . . [the
judgment's] essential character and effect . . . [is] a
punishment of an offence against the public, or a grant of a civil right to a
private person.' "  (Ibid.)
 Thus, " ' "[a] statute is penal
. . . [if it] awards a penalty to the state, or to a public officer
in its behalf, or to a member of the public, suing in the interest of the whole
community to redress a public wrong. . . .  The purpose
must be not reparation to one aggrieved, but vindication of the public justice." ' "  (Ibid.)> 

            The >Java Oil court noted that the >Huntington> test has been followed by the California Supreme Court (Miller v.
Municipal Court (1943) 22 Cal.2d 818, 837)[5], and that "treble damages, double damages, and minimum fines [have been] considered
penalties" in California.  (Java Oil, >supra, 168 Cal.App.4th at pp. 1187-1188.)  The Java
Oil court additionally discussed the Restatement definition and found it
similar to the Huntington definition.  (Java
Oil, supra, at p. 1188; see Rest.3d
Foreign Relations Law of the U.S., § 483, com. b, p. 611.)  Applying these definitions, the >Java Oil court held that attorney fee
awards in two Gibraltar money judgments were not penalties under the foreign judgment
enforcement statutes.  (>Java Oil, supra, 168 Cal.App.4th at pp.
1188-1189.) 

            >Java Oil's analysis is consistent with
the understanding of the drafters of the 2005 Uniform Act, which was adopted in
full by the California Legislature.  In
their comments to this model uniform act, the drafters stated:  "Courts generally hold that the test for
whether a judgment is a fine or penalty is determined by whether its purpose is
remedial in nature, with its benefits accruing to private individuals, or it is
penal in nature, punishing an offense against public justice."  (Official Comments on U. Foreign-Country
Money Judgments Recognition Act (2005 ed.) foll. § 3, p. 7, com. 4.)[6] 

            Accordingly,
the issue whether a monetary award is a penalty within the meaning of the
Foreign-Country Judgments Act requires a court to focus on the legislative
purpose of the law underlying the foreign judgment.  A judgment is a penalty even if it awards
monetary damages to a private individual if the judgment seeks to redress a
public wrong and vindicate the public justice, as opposed to affording a
private remedy to a person injured by the wrongful act. 

III.  Analysis

            Applying
the forgoing legal principles, we agree with the trial court that the portion
of the judgment that requires Darbun to pay each worker's daily wages from the
date of their improper termination until
Darbun pays the judgment is a "penalty" under section 1715,
subdivision (b)(2).  Although these
amounts are to be paid to the workers, rather than the state, these amounts
cannot be reasonably interpreted to be remedial under any sense of the word,
i.e., intended as compensation to the workers for lost wages or other
employment benefits.  Instead, this award
seeks to vindicate the public justice and constitutes a punishment (a fine or penalty)
for Darbun's failure to comply with the Labor Relations Board mandates.  The portion of the judgment in which Darbun
must continue to pay plaintiffs' salaries, infinitely accruing at a daily rate,
can only be reasonably interpreted as a fine or penalty for nonpayment of the
amounts ordered.  (See Lab. Code,
§ 203 ["penalty" imposed for willful failure to pay wages].)

            We
reject plaintiffs' argument that this portion of the judgment is not a penalty
because "lost future wages" can be a component of compensatory
economic damages under California law.  (See >Helmer v. Bingham >Toyota> Isuzu (2005) 129 Cal.App.4th 1121, 1129-1131.)  In Helmer,
the court held an employee was
entitled to recover future lost
income damages on a promissory fraud claim because these damages "may
properly be considered as part of the 'benefit of the bargain.' "  (Id.
at p. 1130.)  The court explained that
the defendant "employer 'bargained' to obtain an employee who already had
steady employment with another company. 
It is only fair to compensate the employee for the damages he suffered
as a result of leaving that steady employment."  (Id.
at pp. 1130-1131.) 

            Even
assuming we look to California law on this issue, Helmer is
inapposite.  Darbun was ordered to pay
the daily wages of the workers until it fully satisfied the Mexican judgment without
any reference or proof of each worker's individual situation or future losses.  This monetary award was ordered under Mexican
law that permits the imposition of these monetary amounts until a judgment is
satisfied regardless of the employee's situation.  Thus, in this case, there is no basis for finding
the monetary award was to compensate plaintiffs for "lost future wages"
or as part of the "benefit of the bargain."  Unlike Helmer,
there were no facts showing a relationship between this monetary award and plaintiffs'
losses to indicate the amounts were intended as a private remedy. 

            However,
we agree with plaintiffs that they have alleged sufficient facts showing at
least a portion of the judgment was intended to be compensation for lost wages
and benefits, rather than a penalty to vindicate " 'the public
justice.' "  (>Java Oil, supra, 168 Cal.App.4th at p. 1187.)  The complaint's allegations, together with the
attached Mexican judgment, support that Darbun was ordered to pay various amounts
to compensate plaintiffs for its responsibility in causing the "rescission"
of the employment "relationship," including vacation pay, holiday
pay, and vacation and seniority bonuses.  Some of these awarded amounts were calculated
based on each plaintiff's seniority and some were awarded based on the
provisions of the plaintiffs' employment contracts.  These alleged facts support that the amounts
awarded were intended to compensate plaintiffs for damages suffered, rather
than as a penalty unrelated to compensation and for the purpose of punishment.  Although it appears that the plaintiffs suffered
unpaid monetary wages for only a very brief period, the Mexican judgment does
not necessarily support that these were the only benefits allegedly lost as a
result of Darbun's claimed wrongful conduct. 
(See Boothby v. Atlas Mechanical,
Inc. (1992) 6 Cal.App.4th 1595, 1600-1601 [vested vacation time is a form
of wage]; Grant-Burton v. Covenant Care,
Inc. (2002) 99 Cal.App.4th 1361, 1376 [bonuses earned by an employee may constitute
wages].)

            Darbun
argues that even assuming a portion of the Mexican judgment constitutes
compensation rather than a penalty, a California court
may not enforce a foreign judgment if any part of the judgment is a
penalty.  This argument is unsupported.

            Section
1715, subdivision (b)(2) provides:  "This
chapter does not apply to a foreign-country judgment, even if the judgment
grants or denies recovery of a sum of money, to the extent that the judgment is any of the following:  [¶] . . . [¶] . . . 
A fine or other penalty."  (Italics
added.)  The phrase "to the extent"
plainly suggests that the bar on enforcing judgments applies only to the
portion of the judgment constituting a prohibited category.  Darbun contends this interpretation would be appropriate
solely if the drafters had used the phrase "only to the extent that.">  This
argument is unsound. 

            The
word "extent" refers to "the range over which something extends"
(Webster's 11th Collegiate Dict. (2006) p. 443),
and the phrase "to the extent" has a similar limiting connotation,
i.e., applying only to the particular identified subject matter.  (See In
re Sprint Corp. ERISA Litigation (D.Kan. 2004) 388 F.Supp.2d 1207,
1218-1219; In re Duvall (Bankr.
W.D.Tx. 2002) 218 B.R. 1008, 1016.)  Thus,
contrary to Darbun's contention, it is unnecessary to add the word "only"
to convey an intent to provide a limited application.  Under its plain meaning, the phrase "to
the extent" in section 1715, subdivision (b) refers to the limited scope of
the statutory exceptions, and establishes that a foreign judgment can be
partially enforced with respect to compensatory damages that do not constitute
a penalty or fine.

            The
drafters' comments to the 2005 Uniform Act support this interpretation.  In the comments following the exception
categories (such as the fine/penalty exception), the drafters stated:  "[A] foreign-country money judgment is
not within the scope of this Act 'to the
extent' that it comes within one of the excluded categories.  Therefore, if a foreign-country money judgment
is only partially within one of the excluded categories, the non-excluded portion will be subject to this Act."  (Official Comments on U. Foreign-Country
Money Judgments Recognition Act, supra,
foll. § 3, p. 7, com. 5, italics added.) 
Because the California Legislature adopted the same "to the extent"
language without modification and because a primary purpose of adopting the 2005
Uniform Act was to ensure and promote uniformity of the foreign judgment
enforcement law "among states that enact it," we necessarily presume
the California Legislature had the same intent. 
(§ 1722.) 

            This
conclusion also comports with common sense. 
Assume two judgments each award the same amount of compensatory damages
but one additionally awards a penalty.  Under
Darbun's proposed interpretation, the compensatory-only judgment could be fully
enforced whereas the judgment awarding the same compensatory damages >and a separate penalty could not be enforced.  In this scenario, a plaintiff would not be
entitled to enforce a judgment merely by virtue of having established more
egregious behavior that warranted a penalty in
addition to compensatory damages.  We
cannot conclude the California Legislature would have intended this
result. 

            Darbun
contends a court cannot partially enforce a foreign country judgment because a
court's authority under the Act is limited to issuing a single order enforcing
the judgment or not enforcing the judgment. 
In support, Darbun cites section 1719 which provides that if a
foreign-country judgment is entitled to recognition, it is generally "[e]nforceable
in the same manner and to the same extent as a judgment rendered in this state."  In light of the more direct language
contained in section 1715, subdivision (b) and the explicit legislative history
disclosing the drafters' intent to permit partial enforcement, we find Darbun's
reliance on section 1719 to be unpersuasive. 


IV.  Federal Court Proceedings

            Because
both parties discuss the earlier federal court litigation, and attempt to use
various federal court rulings to their advantage, we briefly summarize this
litigation and then explain our conclusion that the federal court rulings—while
informative—are not binding on this court. 


            Plaintiffs
initially filed their enforcement action against Darbun in federal court based
on diversity jurisdiction arising from plaintiffs' Mexican nationalities.  (Plata
v. Darbun Enterprises, Inc. (S.D.Cal. 2009) 2009 WL 975233.)  Darbun then moved to dismiss the complaint on
various grounds, including that the judgment was an unenforceable "penalty"
under California's Foreign-Country Judgments Act.  (Plata,
supra, 2009 WL 975233.)  The district
court rejected the claim at the pleadings stage.  (Ibid.)  The district court held:  "In order to prevail at this stage of
the proceedings, Defendant must demonstrate based upon the pleadings and
matters properly before the Court that every part of the Mexican Judgment
constitutes a 'penalty' which is unenforceable under [section] 1715(b)(2).  At this stage of the proceedings, the Court
finds there are factual questions regarding the nature of the Judgment which
precludes dismissal of the case . . . ."  (Ibid.) 

            Several
months later, the federal court denied plaintiffs' motion to attach Darbun's
corporate property, finding plaintiffs did not submit sufficient facts
establishing " 'the probable validity' " of their
claim.  (Plata v. Darbun Enterprises, Inc. (S.D.Cal. 2009) 2009 WL 3153747,
p. *4; see § 484.090.)  In so
ruling, the court stated:  "Given
the lack of information regarding the nature of the Mexican Judgment, the court
cannot determine as a matter of law whether the damages constitute a
penalty.  Crucially, it is unclear
whether the Judgment served to punish Defendant or to compensate Plaintiff for
harm incurred."  (>Ibid.) 
However, the court additionally discussed that various portions of the
judgment appear to award a penalty rather than compensation for lost wages,
particularly the portion of the judgment ordering that Darbun pay plaintiffs'
salaries until it fully satisfies the entire judgment.  (Ibid.) 

            Subsequently,
the federal district court dismissed the federal action after learning that one
of the 18 plaintiffs was a California resident and her presence in the action "destroyed
diversity for jurisdictional purposes."  (Plata
v. Darbun Enterprises, Inc. (S.D.Cal. 2011) 2011 WL 98405, p. *1.)  The court also rejected plaintiffs' later
attempt to refile the action without including all necessary parties.  (Ibid.)


            Both parties
rely on the collateral estoppel doctrine to argue for a preclusive effect as to
certain of these rulings.  This doctrine
is inapplicable on the record before us. 
The court never reached a final ruling on the merits, and the issues in
the federal litigation were not identical to the issues in this case.  These missing elements preclude the
application of collateral estoppel in this case.  (See Lucido
v. Superior Court (1990) 51 Cal.3d 335, 341; Henderson v. Newport-Mesa
Unified School Dist. (2013) 214 Cal.App.4th 478, 503.)

DISPOSITION

            Judgment reversed.  The parties to bear their own costs on
appeal.

 

 

 

HALLER, J.

 

WE CONCUR:

 

 

 

NARES, Acting P. J.

 

 

 

O'ROURKE, J.