De La Rosa v. Able Acquisition

 

 

 

 

 

 

 

 

 

 

Filed 7/12/13  De La Rosa v. Able Acquisition CA4/3

 

 

 

 

 

 

 

>NOT TO BE PUBLISHED IN OFFICIAL REPORTS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opinion has not been certified for publication or ordered published for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.

 

 

 

 

IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

 

FOURTH
APPELLATE DISTRICT

 

DIVISION
THREE

 

 
>

RAFAEL DE LA ROSA et al.,         Plaintiffs and Appellants,               v.   ABLE ACQUISITION CORP.,         Defendant and Respondent.

G046484            (Super. Ct. No. 07CC01206          consol. with 07CC01256)            O P I N I O N

 

                        Appeal
from an order of the Superior Court
of Orange County,
Nancy Wieben Stock, Judge.  Request for
Judicial Notice.  Order affirmed.  Request denied.

                        Rastegar & Matern,
Matthew J. Matern, Paul J. Weiner, Thomas S. Campbell, Wendy Sha and Joshua N.
Lange for Plaintiffs and Appellants.

                        Simoncini &
Associates, Kenneth D. Simoncini, Kerri A. Johnson and Paul J. McDonald for
Defendant and Respondent.

 

*                      *                      *

                        Plaintiffs
Rafael De La Rosa and Ramy Mandujano filed a class action for violation of wage
and hour claims.  Sixteen days before the
five-year statute within which to bring a case to trial (Code Civ. Proc.,
§ 583.310) was set to run, the trial court granted the motion of defendant
Able Acquisition Corp.,href="#_ftn1"
name="_ftnref1" title="">[1]
to decertify the class because notice to the class had not yet been given.  The court granted the motion on three
grounds:  1) the inadequacy of counsel
for the class; 2) the inability to ascertain class members; and 3) denial of
due process to class members and defendant. 


                        Plaintiffs argue the
court erred because 1) it failed to consider tolling periods that extended the
five-year statute and the impracticability of trying the case, which would
allow for sufficient time to give notice; 2) its decisions counsel was
inadequate and the class was not ascertainable were not supported by the
evidence and were based on improper legal criteria; and 3) its finding of
denial of due process was not supported by the evidence.

                        We conclude
decertification was proper to protect the due process rights of class members
and affirm on that basis.

 

PROCEDURAL HISTORY

 

                        As they are not relevant
to the appeal we do not recite the facts. 
The issues concern only procedural matters. 

                        Two original plaintiffs
filed two actions against defendant and Robert Hugheshref="#_ftn2" name="_ftnref2" title="">[2]
in February and April 2007 by predecessors in interest of the current
plaintiffs.  The cases were consolidated
a year later.  In January 2009 the third
amended complaint was filed substituting in the current plaintiffs after the
original plaintiffs could not be located and/or were disinterested in pursuing
the matter. 

                        In January 2008
plaintiffs served interrogatories and requests for production of documents
seeking, among other things, documents and information about the names of
employees and their addresses and phone numbers, dates and hours worked, and
W-2’s and pay stubs.  After defendant
responded, in April plaintiffs filed motions to compel supplemental responses
to a few requests and interrogatories seeking that information.

                        In the May 2008 hearing,
the court denied the motions without prejudice, finding the parties would not
be able to agree as to the discovery underlying the motion and issued special
orders.  It ordered a “limited stay” of
written discovery that was the subject of the motions so depositions of
defendant’s persons most knowledgeable and the original plaintiffs could be
taken.  The dates of the depositions had
already been scheduled and were to be finished by June 30.  A status conference was set for a week or so
thereafter for a report on the depositions, at which time the court would
consider lifting the written discovery stay. 
As to pending discovery, defendant could respond by producing documents
“with personal identifiers of third parties,” including names and contact information,
redacted.  The written discovery stay
actually lasted for almost a year for completion of the depositions.

                        During the next four
years the parties conducted discovery, resulting in several disputes over the
information defendant had to provide concerning its employees and employees of
Hughes for the years 2003 through 2005, after which plaintiffs bought the
assets. 

                        As set out in a joint
status conference report, plaintiffs originally suggested November 2008 as the
target date for filing the motion to certify. 
This was changed many times over the next several years until the class
was finally certified in July 2011.  The
court defined the class as follows:  “All
persons employed in California by United Building Services (‘UBS’) who worked
as non-exempt . . . employees at any time between and
including February 20, 2003 and [the end of the opt-out period] in the category
of janitor, custodian, waxer, rover, porter, window washer and as assistants to
any of the foregoing.  The term
‘non-exempt employee’ means an employee who is non-exempt according to the
provisions of 8 Cal.Admin.Code § 11020[sic].  Excluded from the class are current and
former officers, directors, District Directors and managers or assistant
managers of UBS, and any person who at any time during the class period is or
was employed in the classification of supervisor or lead, and any immediate
family member of a current or former officer, director, District Director and
manager or assistant manager of UBS, or any person who at any time during the
class period is or was employed in the classification of supervisor or lead.”

                        Notice was never given
to the class.  In December 2011 defendant
filed a motion to decertify on the ground there was “no common unlawful policy
or practice that would render collective treatment of this case
appropriate.”  In January 2012 defendant
also filed a motion to dismiss under the five-year statute.

                        Prior to the hearing on
the motion to dismiss the court issued a tentative ruling, granting it based on
issues not raised in the motion.  At the
hearing the court denied plaintiffs’ request for additional time to brief these
issues. 

                        In granting the motion
to decertify, the court ruled there were “at least three separate, but
inter[]related grounds.”  First, it found
class counsel was inadequate, pointing to the four years it took to obtain
certification, failure to give the class notice, lack of a trial plan, and
failure to associate in experienced or competent class counsel.  The second ground was the inability to
ascertain the class members for the period 2003 to the beginning of 2005 “with
any degree of comfort.”

                        Finally, the court
pointed to denial of due process, to both class members and defendant.  Trial was in 11 days and the five-year
statute was set to run 5 days thereafter. 
Yet no notice had been sent to the class members.  The court pointed out that, despite the
argument by plaintiffs’ counsel that the five-year statute should be tolled for
various periods, they had not sought an order or stipulation to have tolling
confirmed, which is “the better practice.” 
Further, it would likely take months to give notice to the almost 10,000
employees who had been employed for a period of about nine years by two employers
and at different locations, in addition to other complicating factors.  Further, lack of timely notice to the class
violated defendant’s due process rights because class members not notified
would not be bound by the judgment.

                        The court ruled
defendant’s motion to dismiss under the five-year statute moot because it
appeared plaintiffs could timely try the non-class causes of action.  But it stated that if it had not granted the
motion to decertify it would have granted the motion to dismiss.  It cited to Massey v. Bank of America (1976) 56 Cal.App.3d 29, which dismissed
a class action 34 days before the five-year statute would have run because the
remaining time was “grossly inadequate” to give “notice to the large and
geographically scattered class for which plaintiff purports to act and to allow
even a minimally reasonable period for exercise by the class members of their
options.”  (Id. at p. 33.) 

                        Additional details of
the procedural history are set out in the discussion.

 

DISCUSSION

 

>1. 
Introduction and Standard for Decertification

            A class
previously certified may be decertified “‘where it is clear there exist changed
circumstances making continued class action treatment improper.’  [Citation.]” 
(Green v. Obledo (1981) 29
Cal.3d 126, 148; see Fireside Bank v.
Superior Court (2007) 40 Cal.4th 1069, 1081-1082.)  We reverse an order decertifying a class
“‘only for a manifest abuse of discretion.’” 
(Brinker Restaurant Corp. v.
Superior Court (2012) 53 Cal.4th 1004, 1022.)  We will affirm the order so long as the trial
court relied on substantial evidence, proper criteria, and correct legal
assumptions.  (Id. at p. 1050)

2.  Denial of Due Process

                        The court ruled the
class needed to be decertified to protect the rights of class members.  The trial date was “firm” and the five-year
statute ran five days thereafter.  But no
notice had yet been sent to class members. 
The court stated due process requires that class members have sufficient
time to either opt out of the action or secure private counsel.  Plaintiffs challenge the case on which the
court relied, Massey v. Bank of >America
(1976) 56 Cal.App.3d 29, as being disapproved. 
But Massey was disapproved on
another ground, and in any event is not critical to our decision.

                        Phillips Petroleum Co. v. Shutts (1985) 472 U.S.
797 [105 S.Ct. 2965, 86 L.Ed.2d 628] is the principal authority setting out the
rules of due process in class actions. 
In cases seeking primarily monetary relief, in addition to an
opportunity to opt out, due process requires, at a minimum, notice of the
proceedings with an opportunity to be heard and adequate representation by the
plaintiff.  (Id. at pp. 811-812.)  >Phillips applies here because plaintiffs
seek principally money damages.  But due
process was not satisfied because no notice was given and there was no opportunity
to opt out or obtain their own counsel. 

                        Plaintiffs assert the
“trial court largely ignored [their] proposals and
attempts . . . to send notice to all class members within
the class definition.”  But they fail to
develop this conclusory argument, referring us generally only to over half of
the brief, most of which does not deal with this claim, and we decline to parse
out support from these 27 pages. 

                        This is problematic on
at least two grounds.  First, it violates
court rules, which require each issue to be supported by reasoned legal
argument.  (Cal. Rules of Court, rule
8.204(a)(1)(B); Benach v. County of Los
Angeles (2007) 149 Cal.App.4th 836, 852.) 


                        Second, it is unclear to
which attempts and proposals plaintiffs refer. 
In fact, there is contrary evidence that in December 2011 plaintiffs
refused to allow the administrator to mail notice because the class list did
not include employment records for the 2003 to 2005 period. 

                        Plaintiffs did make a
suggestion at a hearing in late January 2012 to have notice sent to employees
of both companies, acknowledging it would likely cause over-inclusiveness, but
proposing to deal with it later.  But
plaintiffs fail to explain why the court erred in not agreeing to this
suggestion. 

                        In the order granting
decertification the court referred to another solution plaintiffs had
suggested, i.e., sending notice during trial. 
But the court found it “problematic” and in violation of class members’
due process rights.  Despite plaintiffs’
contention, we do not see how or even if the court erred in ignoring an
unreasonable suggestion by plaintiffs regarding notice to the class.

                        Attacking from another
angle, plaintiffs contend the five-year statute should have been extended
because there were periods of tolling when it was impracticable to bring the
case to trial.  Code of Civil Procedure
section 583.340, subdivision (c) provides that in calculating the time
within which a case must be brought to trial, any period when it “was
impossible, impracticable, or futile” to do so must be excluded. 

                        This is a decision best
left to the trial court in the exercise of its discretion, after it reviews the
nature of the case and the parties’ conduct. 
(Bruns v. E-Commerce Exchange, Inc.
(2011) 51 Cal.4th 717, 730-731.)  In making
such a ruling, “‘[t]he critical factor . . . is whether the
plaintiff exercised reasonable diligence in prosecuting his or her case.’  [Citations.]” 
(Ibid.)  Reasonable diligence is required “‘at all
stages of the proceedings.’”  (>Ibid.) 
But even if the plaintiff is diligent, that in itself does not
automatically toll the statute.  (>Ibid.) 
In addition, the plaintiff has the burden to show whether there was a
causal connection between the impracticability and “the failure to move the
case to trial” and whether the inability to bring the case to trial was caused
by circumstances beyond the plaintiff’s control.  (Ibid.) 

                        Not every period of time
when the plaintiff is unable to bring the case to trial is automatically
excluded.  (Bruns v. E-Commerce Exchange, Inc., supra, 51 Cal.4th at p. 731.) 
“‘Time consumed by the delay caused by ordinary incidents of
proceedings, like disposition of demurrer, amendment of pleadings, and the
normal time of waiting for a place on the court’s calendar are not within the
contemplation of these exceptions.’ 
[Citation.]”  (>Ibid.) 
There must be “‘“excessive and
unreasonable difficulty or
expense.”’  [Citation.]”  (Ibid.)  Unless the plaintiff proves the trial court
abused is discretion, we affirm its decision. 
(Ibid.)

                        In the opening brief,
plaintiffs’ argument on this issue was limited to a general description of what
they claimed in the trial court, i.e., that there were several “potential”
tolling periods when it was futile or impracticable to proceed toward trial.  Again without much development of the issue
they listed only the times when they had to seek new class representatives,
when there was a stay on written discovery (which plaintiffs erroneously refer
to as a stay on “all discovery”), and when defendant filed a writ petition
challenging the partial certification of the class. 

                        When this same argument
was made in the trial court it was disposed of on several grounds.  First the court cited a minute order from a
combined status and trial setting conference dated October 2011 stating, “Per
counsel, the five-year statute of limitations [sic] to bring this matter to trial will expire on 02/19/2012.”  There was no claim of tolling at that time,
only four months before the time period expired.  The court also observed that counsel had not
sought an order specifying any tolled periods, which is the “better
practice.”  Finally, it is not unusual
for there to be periods of delay in complex cases for a variety of reasons and
there is no case law suggesting these result in “automatic[] toll[ing].”

                        In
the reply brief plaintiffs make an extensive argument on this issue.  They cite to their opposition to the motion
to dismiss pursuant to the five-year statute and set out the time they believe
should have tolled the statute, totaling 556 days.  One period was when the court stayed written
discovery about the class for purposes of completing the depositions of
defendants’ persons most knowledgeable and the original plaintiffs.  This was to extend for about six weeks,
although it ultimately lasted for not quite a year.  Plaintiffs claim defendant delayed in
scheduling depositions and plaintiffs could not engage in other class-related
discovery.  But defendant was not solely
responsible for delay.  For example,
during that time plaintiffs’ counsel could not locate the original plaintiffs
and new plaintiffs had to be substituted in, also causing a delay.  And contrary to plaintiffs’ suggestion, this
is not a basis for tolling but is a normal part of litigating a class
action. 

                        And plaintiffs point to
nothing in the record showing they sought any court intervention to have the
depositions set sooner.  In addition,
there was other discovery they could have conducted.  Further, discovery delays are part of the
everyday slings and arrows of litigation. 
Plaintiffs have not cited any case supporting their argument or shown
how discovery delay made it impracticable to timely bring the case to
trial.  If so, the five-year statute
would likely be tolled in a majority of, at least complex, civil cases.

                        A major procedural issue
in the case was plaintiffs’ attempt to obtain information as to the identity
and related information about the class members.  Plaintiffs claim defendant “defied court
orders to produce a complete, verified” list, setting out the history of their
attempts to obtain it.  This primarily
deals with the dispute over whether defendant had information about the
employees who worked for the company from 2003 to 2005 prior to defendant’s
purchase.  Plaintiffs claim defendant failed
to furnish required information. 

                        But, as defendant points
out, the parties met and conferred for several months to determine how to
provide information spanning more than six years, for two separate companies
that had workplaces in several locations. 
Further some of the information was in the possession of third party
payroll services.  Within four months of
the conclusion of the depositions and lift of the written discovery stay
defendant produced a list with the names of almost 6,500 employees.

                        Further, as late as
January 2012 plaintiffs were still seeking class information for the 2003 to
2005 purported class members, filing another ex parte motion to compel.  The court denied their motion, finding that
defendant had consistently informed plaintiffs of the difficulty it had in
providing information as to the identity of specific employees for the period
before it owned the company.  Except for
a verification, which defendant subsequently provided, defendant had given
plaintiffs the contact information for those parties since 2009 and it had no
further information.  This is sufficient
evidence on which the court could rule there was no tolling based on this
alleged discovery dispute. 

                        Plaintiffs’ contrary
evidence is not relevant.  It is not our
role to reweigh the evidence, redetermine issues of credibility, or resolve
conflicts in the evidence.  (>Reichardt v. Hoffman (1997) 52
Cal.App.4th 754, 766.)  Our review is
limited to whether there is substantial evidence in the record to support the judgment,
which we presume to be correct, and not whether there is evidence to support
the opposite result.  (>Bowers v. Bernards (1984) 150 Cal.App.3d
870, 874.) 

                        Nor did the court err in
failing to consider the not quite two months during which defendant’s petition
for writ of mandate to reverse the order to certify was before us.  Plaintiffs rely on an alleged concession by
defendant that the period would be tolled but defendant’s counsel merely stated
there might be a tolling if the petition was granted and there was a stay.  That could have been correct but the petition
was summarily denied.  And there was no
agreement to toll the statute. 

                        Plaintiffs argue that
had the petition been granted, the notice to the class and associated discovery
would have been moot because the class would not have existed.  But defendant’s petition included, in the
alternative, a request the class be modified to exclude the period prior to the
time it owned the company and also to limit a subclass to employees working for
a shorter period of time.  Had this part
of the petition been granted, the class action would have proceeded.  Thus, there is no basis to toll.

                        Plaintiffs have not
shown the court abused its discretion in refusing to toll the five-year
statute.  Moreover, they have not met
their burden to show the court erred in decertifying the class.

 

DISPOSITION

 

                        The order is affirmed.
The request for judicial notice is denied. 
Defendant is entitled to costs on appeal.

 

 

                                                                                   

                                                                                    THOMPSON,
J.

 

WE CONCUR:

 

 

 

BEDSWORTH, ACTING P. J.

 

 

 

MOORE, J.