Filed 2/27/13 Elder v. Schwan Food CA2/3 

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS 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 This opinion has not been certified for publication 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 

SECOND APPELLATE DISTRICT 

DIVISION THREE 

FRED ELDER, 

 Plaintiff and Respondent, 

 v. 

THE SCHWAN FOOD COMPANY et al., 

 Defendants and Appellants. 

 B238876 

 (Los Angeles County 

 Super. Ct. No. BC390535) 

 APPEAL from a judgment of the Superior Court of Los Angeles County, 

John P. Shook and Steven J. Kleifield, Judges. Affirmed. 

Kutak Rock, Stephanie A. Hingle, Michael S. Kim and Alan L. Rupe for 

Defendants and Appellants. 

 Righetti Glugoski, Matthew Righetti, John Glugoski and Mike Righetti for 

Plaintiff and Respondent. 

_________________________
2 

 In Elder v. The Schwan Food Company (May 12, 2011, B223911) [nonpub. opn.]) 

(Elder I), the jury concluded by special verdict that plaintiff Fred Elder was misclassified 

as an exempt employee and worked nine hours a day, and 45 hours per week. Elder was 

awarded $9,944.42, in unpaid overtime wages, which was limited to the three-year period 

preceding the filing of his complaint. The trial court did not award restitution for a 

violation of California’s unfair competition law (UCL) (Bus. & Prof. Code, § 17200 

et seq.)1

 and denied Elder’s request for civil penalties under The Labor Code Private 

Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2698 et seq.). (Elder I, at [pp. 3-

4].) We remanded the matter to the trial court to reconsider awarding restitution under 

the UCL because the court could not disregard the jury verdict that the Schwan Food 

Company (Schwan) violated the Labor Code.2 (Id. at [pp. 5 -7].) We also concluded in 

Elder I that the trial court had discretion to reduce the maximum amount of civil penalties 

awarded under PAGA, but it had no discretion to outright deny civil penalties. (Id. at 

[pp. 9-12]. ) 

Following remand, the trial court awarded Elder a fourth year of unpaid overtime 

wages as restitution under the UCL and also awarded civil penalties. Schwan appeals, 

contending reversal is mandated because the company was deprived of its right to request 

and obtain a statement of decision as the trial court never announced a tentative decision 

before ruling on the matter. Schwan also contends the trial court disregarded the 

company’s equitable defense under the erroneous belief that it was bound by the law of 

the case doctrine to accept the procedural recitation in Elder I, in which we stated that the 

jury had rejected the company’s defense to the overtime claim that Elder was properly 

classified as an exempt employee. We affirm. 

 

1 Business and Professions Code section 17208 provides that “[a]ny action to 

enforce any cause of action pursuant to this chapter shall be commenced within four 

years after the cause of action accrued.” 

2 A business act or practice that violates the Labor Code through failure to pay 

wages is an unfair business practice. (Cortez v. Purolator Air Filtration Products Co. 

(2000) 23 Cal.4th 163, 178-179.) 
3 

FACTUAL AND PROCEDURAL BACKGROUND 

1. Schwan Misclassified Elder as an Exempt Employee 

In Elder I, the jury made findings by special verdict that Elder was not exempt 

from overtime wages under the outside salesperson exemption to the overtime laws, 

despite testimony from Schwan representatives that they believed Elder was exempt.3

 An 

outside salesperson is defined as any person “who customarily and regularly works more 

than half the working time away from the employer’s place of business selling tangible or 

intangible items or obtaining orders or contracts for products, services or use of 

facilities.” (Cal. Code Regs., tit. 8, § 11070, subd. (2)(J).) 

a. Elder’s Job Duties

Elder was a customer sales representative for Schwan, supplying frozen Red 

Baron pizzas to local grocery stores. He testified regarding his job duties: “We presold 

orders within the 48-hour period. So you would go into a store and you would write an 

order and then transmit it – But when you first went into the grocery store, you would 

work the product. You didn’t know if you needed a case of pizza or not on the shelf. So 

you work it, push it back. And if you needed it, you would go into the back room. If you 

had that item, you would bring it back in and merchandise it on the shelf. [¶] And then 

when everything was done, you could write an accurate order and then communicate that 

to the freezer person what you were bringing in in [sic] two days, whenever the truck was 

going to come. [¶] If we had sales promotions, if we were going to be on the display 

planner, so there was a planner set forth by the company. So, for instance, March food 

madness would be potentially the first week in March. We may have Red Baron on sale 

at Albertsons. So we would have a planner set up where we should have door number 1 

or door number 2 for our space. So we would bring in the product and fill the shelf and 

for that space.” 

 

3 Labor Code section 1171 expressly excludes “any individual employed as an 

outside salesman” from the overtime laws. (Lab. Code, § 1171; Ramirez v. Yosemite 

Water Co. (1999) 20 Cal.4th 785, 789.) 
4 

Schwan also employed “merchandisers,” whose job duties were to put the product 

on the shelf. Elder testified that he had merchandiser support, depending upon his 

assigned route. 

Schwan’s regional sales manager, Daniel Rowell, testified that he did not believe 

“merchandising product per se” is a sales task. He explained: “[W]hile you are 

merchandising product, you can perform sales tasks. [¶] You talk to the frozen food 

person while you are putting up product. You look to the left and to the right to see if 

there is opportunity to gain an incremental facing. So there is opportunity even while 

merchandising. [¶] Rotating product, certainly that would not be a sales task. [¶] 

Managing damaged product wouldn’t be a sales task.” 

As Rowell further explained, stocking shelves could involve making a sales 

presentation. “You are presenting a billboard effect. You’re merchandising so that when 

you are done, you step back and you look at it and there are six Red Baron faceup, and it 

looks like a billboard to the consumer as they walk by. So that is what I mean.” 

Rowell believed that based upon Elder’s job description, Elder spent the majority 

of his time engaged in sales. Rowell also testified that he met with an attorney to ensure 

that Elder and similarly situated California employees were properly classified as exempt 

employees. 

b. Jury Rejects Outside Salesperson Exemption 

By special verdict, the jury answered “no” to the following three questions: 

“1. Did Plaintiff Elder spend more than 50% of his time engaged in outside sales? 

“2. If you find Plaintiff Elder did not spend more than 50% of his time engaged in 

outside sales, do you find that Plaintiff Elder was involved principally in the sale of a 

product or service? 

“3. Was more than 50% of Plaintiff Elder’s compensation comprised of 

commission wages?” 

The jury also made a finding that Elder worked nine hours a day and 45 hours per 

week. Based upon these findings, the trial court calculated the amount of overtime pay 
5 

owed to Elder on his legal claims. Elder received $9,944.42 in overtime pay, plus 

prejudgment interest in the amount of $3,286.60, and post-judgment interest. 

Schwan persuaded the trial court that Elder was not entitled to restitution or civil 

penalties. Elder appealed. 

2. Elder I 

In Elder I, we remanded the matter to the trial court to reconsider the equitable 

remedy under the UCL, and to determine the appropriate civil penalties under PAGA. 

We concluded the trial court was bound by the jury’s findings that Elder had been 

misclassified as an exempt employee in violation of California’s overtime laws, and 

Elder had established that he had worked overtime for which he had not received 

overtime wages. (Elder I, supra, B223911, at [p. 5].) We quoted Cortez v. Puralator Air 

Filtration Products Co., supra, 23 Cal.4th at page 181, where the Supreme Court stated, 

“ ‘while we cannot foresee how any equitable consideration could defeat a claim for 

unpaid wages, we cannot foreclose the possibility that defendant has evidence that the 

trial court might consider relevant when, on remand, it fashions a remedy for plaintiff’s 

unfair business practice.’ ” (Elder I, at [p. 6].) 

We also concluded the trial court did not have discretion to forgo imposing any 

civil penalties under PAGA, but the court could exercise its discretion to impose less than 

the maximum amount. (Elder I, supra, B223911, at [pp. 9-12].) 

Although Schwan did not raise the issue in a petition for rehearing, the company 

points out what it perceives as procedural error in Elder I, that is, our statement that the 

jury considered and rejected the company’s equitable defense by finding that Elder was 

nonexempt. (Elder I, supra, B223911, at [p. 7].) Schwan relied on evidence presented to 

the jury to persuade the court not to award restitution under the UCL. Nevertheless, our 

decision in Elder I specifically directed the trial court to reconsider the company’s 

evidence and to balance the equities when fashioning a remedy for Schwan’s violation of 

the UCL. There is no indication in the record that the trial court did not follow this 

directive. 
6 

3. Remand Following Elder I

On remand, Schwan again asked the trial court not to award restitution for a fourth 

year of overtime compensation. Relying on the evidence presented to the jury, Schwan 

contended it had a good faith belief that Elder was exempt from overtime. Schwan also 

presented argument that while it would be unjust to retain a benefit (overtime wages) 

rightfully belonging to Elder, this case presented a number of unique circumstances that 

required the court to balance the equities in the company’s favor. First, Schwan argued 

that it “has for years attempted to give Plaintiff his benefit back,” but Elder opted out of a 

class action in which Schwan paid employees more than five hours per week in unpaid 

overtime compensation. Second, Elder pursued numerous claims against Schwan, and 

the jury rejected most of them, including Elder’s claim that he was entitled to 15 hours of 

unpaid overtime wages per week. Third, only Elder’s counsel would benefit because “the 

fourth year of overtime compensation” would exceed the offer to compromise made 

pursuant to Code of Civil Procedure section 998,4

 entitling Elder’s attorneys to hundreds 

of thousands of dollars in attorney fees. Fourth, Elder never asked for overtime wages 

while employed by Schwan and waited nearly five years to put the company on notice 

that he should have been paid overtime. 

In sum, Schwan argued that “[b]ut for Plaintiff’s delay in asserting his rights to 

overtime and his unreasonable expectations about the value of his claim which caused 

him to opt out of Wastier [class action lawsuit], this matter never would have lingered in 

Court for over three years. Plaintiff is not entitled to a fourth year of overtime wages, 

particularly to the extent the pre-judgment interest on those wages bolster Plaintiff’s 

claim to exceed Schwan’s offer to compromise.” 

While presenting argument to the trial court, Schwan’s counsel argued that in 

Elder I we held the court erred because it could not award “nothing for that year,” and the 

Court of Appeal “remanded it to you to determine what amount should be entered.” 

Continuing, counsel read into our opinion in Elder I that “if the Court of Appeals [sic] 

 

4 Undesignated statutory references are to the Code of Civil Procedure. 
7 

had wanted a full year, they would have entered judgment for that year. Instead, they 

returned it to you to balance the equities.”5

 

With respect to the civil penalties, Elder sought the maximum amount. Schwan 

countered that the company’s good faith designation of Elder as an exempt employee was 

not a serious transgression of the Labor Code. 

4. Ruling, Judgment, and Appeal 

On October 24, 2011, after taking the matter under submission, the trial court 

issued a ruling on the submitted matter, which was entered in the court’s minutes and 

mailed to the parties (October order). The trial court awarded Elder an additional 

$3,878.62 as restitution for the UCL violation, bringing the total awarded for unpaid 

overtime wages to $13,823.04. The court also awarded $2,500 in civil penalties. The 

October order stated: “Plaintiff to file and serve a proposed judgment.” 

On December 6, 2011, the trial court signed the judgment that incorporated the 

language from the October order. Schwan timely appealed. 

On appeal, Schwan contends the judgment must be reversed because the trial court 

(1) deprived the company of its right to request a statement of decision by not issuing a 

tentative decision, (2) improperly relied on the law of the case doctrine by accepting as 

true an erroneous recitation of the procedural history in Elder I, and (3) abused its 

discretion by awarding restitution and civil penalties and ignoring the “abundance of 

evidence,” showing the company’s good faith belief that Elder was an exempt employee. 

We discuss each contention in turn. 

 

5 At the conclusion of the argument, the trial court stated: “Well, I think one point 

of probable agreement between the parties is that the appellate opinion is the law of the 

case.” In ruling on the submitted matter, the trial court did not refer to the law of the case 

doctrine. Schwan may not use the trial court’s ambiguous and contemporaneous remarks, 

whether oral or written, to impeach its final judgment. (9 Witkin, Cal. Procedure (5th ed. 

2008) Appeal, § 350, pp. 402-403, citing Patarak v. Williams (2001) 91 Cal.App.4th 826, 

830.) 
8 

DISCUSSION 

1. The Failure to Prepare a Statement of Decision Is Not Reversible Error 

Schwan contends it was deprived of its right to a statement of decision because the 

trial court did not issue a tentative decision that triggered the company’s statutory 

obligation to request a statement of decision. (§ 632.) Section 632 states: “In superior 

courts, upon the trial of a question of fact by the court, written findings of fact and 

conclusions of law shall not be required. The court shall issue a statement of decision 

explaining the factual and legal basis for its decision as to each of the principal 

controverted issues at trial upon the request of any party appearing at trial.” When a 

party “requests a statement of decision, it must be prepared, and the failure to do so is 

reversible error. [Citations.]” (Whittington v. McKinney (1991) 234 Cal.App.3d 123, 

127.) 

Section 632 must be read in conjunction with California Rules of Court, 

rule 3.1590, which governs the procedure for issuance of a statement of decision. “On 

the trial of a question of fact by the court, the court must announce its tentative decision 

by an oral statement, entered in the minutes, or by a written statement filed with the 

clerk.” (Cal. Rules of Court, rule 3.1590(a).) The rules require that the trial court 

announce an intended decision rather than making a final order or judgment to give a 

party an opportunity to request a statement of decision to address the principal 

controverted issues. (Id., (d).) 

Assuming the trial court’s resolution of whether to award restitution for a violation 

of the UCL constituted “disputed issues of fact,” the trial court had to issue a tentative 

decision. (Cal. Rules of Court, rule 3.1590(a).) The October order filed with the court 

clerk satisfies the requirements in the rules, and Schwan should have requested a 

statement of decision within the statutory time frame. Contrary to Schwan’s contention, 

rule 3.1590(a) of the California Rules of Court does not require that the court label its 

written order a “tentative decision,” or require that the tentative decision contain the 

provisions set forth in California Rules of Court, rule 3.1590(c). These provisions are not 
9 

mandatory.6 (Cal. Rules of Court, rule 3.1590(c).) Moreover, neither rule 3.1590 of the 

California Rules of Court nor section 632 require that a party must wait until the trial 

court announces its tentative decision to request a statement of decision. 

Citing Sweat v. Hollister (1995) 37 Cal.App.4th 603, 614, disapproved on other 

grounds in Santisas v. Goodin (1998) 17 Cal.4th 599, 609, footnote 5, Schwan contends 

that the phraseology of the October order, including the use of the present tense instead of 

the conditional tense, indicates the trial court’s order was determinative and final. Sweat 

v. Hollister is inapposite. 

In Sweat v. Hollister, the plaintiffs challenged the trial court’s order awarding 

attorney fees to the prevailing defendants because the plaintiffs dismissed the action after 

the court issued a telephonic ruling granting summary judgment but before oral 

argument. (Sweat v. Hollister, supra, 37 Cal.App.4th at pp. 610-612.) The question of 

whether the defendants were entitled to attorney fees turned on determining if the 

telephonic ruling was final when the plaintiffs filed their dismissal. (Id. at p. 613.) 

Reviewing the order, the appellate court determined the phraseology of the ruling as set 

forth in the minute order was final and nothing in that order contemplated the preparation 

of a subsequent judgment. The Sweat court also noted that the trial court was “familiar 

with the difference between tentative and final decisions,” “its telephonic order was 

intended to be final,” and oral argument “was simply to stay the imposition of the order 

pending oral argument.” (Id. at p. 614.) Thus, the cancellation of the oral argument by 

virtue of the dismissal, vacated the stay, not the trial court’s decision. (Ibid.) 

Unlike the telephonic order in Sweat v. Hollister, supra, 37 Cal.App.4th 603, the 

October order was not a final judgment. The October order indicated which party should 

 

6 California Rules of Court, rule 3.1590(c) states: “The court in its tentative 

decision may: [¶] (1) State that it is the court’s proposed statement of decision, subject to 

a party’s objection under (g); [¶] (2) Indicate that the court will prepare a statement of 

decision; [¶] (3) Order a party to prepare a statement of decision; or [¶] (4) Direct that 

the tentative decision will become the statement of decision unless, within 10 days after 

announcement or service of the tentative decision, a party specifies those principal 

controverted issues as to which the party is requesting a statement of decision or makes 

proposals not included in the tentative decision.” 
10 

prevail, setting out the court’s opinion about how the judgment eventually should be 

entered, and requested that Elder prepare a proposed judgment. Until judgment was 

entered, the October order was not binding on the court. (Cal. Rules of Court, rule 

3.1590(b) [“The tentative decision does not constitute a judgment and is not binding on 

the court.”].) 

While Schwan maintains the October order was not a tentative decision, the 

company failed to bring to the trial court’s attention that under rule 3.1590(a) of the 

California Rules of Court, the court had to announce its tentative decision. If Schwan did 

not consider the October order a tentative decision, it could have asked the trial court to 

cure what it now perceives as a reversible procedural error before the court signed the 

judgment. Schwan made no attempt to do so after receiving the October order or during 

the six-week period before the court signed the judgment. Schwan also made no request 

for a statement of decision at any time during the trial court proceedings and raised this 

issue for the first time on appeal. Under these circumstances, there is no reversible error. 

2. The Trial Court Did Not Erroneously Apply the Law of the Case Doctrine 

Schwan contends the trial court erred because the decision to award restitution is 

based upon the erroneous belief that our procedural recitation in Elder I was “law of the 

case.” Thus, according to Schwan, the trial court did not consider the company’s 

equitable defense or balance the equities before awarding Elder restitution for the 

company’s UCL violation. The record and law does not support this argument. 

Law of the case only applies to questions of law not the procedural history of a 

case. “ ‘The law of the case doctrine states that when, in deciding an appeal, an appellate 

court “states in its opinion a principle or rule of law necessary to the decision, that 

principle or rule becomes the law of the case and must be adhered to throughout its 

subsequent progress, both in the lower court and upon subsequent appeal.” ’ ” 

(ABF Capital Corp. v. Grove Properties Co. (2005) 126 Cal.App.4th 204, 212.) 

In Elder I, we remanded and directed the trial court to balance the equities before 

deciding a remedy for the company’s UCL violation. As Schwan’s counsel argued in the 

trial court following remand, we did not direct the trial court to award a fourth year of 
11 

unpaid overtime wages to Elder, nor did we suggest to the trial court that it should 

disregard any equitable defenses. Because the jury rendered its verdict before the trial 

court considered the UCL claim, we noted in Elder I that the jury rejected the company’s 

defense that Elder was properly classified as an exempt employee. (Elder I, supra, 

B223911, at [p. 7].) Our decision in Elder I, however, was clear that the trial court had to 

balance the equities before awarding an equitable remedy. 

On remand, Schwan’s counsel argued that the balance of equities favored the 

company. Schwan relied on, and cited to, evidence presented during trial, including 

Rowell’s testimony, which the jury rejected. In addition, Schwan presented several 

arguments that it would be unjust to permit Elder to recover a fourth year of unpaid 

overtime wages. 

The record indicates that the trial court considered the briefs (which included 

citation to the evidence presented at trial) and Schwan’s arguments. There is no 

indication that the trial court disregarded our directions in Elder I. During oral argument, 

the trial court read the following from Elder I: “We remand for the trial court to 

reconsider the remedy and balance the equities. . . . [¶] In doing so, the trial court must 

not overlook the jury’s verdict. The strong public policy directed at the enforcement of 

California’s overtime laws and for purposes of the U.C.L., as between the person 

enriched and the person harmed, it would be unjust for the company to retain the 

benefit.” Schwan has made no affirmative showing of error. 

3. Schwan Has Failed to Meet Its Burden to Demonstrate Prejudicial Error 

Schwan contends that the trial court disregarded its equitable defense, ignoring 

evidence supporting a reduction of both restitution and the civil penalties awarded to 

Elder. Schwan overlooks that the trial court exercised its discretion to reduce the amount 

of civil penalties requested.7

 (Lab. Code, § 2699, subd. (e)(2).) 

 

7

 Schwan’s attempt to distinguish the facts in Amaral v. Cintas Corp. No. 2 (2008) 

163 Cal.App.4th 1157, 1213-1214, is unpersuasive. In making this argument, Schwan 

asks this court to consider the evidence anew. On review, the trial court’s assessment and 

reduction of the requested civil penalties was not an abuse of discretion. Moreover, 
12 

Schwan’s contention is really an argument about the sufficiency of the evidence to 

support its equitable defense, and the insufficiency of the evidence to support the 

judgment. We begin with the presumption that the record contains evidence to support 

the judgment. (Grassilli v. Barr (2006) 142 Cal.App.4th 1260, 1278.) On appeal, we do 

not weigh conflicts and disputes in the evidence. Our review begins and ends with a 

determination as to whether there is any substantial evidence contradicted or not, in 

support of the judgment. (Id. at p. 1277.) 

Other than asking this court to substitute its discretion for that of the trial court, 

Schwan has failed to show the evidence does not support the judgment. There was 

sufficient evidence in the record to award restitution and to assess civil penalties for a 

violation of California’s overtime laws. Thus, there was no prejudicial error. 

 

Schwan has presented no reasoned argument (other than its view that Elder should not 

have independently pursued this claim) or authorities that the civil penalty the trial court 

imposed was unjust, arbitrary and oppressive, or confiscatory. 
13 

DISPOSITION 

 The judgment is affirmed. Elder is entitled to costs on appeal. 

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS 

 ALDRICH, J. 

We concur: 

 KLEIN, P. J. 

 KITCHING, J.