Filed 8/31/20 Valadez v. Cal. Commerce Club CA2/8

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

ALFONSO VALADEZ,

Plaintiff and Appellant,

v.

CALIFORNIA COMMERCE

CLUB, INC., 

Defendant and Respondent.

B297672

(Los Angeles County

Super. Ct. No. BC644587)

APPEAL from a judgment of the Superior Court of Los 

Angeles County, Carolyn B. Kuhl, Judge. Reversed and 

remanded with directions.

Moss Bollinger, Ari E. Moss, Dennis F. Moss; Law Offices of 

Sahag Majarian, II and Sahag Majarian, II for Plaintiff and 

Appellant.

Lewis Brisbois Bisgaard & Smith, Jeffrey S. Ranen and

William C. Sung for Defendant and Respondent.

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After the parties briefed the issues in this appeal, the 

California Supreme Court decided Kim v. Reins International 

California, Inc. (2020) 9 Cal.5th 73 (Reins), which compels us to 

reverse the trial court’s grant of summary judgment in favor of 

respondent.

Appellant Valadez is employed by respondent California 

Commerce Club, Inc. (Commerce). He filed a class action against 

Commerce alleging various individual wage and hour violations 

under the Labor Code as well as a claim for civil penalties 

pursuant to the Labor Code Private Attorneys General Act of 

2004 (PAGA). (Lab. Code, § 2698 et seq.) The trial court 

compelled arbitration of the non-PAGA causes of action and 

stayed prosecution of the PAGA cause of action. Eventually at 

arbitration, Valadez and Commerce settled only his individual 

non-PAGA claims. When the parties returned to court, 

Commerce filed a motion for summary judgment, alleging that 

because Valadez had settled his individual non-PAGA claims, he 

now lacked standing as an “aggrieved employee” to represent the

class on the pending PAGA claim. In its precisely worded 

decision, the trial court agreed Valadez lacked standing due to 

the settlement of his individual claims and entered summary 

judgment in favor of Commerce and against Valadez on that 

ground alone.

The main issue posed by the parties on appeal is whether 

employees lose standing to pursue a claim under PAGA if they 

settle and dismiss their individual claims for Labor Code 

violations. In their briefing, the parties agree this case presents 

facts identical to those in Reins, where plaintiff employee brought 

individual Labor Code causes of action, which were sent to and 

settled in arbitration. There, plaintiff’s class action PAGA claim 
3

was later dismissed by the trial court because he was no longer 

an “ ‘aggrieved employee’ ” with PAGA standing. (Reins, supra,

9 Cal.5th at pp. 82–83.)

In Reins, the Supreme Court reversed the grant of 

summary judgment in favor of the employer, finding that plaintiff 

had standing to pursue the PAGA claim, notwithstanding the 

settlement of his individual Labor Code violations. As the Court 

concluded, “Settlement of individual claims does not strip an 

aggrieved employee of standing, as the state’s authorized 

representative, to pursue PAGA remedies.” (Reins, supra,

9 Cal.5th at p. 80.) This holding rejects the trial court’s basis for 

granting summary judgment here and compels us to reverse the 

judgment in favor of Commerce.

We also reject two other issues Commerce raises in its 

attempt to preserve the judgment in its favor. First, Commerce 

argues that the claim preclusion doctrine, formerly called res 

judicata, prohibits a second suit between the same parties on the 

same cause of action. Commerce argues that the factual bases of 

the PAGA and non-PAGA claims are identical, so settlement of 

the non-PAGA claims precludes going forward with the PAGA 

claim. This theory was also roundly and expressly rejected in 

Reins, where, as here, plaintiff had specifically carved out the 

PAGA claim from the settlement. (Reins, supra, 9 Cal.5th at 

pp. 91–92 [“Where a settlement agreement expressly excludes

certain claims, the resulting dismissal does not preclude further

litigation on the excluded claim.”].) Commerce’s argument here 

on appeal is especially dubious because in the trial court 

Commerce expressly denied that the settlement itself implicated 

the PAGA claim. As the trial court pointed out in its findings, 

“[D]efense counsel confirmed at oral argument, Defendant does 
4

not contend that Plaintiff compromised any PAGA claims that 

might exist. Rather, Defendant’s argument is that Plaintiff can 

no longer pursue any PAGA claims because he is not an 

aggrieved employee, having compromised all of his individual 

claims.”

We also reject Commerce’s argument that the trial court 

granted summary judgment on the ground that maintenance of 

the action would undermine California’s one judgment rule. We 

see no such finding or conclusion in the trial court’s four-page 

decision.

Finally, we leave to the trial court on remand any

overlapping factual and legal issues prompted by other related 

class actions against Commerce brought by different plaintiffs for 

same or similar alleged violations. The trial court has yet to 

address those issues and it is premature for this court to do so

now.
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DISPOSITION

The judgment is reversed and the matter remanded to the 

trial court for further proceedings consistent with this opinion. 

Costs awarded to appellant Alfonso Valadez.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

STRATTON, J.

We concur:

BIGELOW, P.J. 

GRIMES, J.