Court Opinion

ID: 4561645
Source: CourtListenerOpinion
Date Created: 2020-08-31 20:02:32.765557+00
Date Added: 2024-06-11T09:27:44.753431
License: Public Domain

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   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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
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has not been certified for publication or ordered published for purposes of rule 8.1115.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 EIGHT

ALFONSO VALADEZ,                                                B297672

         Plaintiff and Appellant,                               (Los Angeles County
                                                                Super. Ct. No. BC644587)
         v.

CALIFORNIA COMMERCE
CLUB, INC.,

         Defendant and Respondent.

     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.

                                    ——————————
       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

                                 2
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

                                 3
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.

                                4
                          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.

                                5