Court Opinion

ID: 6104668
Source: CourtListenerOpinion
Date Created: 2022-01-19 20:01:50.350244+00
Date Added: 2024-06-11T08:53:45.343415
License: Public Domain

Filed 1/19/22
                CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                SECOND APPELLATE DISTRICT

                        DIVISION SEVEN

 GUILLERMO ESPINOZA,                B306292

        Plaintiff and Respondent,   (Los Angeles County
                                    Super. Ct. No. NC061371)
        v.

 HEPTA RUN, INC., et al.,

         Defendants and
         Appellants.

      APPEAL from an order and judgment of the Superior Court
of Los Angeles County, Mark C. Kim, Judge. Affirmed in part,
reversed in part with directions.
      Booth, Hillary Arrow Booth and Allan P. Bareng for
Defendants and Appellants Hepta Run, Inc. and Ed Tseng.
      Law Offices of Stephen Glick and M. Anthony Jenkins for
Plaintiff and Respondent.
               ___________________________________
       Guillermo Espinoza sued his former employer, Hepta Run,
Inc., and its owner, Ed Tseng, asserting causes of action for Labor
Code wage and hour violations, unfair business practices in
violation of California’s unfair competition law (Bus. & Prof.
Code, § 17200 et seq.) and representative claims for penalties
under the Labor Code Private Attorneys General Act of 2004
(PAGA) (Lab. Code, § 2698 et seq.).1 Following a bench trial the
court entered judgment in favor of Espinoza for $84,117.73.
Hepta Run and Tseng appeal the judgment, as well as the trial
court’s earlier order denying their motion for summary
adjudication based on federal preemption of Espinoza’s meal and
rest period claims. We agree the trial court erred in denying the
motion for summary adjudication, reverse the judgment to that
extent, otherwise affirm, and remand with directions for the trial
court to redetermine the appropriate damage award and modify
the judgment accordingly.
      FACTUAL AND PROCEDURAL BACKGROUND
      1. Espinoza’s Claims and the Motion for Summary
         Adjudication
      On September 11, 2017 Espinoza filed a complaint, and on
June 21, 2019 the operative fourth amended complaint, against
Hepta Run, Tseng and Tawny Hart, who Espinoza believed to be
the general manager of Hepta Run,2 alleging causes of action for

1     Statutory references are to this code unless otherwise
stated.
2     At the conclusion of Espinoza’s case-in-chief, the trial court
granted Hart’s motion for a directed verdict; and judgment was
entered in her favor on January 23, 2020. Hart is not a party to
this appeal.

                                 2
failure to reimburse for work expenses (§ 2802) (first cause of
action), failure to pay minimum wage for nonproductive time
(§ 1194) (second cause of action), failure to compensate for rest
periods (§ 226.2) (third and fourth causes of action), failure to
provide meal and rest periods (§ 226.7) (fifth and sixth causes of
action), waiting time penalties (§ 203) (seventh cause of action),
failure to furnish itemized wage statements (§ 226) (eighth cause
of action), unfair business practices (ninth cause of action), and
representative claims for civil penalties under PAGA (tenth and
eleventh causes of action). Espinoza further alleged Tseng and
Hart were personally liable for damages accrued after January 1,
2016 for the first, second, and fifth through eighth causes of
action pursuant to section 558.1.
       In April 2019 Hepta Run, Tseng and Hart moved for
summary adjudication on the fifth and sixth causes of action,
arguing the California statutes governing meal and rest periods
were preempted by federal regulations concerning commercial
motor vehicle safety. The motion was denied on July 30, 2019.
      2. The Bench Trial
      The three-day bench trial commenced on November 18,
2019. Espinoza testified he began working as a truck driver for
HRT Trucking, Inc. in December 2015. At some point HRT
changed its name to Hepta Run.3 Espinoza continued to drive a
truck for the company until November 2016.

3     HRT was also named as a defendant in this action. The
operative complaint alleged HRT had surrendered its right to do
business in California, and the record does not indicate HRT
made an appearance in the case. The exact timing of the change
from HRT to Hepta Run and the legal mechanism by which it
was accomplished are unclear from the record. Regardless, Tseng

                                3
      Espinoza testified he worked approximately nine to
12 hours per day, five days a week. At the beginning of each shift
Espinoza went to HRT or Hepta Run’s truck yard to pick up a
truck. He spent approximately 10 minutes doing a pre-trip
inspection, then drove to the Port of Long Beach to pick up a
shipping container. Once he had loaded the container onto the
truck, which could involve waiting two or three hours for the
container, Espinoza drove to the customer’s location to deliver the
container. Espinoza often had to wait two or three hours at the
customer’s location. He also regularly spent time washing and
putting gasoline in the truck. Espinoza was instructed to watch
the truck at all times such that he could not take a meal or rest
break away from the truck. At the end of each shift Espinoza
returned the truck to HRT or Hepta Run’s truck yard and left the
keys there. He typically drove the truck a total of approximately
60 miles each day.
      Espinoza was compensated per completed trip without any
additional or separate payment for time spent waiting, loading
and unloading cargo or maintaining and inspecting the truck; nor
was he compensated for any rest periods. Espinoza was paid
weekly, and his paycheck included deductions for fuel and
insurance. The paychecks did not list the hours worked during
the pay period.
      Tseng did not testify at trial, but portions of his deposition
testimony were received in evidence. Although the owner and
president of both HRT and Hepta Run, Tseng testified he was not

testified he was the sole owner of both companies, and Hepta Run
has not disputed the trial court’s finding it was Espinoza’s
employer during the entirety of his employment with both
entities.

                                 4
involved in the companies’ daily operations and did not know
whether they transported cargo from the Port of Long Beach.
Tseng explained, because he had no knowledge of the trucking
industry, he had hired a professional manager to advise him on
establishing a business model. The manager proposed operating
in California and paying drivers per trip. Tseng approved the
business model.
       At the conclusion of Espinoza’s case-in-chief Tseng moved
for nonsuit, arguing Espinoza had failed to prove his liability
under section 558.1, which provides a person acting on behalf of
an employer who causes a Labor Code wage and hour violation is
liable for the violation. Tseng argued he did not know anything
about the trucking business and had merely approved the
recommendations of the professional manager, which he asserted
was insufficient to impose personal liability under the statute.
The court denied the motion.
       After presenting their evidence Hepta Run and Tseng
moved for a directed verdict, in part based on a lack of evidence
Tseng could be personally liable under section 558.1. The court
denied the motion, finding Tseng’s testimony he did not know
anything about HRT and Hepta Run’s business was not credible.
The court stated, “He was the sole owner of HRT, Hepta Run. He
was the sole president of HRT and Hepta Run. He operated his
business, including his operation in California, by hiring so-called
professional managers. Professional managers presented him
with a model. He approved it.”

                                 5
     3. The Statement of Decision and Judgment
       After hearing closing arguments the court found Hepta Run
and Tseng were liable to Espinoza for Labor Code violations and
requested additional briefing on damages.4
       Espinoza’s damages brief requested total damages on the
first through eighth causes of action of approximately $68,000,
plus interest. No monetary recovery was requested on the unfair
business practices claim. Hepta Run and Tseng filed a response
in which they argued Espinoza had not established liability for
Labor Code violations and Tseng was not personally liable under
section 558.1. They also disputed the methodology used to
calculate the damages, as well as the amounts requested.
       At the outset of the hearing on damages Hepta Run and
Tseng’s counsel informed the trial court they would stipulate to
the damages amount. Hepta Run and Tseng requested a
statement of decision. At the court’s request Espinoza filed a
proposed statement of decision to which Hepta Run and Tseng
objected.
       On March 25, 2020 the trial court overruled the objections
to the statement of decision (other than two minor changes) and
adopted the proposed statement of decision as its final decision.
The statement of decision explained the court’s reasoning for
finding Espinoza was an employee rather than an independent
contractor and finding Tseng was individually liable pursuant to
section 558.1. The court found Hepta Run and Tseng had
deducted business expenses from Espinoza’s compensation

4     The trial court found Espinoza was an employee of Hepta
Run and HRT, not an independent contractor. The court also
found Espinoza failed to establish a representative claim under
PAGA. Neither finding has been appealed.

                                6
without reimbursing him, did not compensate him for rest
periods and nonproductive time and did not provide him with
required meal and rest periods.
      Judgment was entered on May 22, 2020. Espinoza was
awarded $62,710.81, plus interest of $15,901.53, against Hepta
Run and Tseng jointly and severally. In addition, Espinoza was
awarded an additional $3,975.28, plus interest of $1,530.11,
against Hepta Run only.5
                          DISCUSSION
      1. Standard of Review
       On appeal from a judgment based on a statement of
decision following a bench trial, we review the trial court’s legal
interpretation of the governing statutes de novo and the court’s
factual findings for substantial evidence. (See Ghirardo v.
Antonioli (1994) 8 Cal.4th 791, 801; Veiseh v. Stapp (2019)
35 Cal.App.5th 1099, 1104.)
       Substantial evidence review requires that we “‘“‘consider all
of the evidence in the light most favorable to the prevailing party,
giving it the benefit of every reasonable inference, and resolving
conflicts in support of the [findings]. [Citations.]’ [Citation.] We
may not reweigh the evidence and are bound by the trial court’s
credibility determinations. [Citations.] Moreover, findings of fact
are liberally construed to support the judgment.”’” (Tribeca
Companies, LLC v. First American Title Ins. Co. (2015)

5     Because the statute providing for personal liability of an
employer or its representative (§ 558.1) did not go into effect until
January 1, 2016, Espinoza sought damages from Tseng as of that
date. Damages incurred in 2015 were sought from Hepta Run
only.

                                  7
239 Cal.App.4th 1088, 1102; accord, Sav-On Drug Stores, Inc. v.
Superior Court (2004) 34 Cal.4th 319, 334 [“‘questions as to the
weight and sufficiency of the evidence, the construction to be put
upon it, the inferences to be drawn therefrom, the credibility of
witnesses . . . and the determination of [any] conflicts and
inconsistencies in their testimony are matters for the trial court
to resolve’”]; Western States Petroleum Assn. v. Superior Court
(1995) 9 Cal.4th 559, 571 [“‘[w]hen two or more inferences can be
reasonably deduced from the facts, the reviewing court is without
power to substitute its deductions for those of the trial court’”].)
      2. The Trial Court Erred by Denying the Motion for
         Summary Adjudication
        a. Relevant procedural background
      Hepta Run and Tseng moved for summary adjudication on
Espinoza’s fifth (meal periods) and sixth (rest periods) causes of
action, arguing California laws and industry regulations
providing for meal and rest periods were preempted by federal
regulations governing truck drivers. In opposition Espinoza
argued the federal regulations did not apply to short haul truck
drivers like him. The trial court agreed with Espinoza and
denied the motion for summary adjudication.6

6     Generally, the denial of a motion for summary adjudication
is deemed to be “harmless error after a full trial covering the
same issues.” (Legendary Investors Group No. 1, LLC v. Niemann
(2014) 224 Cal.App.4th 1407, 1410-1411.) However, “denial of
the motion may constitute prejudicial error if the motion is
denied on a legal ground not presented at trial.” (Id. at p. 1411;
see also Federal Deposit Ins. Corp. v. Dintino (2008)
167 Cal.App.4th 333, 343.) Because the summary adjudication
motion here did not involve disputed issues of fact and the

                                 8
        b. General principles of preemption
       The United States Supreme Court has traditionally
recognized preemption of state law by federal enactments
pursuant to the supremacy clause (U.S. Const., art. VI, cl. 2) in
three circumstances: (1) express preemption; (2) implied (or field)
preemption; and (3) conflict preemption. (English v. General
Electric Co. (1990) 496 U.S. 72, 78-79 [110 S.Ct. 2270].) Express
preemption, which is pertinent here, exists when Congress
defines the extent to which its enactments will displace state law.
(Id. at p. 78; accord, Pacific Gas & Elec. Co. v. State Energy Res.
Conservation & Dev. Com. (1983) 461 U.S. 190, 203-204 [103
S.Ct. 1713] [“[i]t is well established that within constitutional
limits Congress may pre-empt state authority by so stating in
express terms”]; Valencia v. SCIS Air Security Corp. (2015)
241 Cal.App.4th 377, 383 [“Congress has the power to enact
federal laws that trump or ‘preempt’ conflicting state laws and
may exercise that power by enacting an express preemption
provision”].) “If a federal law contains an express pre-emption
clause, it does not immediately end the inquiry because the
question of the substance and scope of Congress’ displacement of
state law still remains.” (Altria Group, Inc. v. Good (2008)
555 U.S. 70, 76 [129 S.Ct. 538].)
       “Federal regulations may preempt state law just as fully as
federal statutes. [Citation.] An agency may preempt state law
through regulations that are within the scope of its statutory
authority and that are not arbitrary.” (Washington Mutual Bank
v. Superior Court (2002) 95 Cal.App.4th 606, 612; accord,

argument was not raised at trial, we review the court’s order
denying the motion for summary adjudication.

                                 9
Louisiana Public Service Com. v. FCC (1986) 476 U.S. 355, 369
[106 S.Ct. 1890] [“Pre-emption may result not only from action
taken by Congress itself; a federal agency acting within the scope
of its congressionally delegated authority may pre-empt state
regulation”].) A federal agency’s preemption determination based
on interpretations of its own regulations and of the statutory
scheme it administers should be accorded substantial deference.
(Kisor v. Wilkie (2019) __ U.S. __ [139 S.Ct. 2400, 2415] [courts
should defer to agency’s reasonable reading of “genuinely
ambiguous” regulations]; Chevron, U.S.A., Inc. v. Natural Res.
Def. Council (1984) 467 U.S. 837, 844 [104 S.Ct. 2778]
[“considerable weight should be accorded to an executive
department’s construction of a statutory scheme it is entrusted to
administer”]; Washington Mutual Bank, at p. 620, fn. 5 [“[a]n
agency’s construction of its own regulations is entitled to
substantial deference”]; see also Zubarau v. City of Palmdale
(2011) 192 Cal.App.4th 289, 306 [“[a]n agency declaration of
preemption can preempt unless the authorizing statute or
legislative history of the statute is to the contrary”].)
        c. California meal and rest break rules
      California law provides every nonexempt employee in the
transportation industry must be provided with a 30-minute meal
period for every five hours worked and a 10-minute rest period
for every four hours worked. (Cal. Code Regs., tit. 8, § 11090,
subds. 11 & 12; see also § 226.7, subd. (c).) “If an employer fails
to provide an employee a meal or rest or recovery period[7] in
accordance with a state law, including, but not limited to, an

7    A “‘recovery period’ means a cooldown period afforded an
employee to prevent heat illness.” (§ 226.7, subd. (a).)

                                10
applicable statute or applicable regulation, . . . the employer shall
pay the employee one additional hour of pay at the employee’s
regular rate of compensation for each workday that the meal or
rest or recovery period is not provided.” (§ 226.7, subd. (c); Cal.
Code Regs., tit. 8, § 11090, subds. 11(D) [meal periods] & 12(B)
[rest periods].)
        d. Applicable federal regulations
       The Motor Carrier Safety Act of 1984 empowers the
Secretary of Transportation to “prescribe regulations on
commercial motor vehicle safety,” including regulations ensuring
“the responsibilities imposed on operators of commercial motor
vehicles do not impair their ability to operate the vehicles safely.”
(49 U.S.C. § 31136(a).) One such set of regulations, often referred
to as the hours of service regulations or HOS, imposes limits on
driving time and on duty time for commercial truck drivers. (See
49 C.F.R. § 395.3 (2020).)
       Pursuant to the HOS regulations property-carrying
commercial truck drivers are subject to daily and weekly limits
on driving time and on-duty time and are mandated to have
10 consecutive hours off duty between shifts. (49 C.F.R. § 395.3
(2020).) In addition, long haul truck drivers are required to take
a 30-minute rest break for every eight hours worked; short haul
drivers are exempted from the 30-minute rest break requirement.
(49 C.F.R. § 395.3(a)(ii).)8

8     During the relevant time period, a property-carrying short
haul driver was defined as a driver who “operates within a 100
air-mile radius of the normal work reporting location”; “returns to
the work reporting location and is released from work within
12 consecutive hours”; and “has at least 10 consecutive hours off-

                                 11
        e. The Federal Motor Carrier Safety Administration’s
           preemption determination
       The Motor Carrier Safety Act of 1984 gives the Secretary of
Transportation the authority to preempt state law if certain
criteria are met. (49 U.S.C. § 31141(a) [“[a] State may not
enforce a State law or regulation on commercial motor vehicle
safety that the Secretary of Transportation decides under this
section may not be enforced”].) To declare a state law preempted
the Secretary must first find the state law is either less stringent,
additional to or more stringent than the federal regulation; and,
if the state law is additional to or more stringent, the Secretary
must find the state law has no safety benefit, is incompatible
with the federal regulation, or enforcement of the state law would
cause an unreasonable burden on interstate commerce.
(49 U.S.C. § 31141(c).) The Secretary has delegated this
preemption analysis and determination to the Administrator for
the Federal Motor Carrier Safety Administration (FMCSA).
(49 C.F.R. § 1.87(f) (2020).)
       In 2018, in response to petitions from two industry groups,
the FMCSA issued an order stating the California meal and rest
break rules (§ 226.7) were preempted by the federal hours of
service regulations. (See California’s Meal and Rest Break Rules
for Commercial Motor Vehicle Drivers, 83 Fed.Reg. 67470-67480
(Dec. 28, 2018).) The FMCSA undertook the preemption analysis
mandated by Congress, finding California’s laws were additional
to or more stringent than the federal regulations, had no safety
benefit beyond those provided by the federal regulations, were

duty separating each 12 hours on duty.” (49 C.F.R. § 395.1(e)(1)
(2016).)

                                 12
incompatible with the federal regulations and would cause an
unreasonable burden on interstate commerce. Accordingly, the
FMCSA concluded, “California may no longer enforce the [Meal
and Rest Break] Rules with respect to drivers of property-
carrying [commercial motor vehicles] subject to FMCSA’s HOS
rules.” (83 Fed.Reg. 67480.) Recently, the Ninth Circuit upheld
the FMCSA’s determination, finding the agency’s “decision
reflects a permissible interpretation of the Motor Carrier Safety
Act of 1984 and is not arbitrary or capricious.” (International
Brotherhood of Teamsters, Local 2785 v. Federal Motor Carrier
Safety Administration (9th Cir. 2021) 986 F.3d 841, 846.)
        f. The FMCSA’s preemption determination applies to
           short haul drivers
       Espinoza does not challenge the findings of the FMCSA or
its ultimate determination, where applicable, that California
meal and rest period requirements are preempted by the federal
hours of service regulations. Rather, Espinoza argues the
preemption determination does not apply to short haul drivers.
Citing the language of the FMCSA’s preemption order stating it
applies to drivers “subject to FMCSA’s HOS rules” (83 Fed.Reg.
67480), Espinoza argues this means “that it applies to drivers
subject to the HOS rules, not that the Order applies to drivers
who are subject to some of the HOS rules.” His position, in other
words, is, because short haul drivers are exempted from one of
the HOS rules (the 30-minute rest break rule), the preemption
order does not apply to them.
       We decline to adopt such a strained and cramped
interpretation of the FMCSA’s preemption order. It is
undisputed that certain hours of service rules apply to short haul
drivers, such as the daily limits on driving time and the daily and

                                13
weekly limits on on-duty time. Thus, the HOS rules, as a general
matter, apply to short haul drivers. The fact that those drivers
are exempted from one rule does not remove them from the
universe of drivers subject to the hours of service rules, and it is
not reasonable to read the language of the order to suggest they
are.
       This common sense interpretation of the preemption order
is reinforced by the fact that the FMCSA, had it intended to
exclude short haul drivers from its preemption determination,
could have easily, and explicitly, done so. In fact, one of the
petitions prompting the FMCSA’s opinion requested a declaration
that California’s meal and rest break laws “‘are preempted from
being applied to drivers subject to the HOS regulations on rest
breaks.’” (83 Fed.Reg. 67472.) The FMCSA, however, did not use
this limiting language, instead repeatedly stating its decision
applied to drivers subject to the federal HOS regulations
generally. (See 83 Fed.Reg. 67470 [“FMCSA grants the petitions
insofar as the provisions at issue apply to drivers of property-
carrying [commercial motor vehicles] subject to the FMCSA’s
hours of service regulations”], 67474 [California rules were
subject to preemption review because they concern motor vehicle
safety “as applied to property-carrying [commercial motor
vehicle] drivers that are within the Agency’s HOS jurisdiction”],
67477 [“the Agency determines that [California’s meal and rest
break rules] are incompatible with the Federal HOS
regulations”].)
       Furthermore, the FMCSA’s reasoning for its preemption
decision does not support Espinoza’s interpretation of the
opinion. For example, in determining California’s rules were
incompatible with federal regulations, the FMCSA stated that

                                 14
California’s rules “are more stringent than the Federal HOS
regulations . . . . Not only do the [California meal and rest break
rules] require employers to provide [commercial motor vehicle]
drivers with more rest breaks than the Federal HOS regulations,
the timing requirements for rest periods under the [California
meal and rest break rules] provide less flexibility than the
Federal HOS regulations. . . . [The California requirements] . . .
significantly reduce[ ] the flexibilities the Agency built into the
Federal HOS regulations, and they graft onto the Federal HOS
rules additional required rest breaks that the Agency did not see
fit to include.” (83 Fed. Reg. 67478.) Given that short haul
drivers are not required to take any specified rest breaks under
the federal rules, the Agency’s concern over California’s
additional rest break requirement would be heightened for short
haul drivers, not diminished. Accordingly, the FMCSA’s
reasoning supports applying preemption to short haul drivers
rather than excluding them.9 The motion for summary

9      The few federal court decisions that have considered the
question whether the FMCSA’s preemption order applies to short
haul drivers have likewise found it does, albeit without any
explanation for their conclusion. (See Salter v. Quality Carriers,
Inc. (C.D.Cal. Oct. 27, 2021, No. CV 20-479-JFW (JPRx)) 2021
U.S.Dist. Lexis 213111, at p. *28 [“Plaintiff has failed to
demonstrate that the FMCSA’s Order does not apply [to] short
haul drivers”]; Robinson v. Chefs’ Warehouse, Inc. (N.D.Cal.
Sept. 10, 2019, No. 15-cv-05421-RX) 2019 U.S.Dist. Lexis 154383,
at p. *12 [“Plaintiffs have not shown, however, that the Order
excludes short haul drivers”]; but see Arrellano v. XPO Port
Service Inc. (C.D.Cal. Mar. 30, 2021, No. 2:18-CV-08220-RGK(E))
2021 U.S.Dist. Lexis 193382, at pp. *7-8 [noting employer “does
not dispute that the FMCSA order does not preempt meal and
rest break claims that are brought by short-haul drivers” but

                                15
adjudication on Espinoza’s fifth and sixth causes of action should
have been granted.
      3. The Trial Court Did Not Err in Finding Tseng
         Personally Liable Pursuant to Section 558.1
        a. Governing law
       Effective January 1, 2016, section 558.1 provides: “(a) Any
employer or other person acting on behalf of an employer, who
violates, or causes to be violated, any provision regulating
minimum wages or hours and days of work in any order of the
Industrial Welfare Commission, or violates, or causes to be
violated, Sections 203, 226, 226.7, 1193.6, 1194, or 2802, may be
held liable as the employer for such violation. [¶] (b) For
purposes of this section, the term ‘other person acting on behalf of
an employer’ is limited to a natural person who is an owner,
director, officer, or managing agent of the employer, and the term
‘managing agent’ has the same meaning as in subdivision (b) of
Section 3294 of the Civil Code.”10

finding plaintiff had failed to plead that all class members were
short haul drivers].)
10    Section 3294, subdivision (b), of the Civil Code provides an
employer shall not be liable for punitive damages based on acts of
an employee unless there has been “advance knowledge and
conscious disregard, authorization, ratification or act of
oppression, fraud, or malice” on the part of “an officer, director, or
managing agent of the corporation.” Courts have defined a
“managing agent” pursuant to this statute to be an employee who
“exercises substantial discretionary authority over decisions that
ultimately determine corporate policy.” (White v. Ultramar, Inc.
(1999) 21 Cal.4th 563, 573.)

                                  16
       Prior to the enactment of section 558.1 an employee could
generally not recover damages for wage and hour violations from
an individual owner or officer of the employer unless the
employee could prove some other legal basis for liability such as
alter ego liability. (See Voris v. Lampert (2019) 7 Cal.5th 1141,
1159 [recognizing limited remedies for employees to recover
against individual officers prior to section 558.1].) As a result,
even when an employee obtained a judgment against a corporate
employer, “the process of collecting the award [was] often difficult
and ineffective. Irresponsible employers may have hidden their
cash assets, declared bankruptcy, or otherwise become judgment-
proof.” (Assem. Com. on Judiciary, Analysis of Sen. Bill No. 588
(2015-2016 Reg. Sess.) as amended July 1, 2015, p. 4; accord, Sen.
Com. on Labor & Industrial Relations, Analysis of Sen. Bill
No. 588 (2015-2016 Reg. Sess.) Apr. 29, 2015, pp. 5-6 [“the vast
majority of wage theft victims received nothing, and those that
received anything received little of what they were legally due”].)
       In response to this problem, section 558.1 was intended by
the Legislature to expand liability for wage and hour violations
and “discourage business owners from rolling up their operations
and walking away from their debts to workers and starting a new
company.” (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 588
(2015-2016 Reg. Sess.) Apr. 20, 2015, p. 12; see also Voris v.
Lampert, supra, 7 Cal.5th at p. 1161 [section 558.1 “targets
individual officers who are involved in the failure to pay wages”].)
        b. Substantial evidence supports the finding Tseng
           caused the Labor Code violations
      Tseng contends he cannot be held liable pursuant to
section 558.1 because he was uninvolved in both the daily
operation of Hepta Run and the creation of the policies governing

                                 17
its operation and argues the trial court improperly found him
liable “solely by virtue of his status as the sole owner” of HRT
and Hepta Run. Tseng’s challenge to the trial court’s liability
finding is belied by the record. As discussed, the trial court
explicitly found Tseng’s testimony that he lacked knowledge of
the business’s daily operations not credible. Further, the court
stated it based its finding of personal liability not merely on
Tseng’s status as owner and officer but also on the undisputed
testimony he had approved the policy establishing the method of
driver compensation. We agree with the trial court an owner’s or
officer’s approval of a corporate policy that violates the Labor
Code is sufficient to find that individual caused the Labor Code
violation within the meaning of section 558.1.
       Only one published California case has addressed what acts
are sufficient for a finding of personal liability under
section 558.1. In Usher v. White (2021) 64 Cal.App.5th 883, our
colleagues in Division One of the Fourth District considered
whether personal liability could be imposed on a corporate officer
who assisted with administrative and banking tasks but had no
role in day-to-day operations or employment policies. After
reviewing recent federal district court decisions, which generally
had found an individual could not be liable under section 558.1
simply by virtue of his or her status as an owner, director or
officer but must have been “‘personally involved’ in the alleged
violations” or “engaged in ‘individual wrongdoing’” (Usher, at
pp. 895-896),11 the Usher court concluded, “[T]o be held liable

11     Cases discussed by the Usher court included Rios v. Linn
Star Transfer, Inc. (N.D.Cal. Apr. 6, 2020, Nos. 19-cv-07009-JSC
et al.) 2020 U.S.Dist. Lexis 60270, at pages *14-15 and Plaksin v.

                                18
under section 558.1, an ‘owner’ . . . must either have been
personally involved in the purported violation of one or more of
the enumerated provisions; or, absent such personal involvement,
had sufficient participation in the activities of the employer,
including, for example, over those responsible for the alleged
wage and hour violations, such that the ‘owner’ may be deemed to
have contributed to, and thus for purposes of this statute,
‘cause[d]’ a violation.” (Id. at pp. 896-897.) The court further
cautioned that whether an individual could be liable under
section 558.1 “cannot be determined by any bright-line rule, as
this inquiry requires an examination of the particular facts in
light of the conduct, or lack thereof, attributable to the
[individual].” (Id. at p. 897.) Turning to the case before it, the
court held the individual defendant was not liable because the
undisputed facts showed she had not participated in the relevant
employment decisions. (Ibid. [“Shirley was never consulted
about, or provided any guidance regarding, the classification of
service technicians; played no role in the hiring of technicians;
did not create, draft or contribute to the content of any of the
independent contractor agreements utilized by White
Communications; and did not sign any such agreements on behalf
of the company”].)
       We agree generally with Usher and the federal cases it
cited that, in order to “cause” a violation of the Labor Code, an
individual must have engaged in some affirmative action beyond
his or her status as an owner, officer or director of the
corporation. However, that does not necessarily mean the

Newsight Reality (C.D.Cal. Apr. 30, 2019, No. 2:19-cv-00458-
RGK-SS) 2019 U.S.Dist. Lexis 168063, at page *13.

                                19
individual must have had involvement in the day-to-day
operations of the company, nor is it required the individual
authored the challenged employment policies or specifically
approved their implementation. But to be held personally liable
he or she must have had some oversight of the company’s
operations or some influence on corporate policy that resulted in
Labor Code violations.
      The record in the present case amply supported the trial
court’s finding Tseng “caused” the Labor Code violations within
the meaning of section 558.1. It was undisputed Tseng was the
sole owner and president of both HRT and Hepta Run, and he
admitted he had approved the policy regarding payment of truck
drivers that violated various provisions of the Labor Code.
Although he testified he had no involvement in or knowledge of
the business’s operations the trial court did not credit that
testimony, justifying the conclusion Tseng knew how his drivers
were paid (and not paid).
      4. Hepta Run and Tseng’s Arguments Challenging the
         Sufficiency of the Evidence Have Been Forfeited
       In their opening brief Hepta Run and Tseng present a
convoluted, two-page argument that, while briefly suggesting
error in the statement of decision and rearguing the federal
preemption issue, appears to challenge the trial court’s judgment
on substantial evidence grounds. However, despite pointing out
that each of Espinoza’s 11 causes of action “has required
elements that need to be established by a preponderance of the
evidence,” in their opening brief Hepta Run and Tseng fail to
identify those elements or provide any legal argument explaining

                                20
how the evidence at trial was insufficient to support a finding
those elements had been met.12
        Hepta Run and Tseng’s challenge to the sufficiency of the
evidence to support the court’s ruling has been forfeited. (See
Mansell v. Board of Administration (1994) 30 Cal.App.4th 539,
545-546 [“‘an appellate brief “should contain a legal argument
with citation of authorities on the points made. If none is
furnished on a particular point, the court may treat it as waived,
and pass it without consideration”’”].) They have failed to make
even a minimum showing warranting consideration. (See
Del Real v. City of Riverside (2002) 95 Cal.App.4th 761, 768 [“it is
counsel’s duty to point out portions of the record that support the
position taken on appeal”; “[t]he appellate court is not required to
search the record on its own seeking error”]; Mansell, at pp. 545-
546 [it is not the proper function of court of appeal to search the
record on behalf of appellants or to serve as “backup appellate
counsel”].)
      5. Hepta Run and Tseng’s Arguments Challenging the
         Amount of Damages Have Been Forfeited
      Hepta Run and Tseng argue Espinoza’s damages
calculations relied on inadmissible evidence and improper
methodologies. However, Hepta Run and Tseng consented to the
amount of damages awarded.
      At the outset of the hearing on damages, Hepta Run and
Tseng’s counsel requested a recess to discuss the damage
amounts with Espinoza’s counsel. After the recess Espinoza’s
counsel informed the court the parties had agreed to a small
reduction in the amount requested and would stipulate to

12    Hepta Run and Tseng did not file a reply brief.

                                 21
damages of $62,710.81, plus interest of $15,901.53, for which
Hepta Run and Tseng would be jointly liable and an additional
$3,973.28, plus interest of $1,530.11, for which Hepta Run was
separately liable. The trial court asked Hepta Run and Tseng’s
counsel, “So based on stipulation, you’re still contesting liability.
Assuming liability is upheld, you’re stipulating to the numbers in
terms of damages, correct?” Counsel replied, “That’s correct, your
honor.” The court then read the amounts and asked counsel
again if he stipulated to those amounts. Counsel replied that he
did. Judgment was later entered in the amount stated on the
record. Appellants’ opening brief fails to address the stipulation,
and they declined to file a reply brief.
      Having stipulated to the amount of damages, Hepta Run
and Tseng have forfeited their claim of error. (See People v.
Seumanu (2015) 61 Cal.4th 1293, 1328 [“‘when a party enters
into a voluntary stipulation, he generally is precluded from
taking an appeal claiming defects in the stipulation’”]; People v.
Gurule (2002) 28 Cal.4th 557, 623 [same]; In re Marriage of
Freeman (1996) 45 Cal.App.4th 1437, 1452 [same].)
                          DISPOSITION
      We reverse the judgment as to the fifth and sixth causes of
action and reverse the order denying summary adjudication on
those causes of action. In all other respects, we affirm. On
remand, the trial court is directed to grant the motion for
summary adjudication, redetermine the proper damage award on

                                 22
the remaining causes of action on which Espinoza prevailed and
enter a modified judgment in accordance with this opinion. The
parties are to bear their own costs on appeal.

                                        PERLUSS, P. J.

     We concur:

           SEGAL, J.

           FEUER, J.

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