Court Opinion

ID: 9396205
Source: CourtListenerOpinion
Date Created: 2023-05-19 20:03:37.857098+00
Date Added: 2024-06-11T17:19:14.782138
License: Public Domain

Filed 5/19/23 Lazaro v. Yadav Enterprises CA1/3
                  NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or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

                                      FIRST APPELLATE DISTRICT

                                                DIVISION THREE

 MARTHA VALENCIA LAZARO et
 al.,
           Plaintiffs and Respondents,                                   A165823

 v.                                                                      (Monterey County Super. Ct.
 YADAV ENTERPRISES, INC. et al.,                                         No. 15CV000143)
           Defendants and Appellants.

         Plaintiffs Silvia Contreras and Martha Valencia Lazaro sued their
former employers, Yadav Enterprises, Inc. (fka JIB Management, Inc.),
Central Coast Restaurants, Inc., and Bridget Hernandez (collectively,
defendants) under the Private Attorneys General Act of 2004 (PAGA)
(Lab. Code, § 2698 et seq.), seeking civil penalties for alleged violations of the
Labor Code, including unpaid wages. Amidst a growing fracture in the
Courts of Appeal over whether unpaid wages constituted a civil penalty that
could be recovered under Labor Code section 558 in a PAGA action, the
parties reached a settlement of the entire case and, for more than a year,
sought court approval of the settlement as required by the Labor Code. In
June 2019, the trial court signed an order which—in approving the
settlement and entering judgment thereon—expressed the contemplation of
the parties and the court that the judgment was “intended to be a final
disposition of the Lawsuit in its entirety.”
      A few months later, the California Supreme Court held that unpaid
wages sought under Labor Code section 558 are not civil penalties
recoverable under PAGA. (ZB, N.A. v. Superior Court (2019) 8 Cal.5th 175,
197 (ZB).) The trial court subsequently denied defendants’ motion to vacate
or set aside the judgment. On appeal from this post-judgment order,
defendants contend that ZB must be applied retroactively to this case and
that the trial court abused its discretion in denying relief under various
statutory provisions. We conclude otherwise and affirm.1
                 FACTUAL AND PROCEDURAL BACKGROUND
      A. Proceedings up to settlement and judgment
      Plaintiffs are former employees of defendants’ Jack in the Box
restaurant, and their complaint alleged a single cause of action under PAGA
seeking penalties for defendants’ unlawful wage and hour practices, including
their failures to pay minimum wage, to pay for overtime, to provide breaks
and meal periods, to provide accurate itemized wage statements, and to
maintain accurate timekeeping records. Plaintiffs sought unpaid wages
pursuant to Labor Code section 558 on behalf of themselves and other
aggrieved employees, alleging they were bringing the action “on behalf of the
State of California pursuant to PAGA and not for [their] own individual
causes of action.”
      In 2017, defendants filed motions contending that plaintiffs’ claims for
unpaid wages were not recoverable in a PAGA action and were subject to
arbitration despite the holding in Iskanian v. CLS Transportation Los
Angeles, LLC (2014) 59 Cal.4th 348 that an employment agreement

1     The California Supreme Court transferred this matter from the Court
of Appeal for the Sixth Appellate District to the First Appellate District on
August 9, 2022.

                                       2
purporting to compel the waiver of representative claims under PAGA is
unenforceable as a matter of state law. (Iskanian, at p. 384.) Specifically, in
seeking to bifurcate plaintiffs’ claims for civil penalties from their claims for
unpaid wages and to compel arbitration of the latter, defendants cited the
then-recent decision by the Fifth District Court of Appeal in Esparza v. KS
Industries, L.P. (2017) 13 Cal.App.5th 1228 (Esparza), for the proposition
that Iskanian’s rule barring arbitration of PAGA claims applied only to
“PAGA representative claims for civil penalties,” which excluded claims for
unpaid wages. Plaintiffs countered with Thurman v. Bayshore Transit
Management, Inc. (2012) 203 Cal.App.4th 1112 (Thurman), wherein a
division of the Fourth District Court of Appeal held that Labor Code
section 558’s provision for civil penalties included unpaid wages that would
ultimately be paid entirely to the affected employee. (Thurman, at p. 1145.)
      After the trial court denied defendants’ motion to bifurcate but before it
ruled on their motion to compel arbitration, defendant Central Coast
Restaurants made an offer pursuant to Code of Civil Procedure section 9982
to settle all of plaintiffs’ “claims for penalties, individual wages payable
directly to aggrieved employees, damages, interest, attorneys’ fees and costs”
for $400,000 “in exchange for a judgment of dismissal of the Complaint
against all parties with prejudice.” (Fn. omitted.) Plaintiffs accepted the
offer in November 2017.
      In December 2017, the same appellate division that authored Thurman
issued Lawson v. ZB, N.A. (2017) 18 Cal.App.5th 705, which disagreed with
Esparza. Then, in March 2018, before the parties began to seek the trial

2     All further statutory references are to the Code of Civil Procedure
unless otherwise indicated.

                                        3
court’s approval of the settlement as required by Labor Code section 2699,
subdivision (l)(2), the California Supreme Court granted review in Lawson.
      Thereafter, for more than a year, plaintiffs and all defendants made
joint efforts to obtain court approval of the settlement. Although the parties
were unified in seeking approval of the settlement, a dispute arose whether
the settlement would preclude individual claims for wages by nonparty
employees. Defendants repeatedly urged the court not to decide the issue,
indicating such a ruling would be an unlawful “advisory ruling.” Instead,
defendants urged the court to apply “class settlement procedures” to
nonparty employees because of the possibility the judgment could bind absent
employees as to the unpaid wages claim. (See Arias v. Superior Court (2009)
46 Cal.4th 969, 987 (Arias).)
      On June 5, 2019, the trial court approved the parties’ settlement in the
amount of $400,000, signing a proposed order drafted by defendants. The
order allocated the settlement as follows: $38,636.25 to the Labor Workforce
and Development Agency; $133,333 and $38,107.96 to plaintiffs’ counsel for
attorney fees and litigation costs, respectively; $5,000 to each plaintiff for
their service as PAGA representatives; $7,500 to a consulting company for
calculation of the aggrieved employees’ shares and administration of payment
of the penalties; and $167,423.75 “designated primarily as penalties and to
recover underpaid wages as penalties pursuant to Labor Code section 558.”
The order indicated the amount set aside for penalties and unpaid wages
would be allocated to aggrieved employees pursuant to Labor Code
section 558, subdivision (a)(3), and Thurman. The order entered judgment
and stated: “This Order and Judgment is intended to be a final disposition of
the Lawsuit in its entirety.” The order further indicated: “Without affecting
the finality of this Order or the Judgment entered thereon, the Court retains

                                        4
jurisdiction of all matters relating to the interpretation, administration,
implementation, effectuation and enforcement of the Order and Settlement
Agreement pursuant to Cal Civ. Proc. Code § 664.6.” (Italics added.)
      B. Defendants’ motion to vacate or set aside the judgment
      On September 12, 2019, the California Supreme Court issued its
decision in ZB, holding that “the civil penalties a plaintiff may seek under
section 558 through the PAGA do not include the ‘amount sufficient to
recover underpaid wages.’ ” (ZB, supra, 8 Cal.5th at p. 182.) ZB disapproved
of Thurman and other cases to the extent they were inconsistent with its
holding. (ZB, at p. 196, fn. 8.)
      A week later, defendants filed a notice of intent to vacate or set aside
the June 5, 2019 judgment. Defendants indicated they would move to do so
pursuant to section 663 on the grounds that the judgment (1) did not reflect
the terms of the section 998 offer and (2) failed to afford due process rights to
unnamed parties affected by the judgment. Alternatively, defendants
indicated they would move for relief pursuant to section 473, subdivision (d)
(“473(d)”) on the ground the judgment was void, or section 473,
subdivision (b) (“473(b)”) on the ground of mistake or surprise.
      Before defendants filed their motion, plaintiffs filed a declaration from
their counsel concerning defendants’ efforts to proceed with distribution of
the settlement. Plaintiffs’ counsel explained they were involved in an
unrelated case against defendant Central Coast Restaurant, i.e., a class
action for wage claims with no cause of action under PAGA. This other case
was filed by a plaintiff named Jennifer Garcia in Alameda County then
removed to federal court. Central Coast Restaurant had moved for summary
judgment in the federal court, arguing the order approving the settlement in
the instant PAGA state case barred the federal action under res judicata

                                        5
principles. On September 23, 2019, the federal district court denied the
summary judgment motion, ruling that res judicata did not preclude the class
action insofar as the plaintiff in the class action “neither asserts the same
primary right nor was she adequately represented by the Contreras [Lazaro]
plaintiffs.”3
      On September 27, 2019, defendants filed another notice of motion to
vacate or set aside the judgment and also a memorandum in support.
Relying on section 473(d), defendants argued the judgment was void because,
contrary to the agreed terms of the section 998 offer, “in approving the
settlement, the Court characterized the settlement as one involving
penalties, with unpaid wages among those penalties.” Defendants also
argued the settlement resolved unnamed employees’ claims for damages
without affording them due process. Moreover, relying on ZB, defendants
invoked section 663, arguing the order approving the settlement and the
judgment rested on an erroneous legal basis that unpaid wages constituted
penalties that could be recovered under Labor Code section 558 in a PAGA
only action. Last, relying on section 473(b), defendants claimed the court
should set aside the judgment because they were surprised by the holding in
ZB and had mistakenly believed—based on Thurman and Esparza—that
they could make an offer that included all of the relief sought by plaintiffs.

3     Pursuant to Evidence Code section 452, subdivision (d), defendants
request judicial notice of various court documents in the federal class action
matter, i.e., the complaint, docket, and orders denying defendants’ motions
for summary and to compel arbitration. We deny the request. Defendants
acknowledge the trial court did not judicially notice any of these documents,
and defendants fail to demonstrate the relevance of these documents such
that judicial notice is warranted. (People v. Rowland (1992) 4 Cal.4th 238,
268, fn. 6.) Nonetheless, as can be seen in this factual summation, some
information about this class action and the federal court order denying
summary judgment already appears in the appellate record.

                                        6
      The trial court denied defendants’ motion on July 1, 2020. As relevant
here, the court rejected defendants’ argument that the judgment should be
set aside because “it was entered on an incorrect or erroneous legal basis” in
light of ZB’s subsequent holding that unpaid wages under Labor Code
section 558 are individual damages not penalties. Relying on Campbell v.
Rainey (1932) 127 Cal.App. 747 (Campbell), the court reasoned that
Thurman, supra, 203 Cal.App.4th 1112, was good law at the time the parties
settled the case, and the fact that ZB later overruled Thurman did not
“change the fact this was valid authority at the time of the settlement.”
      Defendants appealed.
                                 DISCUSSION
      A. Judicial Retroactivity and Settlement Agreements
      Relying on the general rule regarding the retroactivity of judicial
decisions, defendants contend the decision in ZB must apply retroactively in
this case. For the reasons below, we cannot agree.
      We acknowledge the general rule that decisions of the California
Supreme Court resolving conflicts amongst the lower courts operate
retroactively. (Donaldson v. Superior Court (1983) 35 Cal.3d 24, 36–37.) But
this case involves a judgment entered pursuant to a settlement agreement
under section 998. “A judgment entered pursuant to a section 998 settlement
is a ‘stipulated or consent judgment [which], being regarded as a contract
between the parties, must be construed as any other contract.’ ” (Milicevich
v. Sacramento Medical Center (1984) 155 Cal.App.3d 997, 1004, fn. 9.)
      Accordingly, the more precise question in this case is whether the
parties’ settlement agreement can be undone by ZB. It has long been settled
that the answer to this question is no.
      Over a century ago, the California Supreme Court addressed this very

                                          7
issue in Cooley v. County of Calaveras (1898) 121 Cal. 482 (Cooley). In
Cooley, the plaintiff, a justice of the peace, presented a claim to the defendant
county for $465 as payment for 155 criminal actions that he tried or
examined. (Cooley, at pp. 483–484.) At the time he presented his claim, an
1895 statute prescribed $3 as payment for each criminal action tried or
examined. (Id. at p. 484.) The county paid the claim, and that payment
constituted “ ‘a complete settlement between plaintiff and defendant
county.’ ” (Ibid.) Sometime later, the Supreme Court issued a decision
holding the 1895 statute unconstitutional, which left standing an 1893
statute that provided a $7 payment for each criminal action tried or
examined. (Id. at pp. 484–485.) The plaintiff then sought recovery of the
additional amount authorized under the 1893 statute, and the county board
of supervisors rejected the claim. (Id. at p. 484.) The Supreme Court held he
could not recover the difference, reasoning “[t]here was no mistake as to the
fees plaintiff should receive when his services were rendered. The statute of
1895 fixed their amount and plaintiff settled upon that basis, and no
subsequent decision of a court can create a mistake and annul a previous
contract which was legal and valid when made.” (Id. at p. 485, italics added.)
In the Supreme Court’s words, “[t]he understanding of the law prevailing at
the time of the settlement of a contract, although erroneous, will govern, and
the subsequent settlement of a question of law by judicial decision does not
create such a mistake of law as courts will rectify.” (Id. at pp. 486–487.)
      In Campbell, supra, 127 Cal.App. 747, a plaintiff stockholder of a bank
paid the defendant Superintendent of Banks part of an assessment that the
defendant had levied against the bank’s stockholders after the bank became
insolvent. (Campbell, at p. 748.) After the California Supreme Court
invalidated the statute on which the defendant relied to levy the assessment,

                                        8
the plaintiff filed an action to recover the amount that he previously paid.
(Ibid.) The defendant appealed from the judgment permitting recovery, and
the Court of Appeal reversed. (Id. at pp. 748, 753.) Citing Cooley, the court
rejected the plaintiff’s contention that “a mutual mistake of law establishes a
sufficient basis for recovery.” (Id. at p. 750.)
      In Bank of America v. Department of Mental Hygiene (1966) 246
Cal.App.2d 578 (Bank of America), the Department of Mental Hygiene
instituted a superior court action against a father to recover money for the
care of his daughter pursuant to Welfare and Institutions Code section 6650,
which imposed “liability for the care and support of a mentally ill person on
certain of his relatives.” (Bank of America, at pp. 580, 587.) The parties
settled that action, and the executor of the father’s will paid the settlement
amount in December 1963. (Id. at p. 581.) Later, in Department of Mental
Hygiene v. Kirchner (1964) 60 Cal.2d 716, the California Supreme Court held
Welfare and Institutions Code section 6650 unconstitutional, and the
executor filed suit in October 1965 to recover the money paid in the
settlement. The trial court sustained a general demurrer to the executor’s
complaint without leave to amend and entered judgment in favor of the
defendant. (Bank of America, at pp. 580–581.) The Court of Appeal affirmed.
(Id. at p. 589.) Citing cases such as Cooley and Campbell, the Court of
Appeal concluded the executor had no cause of action. (Bank of America, at
pp. 585–587.)
      In Cal. Ass’n of Highway Patrolmen v. Dep’t of Pers. Admin. (1986) 185
Cal.App.3d 352 (Highway Patrolmen), plaintiff California Association of
Highway Patrolmen (CAHP) and the State of California entered into a
written memorandum of understanding (MOU) that, in short, provided
“ ‘ordered overtime’ is a necessary precondition of overtime compensation.”

                                         9
(Highway Patrolmen, at pp. 356–357, 361–362.) The MOU was negotiated at
a time when Fowler v. State Personnel Bd. (1982) 134 Cal.App.3d 964
established that “a CHP officer was not entitled to overtime compensation for
his lunch period, even though he was subject to numerous restrictions on his
freedom during his lunch period.” (Highway Patrolmen, at pp. 356–357.) In
July 1984, about a week after execution of the MOU, the California Supreme
Court rendered a decision holding that a city’s rules and regulations
mandated overtime pay to police officers for their mealtimes because of
numerous restrictions on the officers’ freedom during these times. (Highway
Patrolmen, at p. 357, citing Madera Police Officers Assn. v. City of Madera
(1984) 36 Cal.3d 403 (Madera).) In May 1985, CAHP filed a petition for
mandamus to compel the respondent, California Department of Personnel
Administration, “to set aside its decision denying overtime compensation to
officers employed by the California Highway Patrol (CHP) for the one-half
hour lunch period of each working shift.” (Highway Patrolmen, at pp. 356,
358.) The court sustained the defendant’s demurrer without leave to amend,
and the Court of Appeal affirmed. (Id. at pp. 358, 367.)
      As relevant here, the Court of Appeal rejected CAHP’s argument that
Madera compelled payment of overtime, stating the right to overtime “must
be located in the MOU.” (Highway Patrolmen, supra, 185 Cal.App.3d at
pp. 360–361.) The court noted that “ ‘ordered overtime’ is a necessary
precondition of overtime compensation under the MOU” and “the term
‘ordered overtime’ was given a definitive construction” in Fowler. (Highway
Patrolman, at p. 362.) The court held that the MOU’s use of the term
“ ‘ordered overtime’ ” would still be interpreted according to Fowler and that
Madera had “no bearing” on the dispute. Though the court did not examine
the effect of Madera upon Fowler, it reasoned that any effect was immaterial

                                      10
in light of the Cooley decision. As part of its analysis, the Highway
Patrolmen court noted Cooley ’s assessment that “ ‘ “[t]he community would
be in a miserable condition if at every change of opinion upon questions of
law all their previous contracts and settlements were to be overturned.” ’ ”
(Highway Patrolmen, at pp. 364–365, quoting Cooley, supra, 121 Cal. at
p. 486; see also Estate of Propst (1990) 50 Cal.3d 448, 462 (Propst) [a decision
announcing a change in a judicial rule of law will not be “applied to impair
contracts made or property rights acquired in accordance with the prior
rule”].)
      The California Supreme Court has explained that general contract law
principles should apply to section 998 offers and acceptances only where such
principles neither conflict with nor defeat the statutory purpose to encourage
the settlement of lawsuits prior to trial. (T.M. Cobb Co. v. Superior Court
(1984) 36 Cal.3d 273, 280.) Defendants, however, offer no legal or logical
reason why contract principles should not apply in the instant situation. As
a practical matter, general application of the Cooley rule in the context of
section 998 settlements would encourage such settlements by ensuring a
measure of certainty in their enforcement. Conversely, allowing judicial
decisions to retroactively undo settlement agreements—especially those that
are executed with awareness that the relevant law is open to question—
seems unfair and unwise given that the unsettled nature of the law is
typically a circumstance that figures into the calculation of whether to settle
and for how much. (See 1 California Trial Handbook § 13:03 [one
consideration when evaluating whether to settle is the strength of the legal
theories supporting and opposing the claim]; 5 Successful Partnering
Between Inside and Outside Counsel, Partnering strategies in settlement
§ 65:5 [discussing considerations in settling a test case where the law is

                                       11
unsettled].)4
      We turn to address defendants’ contention that ZB must be applied
retroactively because, in their view, no final judgment had been entered when
ZB became final. We see no basis for relief.
      Case law establishes that “a party cannot appeal from a judgment to
which the party has stipulated as part of a settlement.” (Pazderka v.
Caballeros Dimas Alang, Inc. (1998) 62 Cal.App.4th 658, 666; Norgart v.
Upjohn Co. (1999) 21 Cal.4th 383, 400 [a party may not appeal “a judgment
entered by a court under the authority of, and in accordance with, the
contractual agreement of the parties [citation], intended to settle their
dispute fully and finally”]; Mecham v. McKay (1869) 37 Cal. 154, 158 [“we will
not review, on appeal, judgments and orders entered by consent”].)
      Defendants, however, contend the June 5, 2019 judgment was not
“final” until the time for making a direct attack on that judgment had passed.
(See Code Civ. Proc., § 1049.) Relying on Department of Finance v.
Commission on State Mandates (2022) 85 Cal.App.5th 535 (Department of
Finance), defendants contend that, notwithstanding the express
contemplation of the parties and the trial court that the June 5, 2019
judgment was “intended to be a final disposition of the Lawsuit in its
entirety,” the judgment was not final because defendants timely moved to set

4      In urging the trial court to not decide whether the settlement would
preclude individual claims for wages by nonparty employees and to instead
apply class settlement procedures, defendants were clearly aware of Arias,
supra, 46 Cal.4th 969, which explained that nonparty employees could assert
collateral estoppel if an employee plaintiff obtained a favorable judgment, but
the nonparty employees would not be bound by an unfavorable judgment to
an employee plaintiff unless the nonparty employees were given notice of the
PAGA action and an opportunity to be heard. (Arias, at p. 987.) With ZB
pending in the California Supreme Court, it appears reasonably apparent
that this issue figured into defendants’ settlement strategy.

                                       12
aside or vacate that judgment under sections 473 and 663. As relevant here,
Department of Finance held that to be “immune from retroactive or clarifying
legislation, [the decision of the Commission on State Mandates] must be free
from direct attack by a petition for writ of administrative mandate either
because a judgment resolving such a petition has become final and conclusive
or because a petition was not timely filed.” (Department of Finance, at
p. 572.) Notably, however, that case did not involve retroactive application of
a judicial decision to a judgment based on a stipulated settlement, nor did it
discuss the meaning of “final” in such a situation. (Id. at pp. 552–553, 570–
572.)
        In any event, even if we assume arguendo that a judicial decision could
be applied retroactively to a judgment where a party makes a timely motion
under section 473 or section 663, this still leaves us with the rule set out in
Cooley and its progeny. As discussed, that rule supports the trial court’s
decision not to apply ZB retroactively so as to undo the parties’ agreed
settlement of this case.
        Indeed, defendants do not argue that Cooley and its progeny are no
longer good law, and they offer no case law supporting a different outcome in
circumstances similar to those here. Like Department of Finance, supra, 85
Cal.App.5th 535, none of their other authorities applies the general rule of
decisional retroactivity to undo either a stipulated settlement or a judgment
entered thereon where, as here, the terms of the settlement were lawful when
approved. (E.g., Vazquez v. Jan-Pro Franchising Internat., Inc. (2021) 10
Cal.5th 944, 948–954; Penn v. Prestige Stations, Inc. (2000) 83 Cal.App.4th
336, 339–344; In re Marriage of Ankenman (1983) 142 Cal.App.3d 833, 836–
837.)
        With regard to Moniz v. Adecco USA, Inc. (2021) 72 Cal.App.5th 56, the

                                       13
Court of Appeal reversed a judgment and remanded for further proceedings
in a PAGA case after finding that the trial court abused its discretion in
approving a settlement that disproportionately allocated civil penalties
between two classes of aggrieved employees without apparent justification.
(Moniz, at pp. 87―89.) But Moniz focused on procedural challenges to the
appeal (id. at pp. 70–73) and various challenges to the approved settlement
(id. at pp. 73–89); decisional retroactivity was not at issue.
      As for Johnson v. Department of Corrections (1995) 38 Cal.App.4th
1700, the court there did undo a settlement where the appellant had declined
to authorize the settlement. (Johnson, at pp. 1703–1710.) Unauthorized
settlements, however, are subject to considerations different than those
where there is no question concerning authority to settle, as is the case here.
(Zamora v. Clayborn Contracting Group, Inc. (2002) 28 Cal.4th 249, 260
[where attorney’s clerical mistake resulted in a settlement not authorized by
the client, “the public policy favoring settlements has no force”].)
      Finally, defendants contend the rule in ZB should apply in this case
because the decision did not “create or alter the law” but “declared what the
law had always been.” (Newman v. Emerson Radio Corp. (1989) 48 Cal.3d
973, 979.) Though that concept has been criticized as a “ ‘myth’ ” (ibid.), we
note it simply reflects the general rule of retroactivity; it offers no shield
against application of the Cooley exception to that general rule.
      B. Sections 473(b) and 663
      Defendants further contend the trial court should have vacated the
section 998 settlement and judgment pursuant to section 473(b) because they
were based on the mistaken belief that unpaid wages were recoverable in a
PAGA-only action, and defendants were surprised by ZB’s holding to the
contrary. Similarly, defendants cite section 663 and argue the settlement

                                        14
was based on the erroneous legal conclusion that the PAGA settlement could
encompass unpaid wages as penalties, which the California Supreme Court
later rejected in ZB. These contentions fail to persuade.
        Under section 473(b), the trial court has the discretion “on a showing of
‘mistake, inadvertence, surprise or excusable neglect’ to grant relief from a
judgment, dismissal or other order based on its evaluation of the nature of
the mistake or error alleged and the justification proffered for the conduct
that occurred.” (Austin v. Los Angeles Unified School Dist. (2016) 244
Cal.App.4th 918, 928 (Austin).) “A motion to vacate under section 473(b)
‘ “ ‘is addressed to the sound discretion of the trial court, and in the absence
of a clear showing of abuse . . . the exercise of that discretion will not be
disturbed on appeal.’ ” [Citation.] The appropriate test for abuse of
discretion is whether the trial court exceeded the bounds of reason.’ ” (Id. at
p. 929.)
        Section 663 provides in pertinent part: “A judgment or decree, when
based upon a decision by the court . . . may, upon motion of the party
aggrieved, be set aside and vacated by the same court, and another and
different judgment entered, for either of the following causes, materially
affecting the substantial rights of the party and entitling the party to a
different judgment: [¶] 1. Incorrect or erroneous legal basis for the decision,
not consistent with or not supported by the facts; and in such case when the
judgment is set aside, the statement of decision shall be amended and
corrected.” The trial court’s decision to deny a motion to set aside the
judgment is reviewed under the deferential abuse of discretion standard.
(National Secretarial Service, Inc. v. Froehlich (1989) 210 Cal.App.3d 510,
524.)
        As a preliminary matter, we reject defendants’ contention that the trial

                                        15
court abused its discretion by failing to rule on their request for relief under
section 473(b). Because defendants cite nothing in the record indicating the
trial court refused to consider their argument under section 473(b), we
presume the court considered and denied it. (Denham v. Superior Court
(1970) 2 Cal.3d 557, 564; cf. Austin, supra, 244 Cal.App.4th at pp. 926–932
[trial court abused its discretion by explicitly declining to consider a plaintiff’s
section 473(b) motion].)
      On the merits, we cannot conclude the trial court abused its discretion
under either section 473(b) or section 663. Even assuming the June 5, 2019
judgment was not final, as discussed, the court correctly reasoned that “ ‘[t]he
understanding of the law prevailing at the time of the settlement of a
contract, although erroneous, will govern, and the subsequent settlement of a
question of law by judicial decision does not create such a mistake of law as
courts will rectify.’ ” (Quoting Campbell, supra, 127 Cal.App. at p. 750, italics
added.) Moreover, the record indisputably reflects that the parties settled
with full awareness of the decisional split amongst the Courts of Appeal with
regard to whether unpaid wages constituted a “civil penalty” under Labor
Code section 558. On this record, no abuse of discretion appears.
      Finally, defendants contend the trial court’s failure to vacate the
settlement under section 473(b) is “both unjust and contrary to public policy”
because the plaintiff in the pending federal class action against defendant
Central Coast Restaurants is seeking unpaid wages on behalf of aggrieved
employees. As such, defendants claim they might be subjected to possible
“double recovery” of unpaid wages because of the federal class action pending
against them. Because this argument was not raised below and is
unaccompanied by citation to legal authority on point, we decline to address
it here. (In re Aaron B. (1996) 46 Cal.App.4th 843, 846 (Aaron B.).)

                                        16
      C. Section 473(d)
      Relying on section 473(d), defendants next argue the trial court should
have set aside the judgment as void because the judgment included relief that
was contrary to law, i.e., an award of unpaid wages in contravention of ZB.
Defendants argue the entire judgment is void and no part of it can be saved
by excision. We disagree.
      “A judgment is void if the court rendering it lacked subject matter
jurisdiction or jurisdiction over the parties. . . . Lack of jurisdiction in this
‘fundamental or strict sense means an entire absence of power to hear or
determine the case, an absence of authority over the subject matter or the
parties.’ [Citation.] [¶] In a broader sense, lack of jurisdiction also exists
when a court grants ‘relief which [it] has no power to grant.’ [Citations.]
Where, for instance, the court has no power to act ‘except in a particular
manner, or to give certain kinds of relief, or to act without the occurrence of
certain procedural prerequisites,’ the court acts without jurisdiction in this
broader sense.” (Carlson v. Eassa (1997) 54 Cal.App.4th 684, 691.)
      “ ‘When a court has fundamental jurisdiction [over the subject matter
and the parties], but acts in excess of its jurisdiction, its act or judgment is
merely voidable.’ [Citation.] A ‘voidable’ judgment is one that is valid until it
is set aside as void.” (Grados v. Shiau (2021) 63 Cal.App.5th 1042, 1050.)
“The validity of the judgment is to be determined from the law in force when
it is rendered and if valid then subsequent changes in the law cannot affect
it.” (Lake v. Bonynge (1911) 161 Cal. 120, 133; cf. Memphis & L. R. R. Co. v.
Railroad Comm’rs (1884) 112 U.S. 609, 623 [“It is, of course, the law in force
at the time the transaction is consummated and made effectual, that must be
looked to as determining its validity and effect”].)
      As recounted above, the award of unpaid wages was lawful at the time

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of the settlement and the judgment entered thereon; consequently, the
judgment is neither void nor voidable. Defendants’ reliance on 311 South
Spring Street Co. v. Department of General Services (2009) 178 Cal.App.4th
1009 is misplaced. Unlike the situation here, the judgment rendered in 311
South Spring Street Co. was contrary to law at the time the judgment was
entered. (Id. at pp. 1012–1013 & fn. 1, 1015.)
      Defendants also argue the judgment is void because the trial court
acted in excess of its jurisdiction when it approved the settlement despite
plaintiffs’ failure to comply with the following italicized portion of Labor Code
section 2699, subdivision (l): “(2) The superior court shall review and approve
any settlement of any civil action filed pursuant to this part. The proposed
settlement shall be submitted to the agency at the same time that it is
submitted to the court.” (Italics added.)
      But defendants never raised this point below, and they present no
developed argument or authority on appeal why this procedure should be
considered jurisdictional. (Aaron B., supra, 46 Cal.App.4th at p. 846.)
Accordingly, we decline to consider the point for the first time here.5
      Finally, defendants suggest in their opening brief—but do not clearly
argue—that the settlement was not apportioned properly. Later, in their
reply brief, they repeatedly suggest the settlement was not apportioned
properly under Labor Code section 2699, subdivision (i). We do not address
this issue because it was neither preserved nor properly raised on appeal.
Defendants’ motion to vacate or set aside the judgment did not directly
challenge the settlement or judgment on the ground it was improperly

5      Having found defendants’ forfeiture of the issue, we deny their request
for judicial notice of “public search results for a PAGA Notice on the
Department of Industrial Relations (a California agency) website,” which
defendants allege are relevant to this issue.

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apportioned.
        In sum, we reject defendants’ claims of error.
                                              DISPOSITION
        The order of the trial court is affirmed. Plaintiffs are awarded costs on
appeal. (Cal. Rules of Court, rule 8.278.)

                                                 FUJISAKI, J.

WE CONCUR:

TUCHER, P.J.

PETROU, J.

Lazaro v. Yadav Enterprises, Inc. (A165823)

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