Court Opinion

ID: 8484732
Source: CourtListenerOpinion
Date Created: 2022-11-17 21:02:03.810041+00
Date Added: 2024-06-11T16:49:56.429748
License: Public Domain

Filed 11/17/22 Loudon v. DHSE CA2/7
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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has not been certified for publication or ordered published for purposes of rule 8.1115.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 SEVEN

CLAYTON LOUDON,                                              B322559

         Plaintiff and Respondent,                           (Riverside County
                                                             Super. Ct. No.
         v.                                                  PSC1703855)

DHSE, INC. et al.,                                           ORDER MODIFYING
                                                             OPINION
         Defendants and Appellants.                          (NO CHANGE IN THE
                                                             APPELLATE JUDGMENT)

      THE COURT:
      It is ordered that the opinion filed herein on November 16,
2022 be modified as follows:
      At the top of page 2, counsel listing for Plaintiff and
Respondent is changed from “GrahamHollis APC, Graham S.P.
Hollis, Vilmarie Cordero, Nathan Reese; Irvine Law Group and
Rod Bidgoli for Plaintiff and Respondent.” to:
     GrahamHollis APC, Graham S.P. Hollis, Vilmarie Cordero,
     Nathan Reese; Irvine Law Group, Rod Bidgoli; Irvine
     Bidgoli, P.C. and Rod Bidgoli for Plaintiff and Respondent.
                        ____________________

     There is no change in the appellate judgment.

____________________________________________________________
 PERLUSS, P. J.           SEGAL, J.              FEUER, J.

                               2
Filed 11/16/22 Loudon v. DHSE CA2/7 (unmodified opinion)
    NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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has not been certified for publication or ordered published for purposes of rule 8.1115.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 SEVEN

CLAYTON LOUDON,                                                 B322559
                                                                               1

         Plaintiff and Respondent,                              (Riverside County
                                                                Super. Ct. No.
         v.                                                     PSC1703855)

DHSE, INC. et al.,

         Defendants and Appellants.

     APPEAL from an order of the Superior Court of Riverside
County, Sharon J. Waters, Judge. Dismissed.
     The Law Offices of Timothy D. Murphy and Timothy D.
Murphy for Defendants and Appellants.

1
      The California Supreme Court transferred this case from
Division Two of the Fourth Appellate District to Division Seven of
the Second Appellate District on August 24, 2022. The previously
assigned appeal number was E075714.
     GrahamHollis APC, Graham S.P. Hollis, Vilmarie Cordero,
Nathan Reese; Irvine Law Group and Rod Bidgoli for Plaintiff
and Respondent.
                  __________________________
       After the trial court approved the parties’ agreement to
settle Clayton Loudon’s claim under the Labor Code Private
Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2699 et seq.)
and entered judgment in the case, his joint employers DHSE,
Inc., PSTPS, Inc., DHSL, LLC, DHSO, Inc., AACAL, Inc.,
ERS, LLC and Michael Bickford (collectively DHSE) moved to
vacate the judgment. The court granted DHSE’s motion and
vacated the judgment based on excusable neglect. Although no
subsequent judgment or other final disposition has been entered
in the case, DHSE appealed the order approving the PAGA
settlement agreement. Concurrently with its opening brief,
10 months after the order approving the PAGA settlement,
DHSE also filed a petition for writ of mandate seeking review of
that order. We dismiss the appeal as taken from a nonappealable
order. In a separate order we summarily deny the writ petition.
      FACTUAL AND PROCEDURAL BACKGROUND
     1. Loudon’s Action, the PAGA Settlement, and the Order
        Approving the Settlement and Entering Judgment
      Loudon worked for DHSE as a nonexempt employee.
Loudon alleged in his complaint that DHSE failed to pay him
overtime compensation, did not adequately provide off-duty meal
and rest periods and deducted various sums from his paycheck
without written authorization. Loudon asserted individual
claims for various Labor Code violations and unfair business
practices and a representative claim for civil penalties pursuant
to PAGA.

                                2
       Following a full day of mediation the parties settled all
claims alleged in Loudon’s complaint. After several months of
further negotiation, the parties in August 2019 executed an
Individual Settlement Agreement and Mutual Release of Claims
and a Private Attorneys General Act Settlement Agreement and
Limited Release of Claims. The PAGA settlement agreement
required DHSE to prepare a joint motion for court approval of the
settlement. DHSE never prepared the joint motion. Instead, on
January 2, 2020 DHSE filed an opposition to a motion to approve
the settlement, even though no such motion was pending. At a
January 15, 2020 status conference counsel for DHSE explained
he “prepared that opposition anticipating that the motion would
be forthcoming immediately . . . but no motion came.” Counsel
agreed, absent a motion to approve the PAGA settlement
agreement, there was nothing for the trial court to address.
       Approximately six months later Loudon filed a motion to
approve the PAGA settlement, arguing the agreement reflected a
compromise of disputed claims and an award of attorney fees that
were fair and reasonable. DHSE opposed the motion, asserting
the PAGA settlement agreement was illegal because it failed to
allocate between “recoverable penalties and unrecoverable
wages”; the complaint lacked specific joint employer allegations;
Loudon lacked standing to represent other “aggrieved employees”
post-termination; the civil penalties were unjust and confiscatory;
and the attorney fees were excessive. Loudon filed a reply urging
approval of the agreement.
       Following a hearing on July 1, 2020 the trial court granted
Loudon’s motion, finding the PAGA settlement to be fair,
reasonable and adequate with respect to the underlying purposes
of the PAGA statute. On July 16, 2020 the trial court issued an

                                 3
order granting Loudon’s motion to approve the PAGA settlement
and entered judgment resolving both the PAGA and individual
claims in the case. The court reserved jurisdiction over the action
and the parties “for the purposes of: (a) supervising the
implementation, enforcement, construction, and interpretation of
the PAGA Settlement and the Court’s Order Approving the
PAGA Settlement; and (b) supervising distribution of amounts
paid under this Settlement.”
      2. DHSE’s Motion To Vacate the Judgment and the Order
         Vacating Judgment
      On July 28, 2020 DHSE filed a notice of intent to move for
an order vacating the judgment. DHSE contended it had been
unaware a judgment had been entered and stated its preference
that the case be dismissed with prejudice. At the hearing on the
motion to vacate, counsel for DHSE conceded he had previously
indicated entry of a judgment was acceptable, but claimed he had
not consulted with his client and was unaware of the negative
financial impact a judgment would have. Loudon opposed the
motion, pointing to DHSE’s delays throughout the case. The trial
court acknowledged Loudon’s concern and assured him, “[a]t any
time defendants failed to make the payment, there is obviously
your right to come in and obtain a judgment pursuant to
settlement.”
      After taking the matter under submission, on September 3,
2020 the trial court granted DHSE’s motion to vacate the
judgment based on excusable neglect, ruling, “The order
approving the PAGA settlement entered on July 16[,] 2020
stands. Because the PAGA settlement calls for a series of
payments to be made by defendants—dismissal at this time is not
appropriate. Rather—dismissal should be entered only after

                                 4
defendants have fully complied with the settlement.” The court
further ruled, “If defendants fail to make any payment in a
timely fashion[] as called for in the Order Approving PAGA
Settlement, plaintiff may seek entry of judgment pursuant to
CCP Section 664.6 or pursue any other remedies available to
        2
him.”
       3. DHSE’s Appeal and Petition for Writ of Mandate
       On September 11, 2020 DHSE filed its notice of appeal
from the trial court’s “order approving settlement in the action
captioned above, in favor of plaintiff CLAYTON LOUDON as an
individual and as a PAGA representative” including “the court’s
order dated July 1, 2020 approving settlement and the court’s
order dated July 16, 2020 approving settlement.” DHSE attached
to the notice the order entered by the court on July 16, 2020. On
its civil case information statement DHSE stated it was
appealing the July 16, 2020 order pursuant to Code of Civil
Procedure section 904.1, subdivision (a)(1), as a “final order
                     3
disposing all issues.”
        In its opening brief DHSE asserted this court has
jurisdiction to hear its appeal because the trial court’s order
approving the PAGA settlement was a final order fully disposing
of all issues in the case. DHSE argued the substance of an order

2
       On September 30, 2022 at this court’s request, the parties
filed a joint status report indicating further proceedings in the
trial court had been stayed and DHSE has made partial
payments under the terms of the settlement agreements. No
judgment or other final disposition has been entered.
3
      The civil case information statement erroneously stated the
date of entry of the order as July 17, 2020.

                                 5
should prevail over its title, citing Viejo Bancorp, Inc. v. Wood
(1989) 217 Cal.App.3d 200 (Viejo Bancorp), and contended,
“[d]espite vacating its previously entered formal judgment, the
trial court intended that its modifying order should have an
identical immediate effect.” Loudon did not address the issue of
jurisdiction in his respondent’s brief.
       On May 27, 2021, concurrently with its opening brief,
                                           4
DHSE filed a petition for writ of mandate. DHSE argued writ
review of the trial court’s order was appropriate because it had no
adequate remedy at law if this court did not consider its appeal of
the July 16, 2020 order approving the PAGA settlement. DHSE
contended its petition was timely because its notice of appeal
informed Loudon of the issues raised in the petition, its petition
was filed within one year of entry of the challenged order, and
Loudon has not been prejudiced by any delay.
       While the writ petition was still pending in the Fourth
Appellate District, Division Two, the court requested informal
briefing addressing whether an order to show cause should issue.
Loudon’s response did not discuss the criteria for determining
whether the issues merited consideration by way of writ petition.
DHSE’s response reiterated and expanded on the arguments in
its petition urging the court to grant writ relief.
                          DISCUSSION
      1. DHSE’s Purported Appeal Is from a Nonappealable
         Order
      “[A] reviewing court lacks jurisdiction on direct appeal in
the absence of an appealable order or judgment.” (Walker v.

4
      DHSE, Inc. v. Superior Court, B322569. The previously
assigned writ number prior to transfer to this court was E077127.

                                 6
Los Angeles County Metropolitan Transportation Authority (2005)
35 Cal.4th 15, 21; accord, Griset v. Fair Political Practices Com.
(2001) 25 Cal.4th 688, 696; see Jennings v. Marralle (1994)
8 Cal.4th 121, 126 [“[e]xistence of an appealable judgment is a
jurisdictional prerequisite to an appeal”].) “The right to appeal is
wholly statutory. [Citation.] Code of Civil Procedure
section 904.1 lists appealable judgments and orders.” (Dana
Point Safe Harbor Collective v. Superior Court (2010) 51 Cal.4th
1, 5.)
                                                                  5
       Code of Civil Procedure section 904.1, subdivision (a)(1),
authorizes an appeal “[f]rom a judgment, except an interlocutory
judgment, other than as provided in paragraphs (8), (9), and (11),
or a judgment of contempt . . . .” Although the trial court’s order
of July 16, 2020 is most definitely not a judgment—DHSE
successfully moved to vacate the judgment actually entered on
that date—DHSE nonetheless contends its appeal of that order
falls within section 904.1, subdivision (a)(1), because it is a “final
order . . . approving full settlement of all claims and issues in the
case amounting to final disposition of them . . . such that the
order approving settlement is a final judgment of the action
having immediate adverse monetary [e]ffect on the defendants.”
As discussed, DHSE contends that the trial court intended its
September 3, 2020 order vacating the judgment to have the same
effect as a judgment.
       DHSE is incorrect. A prejudgment order approving a
PAGA settlement is not an appealable order. (Moniz v. Adecco
USA, Inc. (2021) 72 Cal.App.5th 56, 71 & fn. 6.) That order is
properly reviewed on appeal only after a timely notice of appeal

5
      Subsequent statutory references are to this code.

                                  7
following entry of judgment. (Ibid.) And the trial court here,
when vacating the judgment it had previously entered, expressly
recognized this by preserving its jurisdiction to enter a judgment
if one was necessary to enforce the settlement or, alternatively, to
dismiss the case if DHSE complied with the settlement and the
matter was finally concluded. Until one of those occurrences, the
case remained unresolved.
        DHSE urges us to consider the substance of the July 16,
2020 order, not its title, in determining whether it is equivalent
to a final judgment appealable pursuant to section 904.1,
subdivision (a)(1). (See Belio v. Panorama Optics, Inc. (1995)
33 Cal.App.4th 1096, 1101 [“‘determining whether a particular
decree is essentially interlocutory and nonappealable, or whether
it is final and appealable . . . [i]t is not the form of the decree but
the substance and effect of the adjudication which is
determinative’”].) “‘As a general test, which must be adapted to
the particular circumstances of the individual case, it may be said
that where no issue is left for future consideration except the fact
of compliance or noncompliance with the terms of the first decree,
that decree is final, but where anything further in the nature of
judicial action on the part of the court is essential to a final
determination of the rights of the parties, the decree is
interlocutory.’” (Id. at pp. 1101-1102.)
        Using this standard, DHSE maintains the July 16, 2020
order approving the PAGA settlement agreement should be
considered a final judgment because no additional adjudication
was necessary in the trial court. Yet, in addition to the fact the
trial court anticipated further action may be necessary to enforce
the settlement and expressly retained jurisdiction for that
purpose in its September 3, 2020 order, DHSE in its opening brief

                                  8
explained it was “determined to oppose and to rescind the
agreement.” Expanding on this point in its reply brief, DHSE
asserted, even “[u]pon filing of the motion [to approve the
settlement,] there still was nothing before the court for the
defendants to rescind because without the court’s approval there
was not yet an agreement.” Thus, DHSE understood approval of
the settlement agreement was just a step in a process—a
prerequisite to its attempt to rescind that agreement—not the
endpoint for proceedings in the trial court. (Cf. Le Francois v.
Goel (2005) 35 Cal.4th 1094, 1107 [trial court has inherent power
to reevaluate its own interim rulings]; Darling, Hall & Rae v.
                                                     6
Kritt (1999) 75 Cal.App.4th 1148, 1155-1157 [same].)
       DHSE’s reliance on Viejo Bancorp, supra, 217 Cal.App.3d
200, to support its argument for appealability is misplaced. In
Viejo Bancorp one of the parties to a settlement agreement moved
to enforce the agreement under section 664.6 in a second case
between the same parties. Before holding the order enforcing the
settlement agreement was void because a motion to enforce under
section 664.6 could not be brought in an action other than the one
in which the settlement had been made (Viejo Bancorp, at
p. 206), the court of appeal held the order was appealable even
though not a “judgment” because it was “clear the trial court
intended to effect a final judgment in the old action,” but could
not because it was no longer pending. (Id. at p. 205.) That
conclusion was fully consistent with the language of
section 664.6, subdivision (a), which authorizes the court to

6
     Notwithstanding its stated intent to seek rescission of the
PAGA settlement agreement, DHSE did not move to rescind the
agreement in the trial court before filing its notice of appeal.

                                9
“enter judgment pursuant to the terms of the settlement.” Here,
in contrast, there was no order akin to a judgment enforcing the
parties’ settlement, only an order approving settlement and
reserving jurisdiction to enter a dismissal if DHSE fully complied
with the settlement’s terms or a judgment in favor of Loudon if it
did not.
       We, of course, have discretion to treat DHSE’s purported
appeal as a petition for writ of mandate and consider the merits
of its challenge to the PAGA settlement on the appellate briefing.
(See Olson v. Cory (1983) 35 Cal.3d 390, 401; Western Bagel Co.,
Inc. v. Superior Court (2021) 66 Cal.App.5th 649, 660; Curtis v.
Superior Court (2021) 62 Cal.App.5th 453, 465.) DHSE has not
made such a request, apparently content to rely on its separately
filed writ petition, and does not address the factors used by the
courts of appeal when deciding whether to do so. (See, e.g.,
Curtis, at p. 465 [discussing the five factors generally considered
in deciding whether to treat an improper appeal as a writ
petition].) We decline to exercise our discretion sua sponte,
particularly since the nonappealability of the July 16, 2020 order
after the court vacated the judgment at DHSE’s request should
have been apparent. (See Olson, at p. 401 [the power to treat a
defective appeal as a petition for writ of mandate “should not [be]
exercise[d] . . . except under unusual circumstances”]; see also
Oak Springs Villas Homeowners Assn. v. Advanced Truss
Systems, Inc. (2012) 206 Cal.App.4th 1304, 1309 [declining to
treat an improper direct appeal as a petition for writ of mandate
“as there is no unusual circumstance or peculiarity that would
justify exercising our discretion”].)

                                10
      2. DHSE’s Petition for Writ of Mandate Is Untimely
     In a separate order we deny DHSE’s petition for writ of
mandate, filed concurrently with its opening brief in this appeal.
The petition is untimely, and DHSE failed to establish
                                        7
circumstances warranting writ review.
       “As a general rule, a petition for writ of mandate should be
filed within the 60-day period applicable to appeals.” (Davis v.
Superior Court (2020) 50 Cal.App.5th 607, 614; Citizens for Open
Government v. City of Lodi (2012) 205 Cal.App.4th 296, 310;
Volkswagen of America, Inc. v. Superior Court (2001)
94 Cal.App.4th 695, 701.) “An appellate court may consider a
petition for an extraordinary writ at any time [citation], but has
discretion to deny a petition filed after the 60-day period
applicable to appeals, and should do so absent ‘extraordinary
circumstances’ justifying the delay.” (Popelka, Allard, McCowan
& Jones v. Superior Court (1980) 107 Cal.App.3d 496, 499;
accord, Nixon Peabody LLP v. Superior Court (2014)
230 Cal.App.4th 818, 821 [“an appellate court may consider a
writ petition at any time despite the 60-day rule if it considers
the circumstances extraordinary,” italics omitted].)

7
      DHSE will have the right to appeal the order approving the
PAGA settlement agreement after the trial court enters a
judgment or order dismissing the case. (See Moniz v. Adecco
USA, Inc., supra, 72 Cal.App.5th at p. 71; Uribe v. Crown
Building Maintenance Co. (2021) 70 Cal.App.5th 986, 990-991.)
In addition, DHSE has not demonstrated irreparable injury
absent immediate writ review (see Los Angeles Gay & Lesbian
Center v. Superior Court (2011) 194 Cal.App.4th 288, 299), not
least because it waited 10 months to file the petition.

                                11
       Under the general rule the last day for DHSE to timely file
a writ petition challenging the July 16, 2020 order was Monday,
September 14, 2020—the first court day after DHSE filed its
notice of appeal. Although DHSE contends filing its notice of
appeal advised Loudon of the issues that would be raised in a
writ petition within the requisite 60 days, no authority supports
DHSE’s argument filing a notice of appeal satisfied the 60-day
rule or justified the delay of an additional eight months before
actually filing its petition.
       DHSE’s alternative argument that it had one year to file a
writ petition because PAGA claims are subject to a one-year
statute of limitations borders the frivolous. DHSE purports to
find support for its novel theory in Kao v. Department of
Corrections & Rehabilitation (2016) 244 Cal.App.4th 1326, in
which an inmate filed a petition for writ of mandate in superior
court to compel the California Department of Corrections and
Rehabilitation to process his disciplinary appeal. (Id. at p. 1331.)
The court of appeal reversed the superior court’s order sustaining
a demurrer to the petition based on the 60-day rule, holding the
three-year statute of limitations of section 388, subdivision (a),
for a liability (or obligation) created by statute applied to Kao’s
petition. (Id. at p. 1334.) The court explained the 60-day rule did
not govern the time for commencing a civil action. “Rather, it is a
judicially created rule used presumptively by appellate courts to
assess the timeliness of nonstatutory writ petitions seeking
discretionary review of trial court decisions” (id. at p. 1333), and
did not apply to an inmate’s petition that sought “to compel the
Department to act and did not seek discretionary review of a
decision by the Department.” (Ibid.)

                                 12
       Unlike Kao, DHSE did not seek to commence a civil action.
It filed a nonstatutory writ petition seeking discretionary review
of the trial court’s prejudgment order approving the parties’
PAGA settlement agreement, precisely the type of order to which
the 60-day rule applies.
                           DISPOSITION
         The appeal is dismissed. The parties are to bear their own
costs.

                                       PERLUSS, P. J.

         We concur:

              SEGAL, J.

              FEUER, J.

                                  13