Court Opinion

ID: 2651868
Source: CourtListenerOpinion
Date Created: 2014-01-31 19:28:23.805128+00
Date Added: 2024-06-11T12:57:26.171169
License: Public Domain

Filed 1/31/14 Plata v. Darbun Enterprises CA4/1
                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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.

                    COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                                                  DIVISION ONE

                                           STATE OF CALIFORNIA

JAVIER TENORIO PLATA, et al.,                                       D062517

         Plaintiffs and Appellants,

         v.                                                         (Super. Ct. No. 37-2011-00059024-
                                                                     CU-MC-NC)
DARBUN ENTERPRISES, INC.,

         Defendant and Respondent.

         APPEAL from a judgment of the Superior Court of San Diego County, Thomas P.

Nugent, Judge. Reversed.

         Stillman & Associates and Philip H. Stillman for Plaintiffs and Appellants.

         Squires, Sherman & Bioteau and Bruce Sherman for Defendant and Respondent.

         Eighteen individuals (plaintiffs) filed a superior court complaint against Darbun

Enterprises, Inc. (Darbun) seeking recognition of a 2004 Mexican judgment that was

renewed in July 2008. The court sustained Darbun's demurrer without leave to amend on

the ground that the Mexican judgment is a "penalty" and thus not enforceable under
California's Uniform Foreign-Country Money Judgments Recognition Act ("Foreign-

Country Judgments Act" or "Act"). (Code Civ. Proc., § 1713 et seq.)1

       The Foreign-Country Judgments Act does not permit enforcement of a foreign

judgment "to the extent" the judgment is a "fine or other penalty." (§ 1715, subd. (b)(2).)

We determine the court erred in ruling at the pleadings stage that the entire Mexican

judgment is a "penalty" as a matter of law and thus unenforceable in California.

Although a substantial portion of the Mexican judgment constitutes a penalty, plaintiffs

have pled sufficient facts to overcome the Act's enforcement bar with respect to the

remaining portions of the judgment. Accordingly, we reverse.2

                  FACTUAL AND PROCEDURAL BACKGROUND

       In reviewing the court's ruling sustaining the demurrer, we are limited to

considering facts alleged in the complaint and the attached incorporated documents. (See

Donabedian v. Mercury Ins. Co. (2004) 116 Cal. App. 4th 968, 994.) In its respondent's

brief, Darbun discusses numerous facts that are beyond the scope of the complaint and

are unsupported by any citation to the appellate record. Under settled rules, we disregard

these unsupported factual assertions. (See Duarte v. Chino Community Hospital (1999)

72 Cal. App. 4th 849, 856.)

1      Further unspecified statutory references are to the Code of Civil Procedure.

2      Plaintiffs also sued another party to the underlying judgment, but this defendant is
not a party to the appeal. We thus omit further references to this party.

                                             2
                                        Complaint

       Plaintiffs' complaint alleges the following. Plaintiffs were employees of

Soluciones Tecnologicas de Mexico, S.A. de C.V. (Soluciones). Darbun was part of a

production unit responsible for paying wages to Soluciones employees. After plaintiffs

were not paid their wages due, they "commenced an action" before a Mexican

governmental entity known as the "Labor Relations Board."3 Plaintiffs filed this claim

on May 31, 2000 and sought "back wages."

       Darbun was notified of the action by the Mexican Consulate General and allegedly

appeared and defended the action through its counsel. Darbun's counsel presented

evidence at several hearings before the Labor Relations Board. In January 2002, the

Labor Relations Board held a hearing "where Darbun's attorneys . . . appeared on behalf

of Darbun and presented written answers to questions . . . by the Labor Relations

Board . . . ."

       Two and one-half years later, in August 2004, the Labor Relations Board entered a

judgment against Darbun in plaintiffs' favor. Plaintiffs attached to their complaint a copy

of the 44-page Mexican judgment and an English translation of this judgment.

       In the Mexican judgment, the Labor Relations Board found "plaintiffs proved their

claims [at] trial," and awarded monetary amounts to each plaintiff. The translated

judgment states that Darbun and others were responsible for the "rescission" of plaintiffs'

employment on May 9, 2000 after the plaintiffs were informed that "starting on April 28,

3     Plaintiffs identify this board as the "Number One Special Local [Labor Relations]
and Conciliation and Arbitrage Local Authority of the City of Tijuana."
                                             3
[2000] [their] salaries would not be paid." Although the judgment awards various forms

of monetary relief to plaintiffs, the precise nature and amount of these damages are not

entirely clear. But viewing the translated Mexican judgment in the light most favorable

to plaintiffs, the amounts Darbun was required to pay to each plaintiff included: (1) 20

days' salary for each year worked; (2) three months' salary; (3) vacation pay for the years

1998, 1999 and a portion of vacation payment for the year 2000; (4) a vacation pay

bonus; (5) a seniority bonus; (6) payment equal to 30 days of each plaintiff's last salary;

and (7) payment of all unpaid salaries starting on May 9, 2000 until the day the judgment

is paid.

       With respect to the last category above, plaintiffs alleged: "Under Mexican Labor

Code, an employee is not deemed to have been effectively terminated until the employee

has been paid all back wages, sick pay and vacation pay. Accordingly, payroll continues

to accrue under Mexican law until the [judgment] is paid. Thus, the [judgment] continues

to grow at the rate of $16,996.12 Mexican pesos per day, representing the per diem wages

for each of the plaintiffs until such judgment is paid in full."

       Plaintiffs renewed the judgment in July 2008. In 2010, Darbun challenged the

validity of the Mexican judgment in the Mexican court system, "claiming the statute of

limitations had run on the judgment due to an alleged 'conspiracy' between the plaintiffs

and the Mexican Labor Relations Board. . . ." Plaintiffs allege that this challenge was

rejected, and all appeals have been finally resolved in favor of plaintiffs and against

Darbun.

                                               4
       Plaintiffs first sought to enforce the Mexican judgment in this country by filing an

action in federal court, but that action was dismissed after the grounds for diversity

jurisdiction were eliminated. (See Plata v. Darbun Enterprises, Inc. (S.D. Cal. 2011)

2011 WL 98405, p. *1.) Several months later, in October 2011, plaintiffs filed their

superior court complaint alleging a single cause of action under the Foreign-Country

Judgments Act. Plaintiffs alleged the Mexican judgment "grants a sum of money" and is

"final, conclusive and enforceable" under Mexican law, and the judgment satisfies all

statutory criteria, including that the Mexican court had personal jurisdiction over Darbun,

the proceeding was before a "fair tribunal," and Darbun appeared with legal counsel and

presented evidence in its defense. According to plaintiffs, the amount of the Mexican

judgment (including the per diem charge) as of October 1, 2011 is $58,333,994.17

Mexican pesos, and in United States dollars that amount is approximately $4.2 million.

                                         Demurrer

       Darbun filed a demurrer on the sole ground that "the judgment shows on its face

that it is for a penalty and therefore cannot be recognized under California law." Darbun

acknowledged that the Mexican judgment indicates Darbun was legally responsible for

the "rescission" of plaintiffs' employment and that plaintiffs were unpaid for work

performed from April 28, 2000 to May 9, 2000. But Darbun claimed the Labor Relations

Board "did not find that Plaintiffs were owed any 'back wages' " and "did not award a

single peso for work performed by Plaintiffs for which they were not paid." Darbun also

asserted that the bulk of the monetary award serves only to penalize it for failing to pay

the judgment.

                                             5
       In support, Darbun submitted copies of several translated Mexican statutes. Of

relevance, these statutes: (1) state a wrongfully terminated worker is entitled to be

reinstated or "be given severance pay in the amount of three months of wages"; (2) set

forth the amount and circumstances under which a worker is entitled to vacation pay and

bonuses; and (3) state that if the employer does not prove the cause of termination at trial,

the employee "shall be entitled, additionally, regardless of what the attempted action had

been, to be paid the due wages from the date of termination until the time the judgment is

fulfilled." (Italics added.) Darbun cited to Mexican Amended Federal Labor Law

sections 48, 49, 50, 76, 80, 87.

       In opposition, plaintiffs argued that their pleadings show they sought and

recovered compensatory damages, and not merely "penalt[ies]." They relied on their

allegations that in the underlying Mexican action they sought " 'back wages' due upon

termination . . . .' " They also identified portions of the Mexican judgment that "set forth

seniority bonuses, lunch breaks, vacation pay, sick pay, and unpaid profit sharing

required by the terms of employment that was required to be paid but was not." They

further noted that the Mexican judgment "recites that the plaintiffs worked from April 28

through May 9 without being paid." Plaintiffs thus urged the court to overrule the

demurrer because "at least a part of the judgment compensates" them for unpaid actual

wages and other losses resulting from Darbun's improper conduct.

       After a hearing, the court sustained the demurrer without leave to amend,

concluding that "as a matter of law . . . the judgment constitutes an unenforceable penalty

under" California's Foreign-Country Judgments Act.

                                             6
                                      DISCUSSION

                                    I. Review Standard

         On appeal from a judgment dismissing an action after sustaining a demurrer

without leave to amend, the "reviewing court gives the complaint a reasonable

interpretation, and treats the demurrer as admitting all material facts properly pleaded.

[Citations.] The court does not, however, assume the truth of contentions, deductions or

conclusions of law. [Citation.] The judgment must be affirmed 'if any one of the several

grounds of demurrer is well taken. [Citations.]' [Citation.] However, it is error for a trial

court to sustain a demurrer when the plaintiff has stated a cause of action under any

possible legal theory. [Citation.] And it is an abuse of discretion to sustain a demurrer

without leave to amend if the plaintiff shows there is a reasonable possibility any defect

identified by the defendant can be cured by amendment." (Aubry v. Tri-City Hospital

Dist. (1992) 2 Cal. 4th 962, 967.) We apply a de novo standard in reviewing the court's

ruling sustaining the demurrer. (Lazar v. Hertz Corp. (1999) 69 Cal. App. 4th 1494,

1501.)

                      II. California's Foreign-Country Judgments Act

         Foreign country money judgments are enforceable in California if they meet the

requirements of the Foreign-Country Judgments Act. (§ 1716, subd. (a).) The Act

applies to all actions filed on or after January 1, 2008, and was modeled on the 2005

Uniform Foreign–Country Money Judgments Recognition Act (2005 Uniform Act). (See

Manco Contracting Co. (W.L.L.) v. Bezdikian (2008) 45 Cal. 4th 192, 198 (Manco

Contracting); In re Marriage of Lyustiger (2009) 177 Cal. App. 4th 1367, 1369-1370.) In

                                             7
2007, the Legislature enacted the Foreign-Country Judgments Act to replace a prior

uniform act. (See Manco Contracting, supra, at p. 204; Lyustiger, supra, at p. 1370.)

       A party seeking recognition of a foreign judgment under the Act must file a civil

action, and the procedures applicable to any civil action apply, including the need to

prove disputed factual allegations at a trial. (Hyundai Securities Co., Ltd. v. Lee (2013)

215 Cal. App. 4th 682, 689-690.) The fact that a foreign judgment is based on laws

different from, or in conflict with, California law is not a basis for refusing to enforce the

foreign judgment. (Java Oil Ltd. v. Sullivan (2008) 168 Cal. App. 4th 1178, 1192 (Java

Oil.) The purpose of the foreign-judgment enforcement statutes "is to codify the most

prevalent common law rules for recognizing foreign money judgments and thereby

encourage the reciprocal recognition of United States judgments in other countries.

[Citation.] . . . Drafters of the uniform act believed codification of uniform rules would

satisfy foreign reciprocity concerns and encourage greater recognition and enforcement

of American judgments abroad. [Citations.]" (Manco Contracting, supra, 45 Cal.4th at

p. 198.)

       Under the Foreign-Country Judgments Act, a court "shall recognize a foreign-

country judgment to which this chapter applies." (§ 1716, subd. (a).) Section 1715

provides that the chapter applies to all foreign money judgments that are "final,

conclusive, and enforceable," except for three categories of excluded judgments.

(§ 1715, subds. (a), (b).) On these three categories, the Act states: "This chapter does not

apply to a foreign-country judgment . . . to the extent that the judgment is any of the

                                              8
following: [¶] (1) A judgment for taxes. [¶] (2) A fine or other penalty. [¶] (3) [A

judgment pertaining to divorce, support, or maintenance]." (§ 1715, subd. (b).)

       A party seeking to enforce a foreign judgment has the burden to show the chapter

applies to the judgment, including that the judgment does not fall within the excluded

categories. (§ 1715, subd. (c).) Once that burden is met, the presumption in favor of

enforcement applies, and the burden shifts to the opposing party to show a mandatory or

discretionary ground for nonrecognition under section 1716. (§ 1716, subd. (d).) These

nonrecognition grounds include that the judgment was not rendered before an impartial

tribunal, the foreign tribunal had no personal or subject matter jurisdiction, the judgment

was obtained by fraud, and the judgment is "repugnant" to a state or federal public policy.

(§ 1716, subds. (b), (c).)

       The only issue before us is whether the Mexican judgment is an excluded

judgment because it is a "fine or other penalty." (§ 1715, subd. (b)(2).) A California

Court of Appeal recently provided guidance on the meaning of a "penalty" under the

foreign judgment enforcement statutes.4 (Java Oil, supra, 168 Cal.App.4th at pp. 1186-

1189.) The Java Oil court explained that a "penalty" under these statutes has a particular

meaning " 'in the international sense' " and this meaning was established long ago by the

United States Supreme Court in Huntington v. Attrill (1892) 146 U.S. 657, 673-674

(Huntington). (Java Oil, supra, at p. 1187.) Quoting Huntington, the Java Oil court

4      Although Java Oil interpreted the former act's penalty provision, the penalty
provision in both statutes is similar and it appears no change in meaning was intended.
(See former § 1713.1, subd. (2).)

                                             9
stated the question whether a statute is a " 'penal law . . . so that it cannot be enforced in

the courts of another State, depends upon the question whether its purpose is to punish an

offense against the public justice of the State, or to afford a private remedy to a person

injured by the wrongful act.' " (Java Oil, supra, at p. 1187.) " 'The test is . . . whether . . .

[the judgment's] essential character and effect . . . [is] a punishment of an offence against

the public, or a grant of a civil right to a private person.' " (Ibid.) Thus, " ' "[a] statute is

penal . . . [if it] awards a penalty to the state, or to a public officer in its behalf, or to a

member of the public, suing in the interest of the whole community to redress a public

wrong. . . . The purpose must be not reparation to one aggrieved, but vindication of the

public justice." ' " (Ibid.)

       The Java Oil court noted that the Huntington test has been followed by the

California Supreme Court (Miller v. Municipal Court (1943) 22 Cal. 2d 818, 837)5, and

that "treble damages, double damages, and minimum fines [have been] considered

penalties" in California. (Java Oil, supra, 168 Cal.App.4th at pp. 1187-1188.) The Java

Oil court additionally discussed the Restatement definition and found it similar to the

Huntington definition. (Java Oil, supra, at p. 1188; see Rest.3d Foreign Relations Law

of the U.S., § 483, com. b, p. 611.) Applying these definitions, the Java Oil court held

that attorney fee awards in two Gibraltar money judgments were not penalties under the

5     Miller is not directly applicable because it did not arise in the context of a foreign-
country judgment.

                                                10
foreign judgment enforcement statutes. (Java Oil, supra, 168 Cal.App.4th at pp. 1188-

1189.)

         Java Oil's analysis is consistent with the understanding of the drafters of the 2005

Uniform Act, which was adopted in full by the California Legislature. In their comments

to this model uniform act, the drafters stated: "Courts generally hold that the test for

whether a judgment is a fine or penalty is determined by whether its purpose is remedial

in nature, with its benefits accruing to private individuals, or it is penal in nature,

punishing an offense against public justice." (Official Comments on U. Foreign-Country

Money Judgments Recognition Act (2005 ed.) foll. § 3, p. 7, com. 4.)6

         Accordingly, the issue whether a monetary award is a penalty within the meaning

of the Foreign-Country Judgments Act requires a court to focus on the legislative purpose

of the law underlying the foreign judgment. A judgment is a penalty even if it awards

monetary damages to a private individual if the judgment seeks to redress a public wrong

and vindicate the public justice, as opposed to affording a private remedy to a person

injured by the wrongful act.

                                         III. Analysis

         Applying the forgoing legal principles, we agree with the trial court that the

portion of the judgment that requires Darbun to pay each worker's daily wages from the

6      On our own motion, we take judicial notice of the prefatory note and comments by
the National Conference of Commissioners on Uniform State Laws regarding the 2005
Uniform Act. This authority is available at
 (as of Jan. 29, 2014).
                                               11
date of their improper termination until Darbun pays the judgment is a "penalty" under

section 1715, subdivision (b)(2). Although these amounts are to be paid to the workers,

rather than the state, these amounts cannot be reasonably interpreted to be remedial under

any sense of the word, i.e., intended as compensation to the workers for lost wages or

other employment benefits. Instead, this award seeks to vindicate the public justice and

constitutes a punishment (a fine or penalty) for Darbun's failure to comply with the Labor

Relations Board mandates. The portion of the judgment in which Darbun must continue

to pay plaintiffs' salaries, infinitely accruing at a daily rate, can only be reasonably

interpreted as a fine or penalty for nonpayment of the amounts ordered. (See Lab. Code,

§ 203 ["penalty" imposed for willful failure to pay wages].)

       We reject plaintiffs' argument that this portion of the judgment is not a penalty

because "lost future wages" can be a component of compensatory economic damages

under California law. (See Helmer v. Bingham Toyota Isuzu (2005) 129 Cal. App. 4th
1121, 1129-1131.) In Helmer, the court held an employee was entitled to recover future

lost income damages on a promissory fraud claim because these damages "may properly

be considered as part of the 'benefit of the bargain.' " (Id. at p. 1130.) The court

explained that the defendant "employer 'bargained' to obtain an employee who already

had steady employment with another company. It is only fair to compensate the

employee for the damages he suffered as a result of leaving that steady employment."

(Id. at pp. 1130-1131.)

       Even assuming we look to California law on this issue, Helmer is inapposite.

Darbun was ordered to pay the daily wages of the workers until it fully satisfied the

                                              12
Mexican judgment without any reference or proof of each worker's individual situation or

future losses. This monetary award was ordered under Mexican law that permits the

imposition of these monetary amounts until a judgment is satisfied regardless of the

employee's situation. Thus, in this case, there is no basis for finding the monetary award

was to compensate plaintiffs for "lost future wages" or as part of the "benefit of the

bargain." Unlike Helmer, there were no facts showing a relationship between this

monetary award and plaintiffs' losses to indicate the amounts were intended as a private

remedy.

       However, we agree with plaintiffs that they have alleged sufficient facts showing

at least a portion of the judgment was intended to be compensation for lost wages and

benefits, rather than a penalty to vindicate " 'the public justice.' " (Java Oil, supra, 168

Cal.App.4th at p. 1187.) The complaint's allegations, together with the attached Mexican

judgment, support that Darbun was ordered to pay various amounts to compensate

plaintiffs for its responsibility in causing the "rescission" of the employment

"relationship," including vacation pay, holiday pay, and vacation and seniority bonuses.

Some of these awarded amounts were calculated based on each plaintiff's seniority and

some were awarded based on the provisions of the plaintiffs' employment contracts.

These alleged facts support that the amounts awarded were intended to compensate

plaintiffs for damages suffered, rather than as a penalty unrelated to compensation and for

the purpose of punishment. Although it appears that the plaintiffs suffered unpaid

monetary wages for only a very brief period, the Mexican judgment does not necessarily

support that these were the only benefits allegedly lost as a result of Darbun's claimed

                                              13
wrongful conduct. (See Boothby v. Atlas Mechanical, Inc. (1992) 6 Cal. App. 4th 1595,

1600-1601 [vested vacation time is a form of wage]; Grant-Burton v. Covenant Care,

Inc. (2002) 99 Cal. App. 4th 1361, 1376 [bonuses earned by an employee may constitute

wages].)

       Darbun argues that even assuming a portion of the Mexican judgment constitutes

compensation rather than a penalty, a California court may not enforce a foreign

judgment if any part of the judgment is a penalty. This argument is unsupported.

       Section 1715, subdivision (b)(2) provides: "This chapter does not apply to a

foreign-country judgment, even if the judgment grants or denies recovery of a sum of

money, to the extent that the judgment is any of the following: [¶] . . . [¶] . . . A fine or

other penalty." (Italics added.) The phrase "to the extent" plainly suggests that the bar on

enforcing judgments applies only to the portion of the judgment constituting a prohibited

category. Darbun contends this interpretation would be appropriate solely if the drafters

had used the phrase "only to the extent that." This argument is unsound.

       The word "extent" refers to "the range over which something extends" (Webster's

11th Collegiate Dict. (2006) p. 443), and the phrase "to the extent" has a similar limiting

connotation, i.e., applying only to the particular identified subject matter. (See In re

Sprint Corp. ERISA Litigation (D.Kan. 2004) 388 F. Supp. 2d 1207, 1218-1219; In re

Duvall (Bankr. W.D.Tx. 2002) 218 B.R. 1008, 1016.) Thus, contrary to Darbun's

contention, it is unnecessary to add the word "only" to convey an intent to provide a

limited application. Under its plain meaning, the phrase "to the extent" in section 1715,

subdivision (b) refers to the limited scope of the statutory exceptions, and establishes that

                                              14
a foreign judgment can be partially enforced with respect to compensatory damages that

do not constitute a penalty or fine.

       The drafters' comments to the 2005 Uniform Act support this interpretation. In the

comments following the exception categories (such as the fine/penalty exception), the

drafters stated: "[A] foreign-country money judgment is not within the scope of this Act

'to the extent' that it comes within one of the excluded categories. Therefore, if a foreign-

country money judgment is only partially within one of the excluded categories, the non-

excluded portion will be subject to this Act." (Official Comments on U. Foreign-Country

Money Judgments Recognition Act, supra, foll. § 3, p. 7, com. 5, italics added.) Because

the California Legislature adopted the same "to the extent" language without modification

and because a primary purpose of adopting the 2005 Uniform Act was to ensure and

promote uniformity of the foreign judgment enforcement law "among states that enact it,"

we necessarily presume the California Legislature had the same intent. (§ 1722.)

       This conclusion also comports with common sense. Assume two judgments each

award the same amount of compensatory damages but one additionally awards a penalty.

Under Darbun's proposed interpretation, the compensatory-only judgment could be fully

enforced whereas the judgment awarding the same compensatory damages and a separate

penalty could not be enforced. In this scenario, a plaintiff would not be entitled to

enforce a judgment merely by virtue of having established more egregious behavior that

warranted a penalty in addition to compensatory damages. We cannot conclude the

California Legislature would have intended this result.

                                             15
       Darbun contends a court cannot partially enforce a foreign country judgment

because a court's authority under the Act is limited to issuing a single order enforcing the

judgment or not enforcing the judgment. In support, Darbun cites section 1719 which

provides that if a foreign-country judgment is entitled to recognition, it is generally

"[e]nforceable in the same manner and to the same extent as a judgment rendered in this

state." In light of the more direct language contained in section 1715, subdivision (b) and

the explicit legislative history disclosing the drafters' intent to permit partial enforcement,

we find Darbun's reliance on section 1719 to be unpersuasive.

                              IV. Federal Court Proceedings

       Because both parties discuss the earlier federal court litigation, and attempt to use

various federal court rulings to their advantage, we briefly summarize this litigation and

then explain our conclusion that the federal court rulings—while informative—are not

binding on this court.

       Plaintiffs initially filed their enforcement action against Darbun in federal court

based on diversity jurisdiction arising from plaintiffs' Mexican nationalities. (Plata v.

Darbun Enterprises, Inc. (S.D.Cal. 2009) 2009 WL 975233.) Darbun then moved to

dismiss the complaint on various grounds, including that the judgment was an

unenforceable "penalty" under California's Foreign-Country Judgments Act. (Plata,

supra, 2009 WL 975233.) The district court rejected the claim at the pleadings stage.

(Ibid.) The district court held: "In order to prevail at this stage of the proceedings,

Defendant must demonstrate based upon the pleadings and matters properly before the

Court that every part of the Mexican Judgment constitutes a 'penalty' which is

                                              16
unenforceable under [section] 1715(b)(2). At this stage of the proceedings, the Court

finds there are factual questions regarding the nature of the Judgment which precludes

dismissal of the case . . . ." (Ibid.)

       Several months later, the federal court denied plaintiffs' motion to attach Darbun's

corporate property, finding plaintiffs did not submit sufficient facts establishing " 'the

probable validity' " of their claim. (Plata v. Darbun Enterprises, Inc. (S.D.Cal. 2009)

2009 WL 3153747, p. *4; see § 484.090.) In so ruling, the court stated: "Given the lack

of information regarding the nature of the Mexican Judgment, the court cannot determine

as a matter of law whether the damages constitute a penalty. Crucially, it is unclear

whether the Judgment served to punish Defendant or to compensate Plaintiff for harm

incurred." (Ibid.) However, the court additionally discussed that various portions of the

judgment appear to award a penalty rather than compensation for lost wages, particularly

the portion of the judgment ordering that Darbun pay plaintiffs' salaries until it fully

satisfies the entire judgment. (Ibid.)

       Subsequently, the federal district court dismissed the federal action after learning

that one of the 18 plaintiffs was a California resident and her presence in the action

"destroyed diversity for jurisdictional purposes." (Plata v. Darbun Enterprises, Inc.

(S.D.Cal. 2011) 2011 WL 98405, p. *1.) The court also rejected plaintiffs' later attempt

to refile the action without including all necessary parties. (Ibid.)

       Both parties rely on the collateral estoppel doctrine to argue for a preclusive effect

as to certain of these rulings. This doctrine is inapplicable on the record before us. The

court never reached a final ruling on the merits, and the issues in the federal litigation

                                              17
were not identical to the issues in this case. These missing elements preclude the

application of collateral estoppel in this case. (See Lucido v. Superior Court (1990) 51
Cal. 3d 335, 341; Henderson v. Newport-Mesa Unified School Dist. (2013) 214
Cal. App. 4th 478, 503.)

                                     DISPOSITION

       Judgment reversed. The parties to bear their own costs on appeal.

                                                                              HALLER, J.

WE CONCUR:

NARES, Acting P. J.

O'ROURKE, J.

                                            18