Audio Visual Servs. Grp., Inc. v. Superior Court of L.A. Cnty.
| Decision Date | 21 January 2015 |
| Docket Number | B256266 |
| Citation | 233 Cal.App.4th 481,182 Cal.Rptr.3d 748 |
| Parties | AUDIO VISUAL SERVICES GROUP, INC., Petitioner, v. The SUPERIOR COURT of Los Angeles County, Respondent; Juan Solares, Real Party in Interest. |
| Court | California Court of Appeals Court of Appeals |
Schiffer & Buus and Eric M. Schiffer, Costa Mesa, for Petitioner.
No appearance for Respondent.
Hadsell Stormer Richardson & Renick, Randy Renick, Cornelia Dai, Pasadena; Davis, Cowell & Bowe, Elizabeth Ann Lawrence, and Paul L. More, San Francisco, for Real Party in Interest.
Plaintiff Juan Solares seeks to represent a class of employees who are or were employed by Audio Visual Services Group, Inc., doing business as PSAV Presentation Services (PSAV), which provides audiovisual services to hotels within the Century Corridor Property Business Improvement District (Century Corridor PBID) adjacent to the Los Angeles International Airport (LAX). They allege that PSAV collects from customers a separately designated “service charge,” “delivery charge,” “facility charge,” “gratuity,” “administrative fee,” or other such charge that “customers might reasonably believe ... were for the class member/employees' services.” PSAV allegedly fails to pay the separately-designated charges it collects to its employees in violation of the Hotel Service Charge Reform Ordinance (Ordinance) in the Los Angeles Municipal Code. ( The failure of PSAV to pay these service charges to its employees is the basis for Solares's unfair competition law claim (UCL). (Bus. & Prof.Code, § 17200 et seq. )
In Garcia v. Four Points Sheraton LAX (2010) 188 Cal.App.4th 364, 115 Cal.Rptr.3d 685 (Garcia ), we upheld the Ordinance against a constitutional challenge by certain hotels in the Century Corridor PBID. As part of our constitutional analysis, we considered a vagueness challenge by the hotels to the provision of the Ordinance setting forth the hotel employers' responsibilities to pay service charges to hotel workers. (Id . at pp. 386–389, 115 Cal.Rptr.3d 685.)Garcia arose out of a class action brought by hotel banquet captains and servers, one of the specific classes of hotel workers who are entitled to be paid the service charge collected for their services as set forth in section 184.02 of the LAMC.
Here, we are presented with the issue of whether audiovisual workers are within the class of hotel workers entitled to be paid service charges pursuant to the Ordinance. The Ordinance was intended to benefit hotel workers who earn low hourly wages and traditionally relied on gratuities. These hotel workers saw a decrease in gratuities because hotel customers assumed the service charge would be paid to the service worker who actually performed the services. Thus, the Ordinance applies only to those hotel workers who would have received a gratuity for their services but for the imposition of a service charge that hotel customers believed was in lieu of a gratuity. Because the class action complaint does not allege that Solares and the class he seeks to represent are within the class of hotel workers who traditionally relied on gratuities, and no proposed amendment could cure this defect, the complaint fails to state a UCL claim based upon a violation of the Ordinance.
Accordingly, we grant PSAV's petition for writ of mandate and direct the trial court to reverse its order, which overruled PSAV's demurrer to the UCL cause of action.
In 2006, the City enacted the Ordinance to increase the compensation of service workers at LAX-area hotels. The Ordinance requires hotels within the Century Corridor PBID, with 50 or more guest rooms, and no collective bargaining agreement to pass along the entire service charge to the hotel workers who actually performed the services for which the charges are collected. (LAMC, § 184.00 et seq.)
As stated in the Ordinance, its purpose is to “improve the welfare of service workers at the LAX-area hotels by ensuring that they receive decent compensation for the work they perform.” (LAMC, § 184.00.) The Los Angeles City Council recognized that hotels adjacent to LAX reap significant economic benefits, including the highest occupancy rate of all Los Angeles hotels because of the proximity to the airport. (Ibid. ) These LAX-area hotels, however, failed to pay their workers a living wage, and because of the low hourly wages paid, service workers relied on gratuities. (Ibid .) Many service workers saw their incomes decline and reported a significant reduction in the gratuities they received from customers because LAX-area hotels instituted a practice of adding a mandatory service charge of “15% to 20% [to] the bill for banquets and other large group events.” (Ibid .) Hotel customers assumed these service charges were paid to the workers performing the service and therefore they reduced or eliminated gratuities they would otherwise have paid to service workers. (Ibid. ) While some hotels paid a portion of the service charges to workers who actually performed the services, other hotels retained the entire service charge. (Ibid .)
To address this problem, the city council enacted the Ordinance. (LAMC, § 184.00.) The hotel employers' responsibilities are set forth in section 184.02 of the Ordinance.
Section 184.02 of the LAMC states in pertinent part: “Service Charges shall not be retained by the Hotel Employer but shall be paid in the entirety by the Hotel Employer to the Hotel Worker(s) performing services for the customers from whom the Service Charges are collected.” 1 Service charges may not be paid to “supervisory or managerial employees,” and must be paid to “Hotel Worker(s) equitably and according to the services that are or appear to be related to the description of the amounts given by the hotel to the customers.” (LAMC, § 148.02, subd. A.) Service charges collected for banquets or catered meetings “shall be paid equally to the Hotel Workers who actually work the banquet or catered meeting”; service charges collected for room service “shall be paid to the Hotel Workers who actually deliver food and beverage associated with the charge”; and service charges collected for porterage services “shall be paid to the Hotel Workers who actually carry the baggage associated with the charge.” (Id. , § 184.02, subd. A.1-3.) This section does not apply to gratuities and tips left by customers for a hotel worker who actually performed the services.2 (LAMC, § 184.02, subd. B.)
Solares was employed by PSAV as an audiovisual technician from approximately June 1999 to October 2009 and was assigned to work at the Hilton Los Angeles Airport Hotel. Solares provided services to hotel customers for which PSAV collected a separately-designated charge.
Solares filed a class action complaint alleging PSAV provides services at LAX-area hotels within the Century Corridor PBID. PSAV is allegedly a hotel employer as defined under the Ordinance, collects a “service charge” on services it provides to hotel customers, and fails to pay the entire service charge to its employees who actually perform the services for which the service charges are collected.
The class action complaint alleges a violation of the Ordinance (first cause of action) and a UCL violation (second cause of action).
PSAV filed a demurrer to the class action complaint. PSAV argued the Ordinance was intended to protect the wages of “traditionally tipped hotel workers” and, therefore, did not apply to its employees. Moreover, any violation of the Ordinance was barred by the applicable statute of limitations.
Solares conceded the demurrer to the first cause of action, alleging a violation of the Ordinance, as the claim was barred by the applicable statute of limitations. Solares opposed the demurrer to the UCL claim, principally arguing that the plain language of the Ordinance did not limit its reach only to those hotel workers who traditionally received gratuities for their services. Although not pled, Solares (through counsel) asserted the complaint could be amended to allege that audiovisual technicians receive a gratuity for each banquet event at a hotel.3
Both parties submitted requests for judicial notice of legislative materials associated with drafting and enacting the Ordinance. The trial court took judicial notice of the legislative materials.
The trial court overruled the demurrer to the UCL claim, stating: “The Court agrees with plaintiff that an employee of [PSAV] may be a ‘hotel worker’ within the meaning of the ordinance because plaintiff performed his work inside a hotel routinely and the hotel incorporated [PSAV's] bill (including the ‘service charge’ element, so stated) into its master bill for meeting functions held at the hotel. For the same reason, [PSAV], may be a ‘hotel employer’ within the meaning of the ordinance.
“The Court also agrees with plaintiff that a ‘service charge,’ so described, comes within the reach of the ordinance as a ‘separately-designated amount ... collected by the Hotel Employer from customers that are for services by Hotel Workers,’ whether or not it is ‘described in such a way that customers might reasonably believe that the amounts are for those services, including but not limited to those charges designated on receipts under the term “service charge.” ’ The ordinance is plain on its face.... The Court does not agree with [PSAV's] approach to statutory interpretation.
“There may well be no equitable merit to plaintiff's case if this class of workers has historically served in positions where tips are rare or non-existent, but the City Council, for reasons good and sufficient to itself, has decided that hotels and hotel subcontractors who choose...
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