Falk v. Children's Hosp. L.A.

• Court: California Court of Appeals
• Writing for the Court: ALDRICH, J.
• Citation: Falk v. Children's Hosp. L.A., 237 Cal.App.4th 1454, 188 Cal.Rptr.3d 686 (Cal. App. 2015)
• Decision Date: 03 June 2015
• Docket Number: B251182
• Parties: Michelle FALK, Plaintiff and Appellant, v. CHILDREN'S HOSPITAL LOS ANGELES, Defendant and Respondent.

237 Cal.App.4th 1454

188 Cal.Rptr.3d 686

Michelle FALK, Plaintiff and Appellant

v.CHILDREN'S HOSPITAL LOS ANGELES, Defendant and Respondent.

B251182

Court of Appeal, Second District, Division 3, California.

Filed June 3, 2015

The Gold Firm, Steven Bruce Gold, San Diego; Law Office of Joseph Antonelli, Joseph Antonelli, Janelle Carney and Jason Hatcher, Chino Hills, for Plaintiff and Appellant.

Sheppard, Mullin, Richter & Hampton, Derek R. Havel, Daniel J. McQueen, Marlene M. Nicolas, Matthew A. Tobias, Los Angeles; Ballard Rosenberg Golper & Savitt and Linda Miller Savitt, Glendale, for Defendant and Respondent.

ALDRICH, J.

INTRODUCTION

The trial court granted summary judgment in favor of defendant and respondent Children's Hospital Los Angeles (Children's Hospital or the hospital) and against plaintiff and appellant Michelle Falk on the ground her wage and labor claims were time-barred. The court rejected Falk's argument the filing of a prior class action tolled her limitations periods, under American Pipe & Construction Co. v. Utah (1974) 414 U.S. 538, 94 S.Ct. 756, 38 L.Ed.2d 713 (American Pipe ), which held that, under certain circumstances, the filing of a class action tolls a limitations period for class members who file subsequent actions. We find that American Pipe tolling applies to some of Falk's claims, but not to others. We therefore affirm in part and reverse in part the judgment.

BACKGROUND

I. The class action complaints.

Since May 2007, four class action complaints, including Falk's, have been filed against Children's Hospital raising wage and labor violations.

A. May 1, 2007: The Palazzolo class action¹

Children's Hospital employed Thomas Palazzolo from July 2005 to January 2007 as a nonexempt, hourly paid patient care service aide. On May 1, 2007, Palazzolo filed a class action complaint on behalf of “[a]ll nonexempt or hourly paid persons.” The complaint asserted these causes of action:

(1) Violation of Labor Code sections 510, 511, and 1198² for unpaid overtime: plaintiff and class members worked more than eight hours per day, 12 hours per day or 40 hours per week without overtime compensation. “[I]ncentives in the form of shift differentials” were not incorporated in overtime.

(2) Violation of sections 201 and 202 for failure to pay wages upon termination: the hospital failed to pay earned and unearned wages at the time of discharge or within 72 hours of an employee leaving.

(3) Violation of section 204 for failure to pay wages: the hospital failed to pay wages on regular paydays.

(4) Violation of sections 226.7, subdivision (b), and 512, subdivision (a), for denial of meal periods: plaintiffs were required to work without meal periods and were not compensated for work performed during meal periods.

(5) Violation of section 226.7, subdivision (b), for denial of rest periods: plaintiffs were required to work without compensation during rest periods.

(6) Violation of section 226, subdivision (a), for improper wage statements: the hospital failed to provide “complete and accurate wage statements that include” the “total number of hours worked” and employees' Social Security numbers.

(7) Violation of section 221 seeking repayment of wages to employer: the hospital deducted from wages “parking fees and ID deposits” without obtaining prior written authorization.

(8) Violation of section 2802 seeking indemnification for employee's expenses: the hospital failed to reimburse “necessary business-related expenses,” including parking fees and ID deposits. “Specifically, [the hospital] had, and continue[s] to have, a policy and practice of requiring employees ... to pay for parking fees and ID deposits out of their own funds” and not reimbursing them.

(9) Conversion and theft of labor: the hospital refused to pay wages due on the next payday after wages were earned.

(10) Violation of the unfair competition law (Bus. & Prof.Code, § 17200 et seq. ).

Summary judgment was entered in the hospital's favor on April 7, 2009. The trial court ruled on the merits that there were no triable issues of material fact. Class claims and class certification were never addressed.

We affirmed the judgment. (Palazzolo v. Children's Hospital of Los Angeles (Dec. 1, 2010, B216508) 2010 WL 4869755 [nonpub. opn.].) Class certification was also not raised or addressed in the appeal. The remittitur issued on February 3, 2011.

B. January 27, 2012: The Mays class action.³

Denise Mays, a registered nurse, worked for Children's Hospital as a “nonexempt hourly employee.” She began working for the hospital in September 2008, and her employment ended May 31, 2012.

Mays's operative class action complaint⁴ alleged these causes of action against the hospital:

(1) Recovery of unpaid wages (§§ 204, 206, 218, 226, 510, 511, 1194, 1198 ): the hospital, as a matter of policy, scheduled nonexempt hourly employees to work in excess of eight hours per day and/or in excess of 40 hours per pay week, without paying overtime compensation. The hospital failed to pay “all wages earned, including minimum wages, straight time pay, overtime, and remuneration when calculating the hourly non-exempt employees regular rate of pay... .” The hospital, specifically, employed a “two rate system” in paying its hourly non-exempt employees who were regularly scheduled to work 12-hour shifts: 12-hour shift, nonexempt employees who worked overtime were paid a “lower ‘standard wage,’ or ‘straight time wage,’ or ‘base pay wage,’ while employees who did not work overtime were paid the correct wage.⁵ As to the “regular rate,” the hospital failed to include compensation for “non-discretionary bonus, charge nurse premium, shift differential premium, preceptor pay and other types of remuneration.”

(2) Violation of Business and Professions Code section 17200.

(3) Failure to pay wages upon separation from employment (§ 200 et seq.): the hospital's final paychecks failed to include all pay owed, including penalties for each day the employee was paid late.

(4) Failure to allow rest periods (§ 226.7): the hospital has a policy of discouraging nonexempt employees from taking a rest break for any work period greater than two hours and up to four hours.

(5) Failure to allow meal periods (§ 226.7): the hospital failed to provide and discouraged legally compliant meal periods. Employees were required to carry pagers and to answer them while on breaks. The hospital required employees to punch in and out for meal periods, regardless of whether the meal period was taken.

(6) Failure to provide proper wage statements (§ 226 ): the hospital failed to provide the class with an itemized wage statement that included total hours worked, net wages earned, and all applicable hourly rates and the corresponding number of hours worked.

(7) Recovery of unpaid wages and penalties (§§ 221, 223, 224): the hospital had a “practice of paying each employee a differing hourly rate of pay that varies depending solely on the number of hours worked by the employee who is regularly scheduled to work 12 hours in a day.” This “retention operates as a ‘kickback’ ” to the hospital.

(8) Labor Code Private Attorneys General Act of 2004 (§§ 2698–2699).

In Mays, Children's Hospital filed a form notice of related case to Palazzolo.⁶

C. December 3, 2012: The Falk class action.

Falk worked at Children's Hospital from March 6, 2006 to August 25, 2006 as a licensed vocational nurse. Falk's class action alleged these causes of action, substantively identical to Mays, against the hospital:⁷

(1) Failure to reimburse for business expenses (§ 2802): Falk was not reimbursed for work related expenses, such as parking at the facility.

(2) Injunctive and declaratory relief and restitution (Bus. & Prof.Code, § 17200 ).

(3) Recovery of unpaid wages and penalties (§§ 204, 206, 218, 226, 510, 511, 1194, 1198 ): the hospital failed to pay all wages earned, including minimum wages, straight time pay, overtime, and remuneration.

(4) Failure to provide proper wage statements (§ 226 ).

(5) Failure to allow meal periods (§§ 226.7, 512).

(6) Failure to allow rest periods (§§ 226.7, 512).

(7) Failure to pay wages upon separation from employment (§ 200 et seq.).

D. January 24, 2013: The Schmidt action⁸

On January 24, 2013, Joseph Schmidt filed a class action for, among other things, Labor Code violations against Children's Hospital.⁹

II. Children's Hospital moves for summary adjudication and judgment.¹⁰

A. The motion for summary judgment.

Before class certification was decided, the hospital moved for summary judgment on the ground that the statutes of limitations applicable to Falk were not tolled by Palazzolo or Mays. The hospital argued that American Pipe tolling did not apply to Falk's claims because the judgment in Palazzolo was the equivalent of an adverse ruling on the substantive merits of the class; American Pipe tolling applies only to individual actions and not to successive class actions; and Palazzolo did not place the hospital on notice of Falk's dual rate wage claims and highly specific meal and rest period claims.

Falk responded that Palazzolo tolled her claims; the hospital was judicially estopped from arguing that Falk was unrelated to Mays and Palazzolo ; and the statutes of limitations should be equitably tolled.

It was undisputed that the trial and appellate courts in Palazzolo never addressed class certification.

B. The trial court's ruling.

The trial court granted summary judgment against Falk on July 3, 2013. Judgment was entered on July 15, 2013. The court found American Pipe tolling inapplicable because judgment in Palazzolo was on the ground the individual plaintiff had no viable causes of action. The court also rejected the notion that American Pipe permits “piggybacking” of successive class actions. Even if American Pipe applied, the court found that Palazzolo did not put the hospital on notice of the “esoteric ‘dual rate’ ” claim raised by Falk.¹¹

DISCUSSION

I. Standard of review.

We independently review the trial court's order granting summary judgment and...