Mendoza v. Expert Janitorial Servs., LLC

• Decision Date: 28 October 2019
• Docket Number: No. 77948-6-I,77948-6-I
• Citation: 450 P.3d 1220
• Parties: Oscar MENDOZA, individually and as class representative, Appellant, v. EXPERT JANITORIAL SERVICES, LLC, Defendant, Fred Meyer Stores, Inc., Respondent.
• Court: Washington Court of Appeals

450 P.3d 1220

Oscar MENDOZA, individually and as class representative, Appellant,

v. EXPERT JANITORIAL SERVICES, LLC, Defendant,Fred Meyer Stores, Inc., Respondent.

No. 77948-6-I

Court of Appeals of Washington, Division 1.

FILED: October 28, 2019

David N. Mark, Beau C. Haynes, Washington Wage Claim Project, 810 3rd Ave. Ste. 500, Seattle, WA, 98104-1619, William Joel Rutzick, Schroeter Goldmark & Bender, 810 3rd Ave. Ste. 500, Seattle, WA, 98104-1657, for Appellant.

Susan Kathleen Stahlfeld, Tara O'hanlon, Miller Nash Graham & Dunn LLP, 2801 Alaskan Way Ste. 300, Pier 70, Seattle, WA, 98121-1128, for Respondent.

PUBLISHED OPINION

Dwyer, J.

¶ 1 A party has no ground to complain of unfairness when faced with a consequence of obtaining the relief it requested and received from the trial court. Here, having successfully obtained an order excluding Oscar Mendoza and 68 of his fellow janitors (the Mendoza janitors) from a prior class action lawsuit (Espinoza )—in which a group of janitors who worked in Fred Meyer Stores, Inc. retail facilities throughout the Puget Sound area sought to recover damages for violations of Washington’s Minimum Wage Act (MWA), chapter 49.46 RCW—Fred Meyer nevertheless seeks to avoid the consequences of its choice by barring the Mendoza janitors from pursuing this separate lawsuit.

¶ 2 Accepting Fred Meyer’s contention that the Mendoza janitors were virtually represented by the efforts of the class in Espinoza from which they were excluded, the trial court herein ruled that the Mendoza janitors were collaterally estopped from bringing their claims under the MWA against Fred Meyer. Because the Mendoza janitors attempted to join but were, at Fred Meyer’s urging, excluded by court order from the class in Espinoza, we hold both that the doctrine of virtual representation is not applicable to the Mendoza janitors and that application of collateral estoppel herein works an injustice. Fred Meyer must accept the consequences of its decision to successfully seek the exclusion of the Mendoza janitors from the Espinoza lawsuit. Accordingly, we reverse.

I

¶ 3 In Espinoza, a group of janitors who worked in Fred Meyer stores in the Puget Sound area between September 2011 and September 2014 filed suit alleging violations of the MWA by All American Janitorial LLC (AAJ), M.H. Janitorial LLC (MHJ), Expert Janitorial Services, LLC (Expert), and Fred Meyer. Fred Meyer contracted out its janitorial work to Expert who—in turn—subcontracted the work to AAJ and MHJ, who directly employed the Espinoza janitors.

¶ 4 In September 2015, after the Espinoza lawsuit was instituted but prior to the certification of the Espinoza class, Expert sent putative class members settlement agreements that offered compensation to those who released their claims against Expert and Fred Meyer. The Mendoza janitors are those who were a part of the putative class but accepted these settlement offers. Later, five of the Mendoza janitors submitted declarations in support of a request for relief seeking to include all of the Mendoza janitors as part of the class in Espinoza.¹

¶ 5 At the urging of Expert and Fred Meyer, the trial court, in its order certifying the class in Espinoza, excluded the Mendoza janitors because none of the class representatives had signed the proffered 2015 agreement and the trial court was concerned that their interests could conflict with the Mendoza janitors’ interests. The Mendoza janitors subsequently filed this lawsuit in August 2016, asserting many claims identical to those in Espinoza, but also including allegations relating to the validity of the 2015 settlement agreements.

¶ 6 The Espinoza lawsuit was tried in January and February 2017. Following trial, the trial court concluded that AAJ, MHJ, and Expert were liable for violations of the MWA. It also ruled that Fred Meyer was not the Espinoza janitors’ joint employer under the MWA and was therefore not liable to the janitors.

¶ 7 Shortly thereafter, the Espinoza and Mendoza janitors learned that Expert was financially unable to pay the wages owed. As a result of Expert’s financial difficulties, it settled with the Espinoza and Mendoza janitors for $720,000 in a settlement approved by the trial court.

¶ 8 Meanwhile, in July 2017, the trial court herein certified the class of Mendoza janitors. Fred Meyer then moved for summary judgment, asserting that the Mendoza janitors should be collaterally estopped—by the Espinoza ruling that Fred Meyer was not the janitors’ joint employer under the MWA—from bringing their claims against Fred Meyer under the MWA. The trial court agreed, concluding that the Mendoza janitors were collaterally estopped on the issue of Fred Meyer’s status as a joint employer under a theory of virtual representation. The Mendoza janitors appeal from the order dismissing their claims.

II

¶ 9 The Mendoza janitors contend that the trial court erred by dismissing their claims against Fred Meyer on summary judgment. This is so, the Mendoza janitors assert, because the trial court incorrectly concluded that collateral estoppel barred their MWA claims against Fred Meyer. According to the Mendoza janitors, the application of collateral estoppel to them was improper because they were not parties to, nor in privity with parties to, the Espinoza lawsuit, and because application of the equitable doctrine would work an injustice. We agree.

A

¶ 10 We review de novo a trial court’s grant of summary judgment. Greensun Grp., LLC v. City of Bellevue, 7 Wash. App. 2d 754, 767, 436 P.3d 397, review denied, 193 Wash.2d 1023, 448 P.3d 64 (2019). We affirm an order granting summary judgment only "if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law." Woods View II, LLC v. Kitsap County, 188 Wash. App. 1, 18, 352 P.3d 807 (2015). On review, we "conduct the same inquiry as the trial court and view all facts and their reasonable inferences in the light most favorable to the nonmoving party." Greensun Grp., 7 Wash. App. 2d at 767, 436 P.3d 397 (citing Pac. Nw. Shooting Park Ass’n v. City of Sequim, 158 Wash.2d 342, 350, 144 P.3d 276 (2006) ).

¶ 11 The doctrine of collateral estoppel applies when the following four factors are present: "(1) identical issues; (2) a final judgment on the merits; (3) the party against whom the plea is asserted must have been a party to or in privity with a party to the prior adjudication; and (4) application of the doctrine must not work an injustice on the party against whom the doctrine is to be applied." Malland v. Dep’t of Ret. Sys., 103 Wash.2d 484, 489, 694 P.2d 16 (1985). "Whether collateral estoppel applies to preclude relitigation of an issue is a question of law that we review de novo." Lemond v. Dep’t of Licensing, 143 Wash. App. 797, 803, 180 P.3d 829 (2008) (citing State v. Vasquez, 109 Wash. App. 310, 314, 34 P.3d 1255 (2001) ); accord Weaver v. City of Everett, No. 96189-1, slip op at 6, ––– Wash. ––––, ––––, 450 P.3d 177, 2019 WL 5251493 (Wash. Oct. 17, 2019), http://www.courts.wa.gov/opinions/pdf/961891.pdf.

B

¶ 12 The Mendoza janitors first contend that they were not parties to, nor were they in privity with parties to, the Espinoza lawsuit such that they should be collaterally estopped from asserting that Fred Meyer is their joint employer under the MWA. Fred Meyer concedes that the Mendoza janitors were not actual parties to the Espinoza lawsuit, but asserts that they nevertheless satisfy the party or party in privity requirement under the virtual representation doctrine. In. response, the Mendoza janitors assert that (1) the virtual representation doctrine is not applicable in the class action context when the party against whom the doctrine is applied attempted to join but was denied membership in the prior class action lawsuit, and (2) even if the doctrine was generally applicable to such cases it does not support the application of collateral estoppel to the Mendoza janitors’ claims.

¶ 13 Under Washington law, the virtual representation doctrine provides an exception to the collateral estoppel "requirement that one be a party or in privity with a party to the prior litigation." Hackler v. Hackler, 37 Wash. App. 791, 795, 683 P.2d 241 (1984) : accord Bacon v. Gardner, 38 Wash.2d 299, 229 P.2d 523 (1951) ; Briggs v. Madison, 195 Wash. 612, 82 P.2d 113 (1938) ; Howard v. Mortensen, 144 Wash. 661, 258 P. 853 (1927). This doctrine is applied cautiously so as to avoid unjustly depriving a nonparty of his or her day in court. Garcia v. Wilson, 63 Wash. App. 516, 520, 820 P.2d 964 (1991). To this end, we have previously identified four factors that courts should consider before applying the doctrine:

(1) "whether the nonparty in some way participated in the former adjudication, for instance as a witness," (2) "[t]he issue must have been fully and fairly litigated at the former adjudication," (3) "the evidence and testimony will be identical to that presented in the former adjudication," and (4) "there must be some sense that the separation of the suits was the product of some manipulation or tactical maneuvering, such as when the nonparty knowingly decline the opportunity to intervene but presents no valid reason for doing so."

Dillon v. Seattle Deposition Reporters, LLC, 179 Wash. App. 41, 66, 316 P.3d 1119 (2014) (alteration in original) (quoting Garcia, 63 Wash. App. at 521, 820 P.2d 964 ). A court may apply the virtual representation doctrine when a sufficient number of these factors are present to ensure that application of the doctrine is fair to the party against whom collateral estoppel is sought to be applied. Garcia, 63 Wash. App. at 521, 820 P.2d 964.

¶ 14 The Mendoza janitors assert that the virtual representation doctrine is not applicable to class action lawsuits. Because no Washington case authority directly addresses whether virtual representation may be applied in a case such as this to satisfy the third factor of the collateral estoppel formula, the Mendoza...