El Monte Rents, Inc. v. Group
| Decision Date | 17 May 2016 |
| Docket Number | B256665,B262566 |
| Parties | EL MONTE RENTS, INC., Plaintiff and Appellant, v. AEQUITAS LAW GROUP et al., Defendants and Appellants; CANLAS LAW GROUP et al., Defendants and Respondents. EL MONTE RENTS, INC., Plaintiff and Appellant, v. CANLAS LAW GROUP et al., Defendants and Respondents. |
| Court | California Court of Appeals Court of Appeals |
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Los Angeles County Super. Ct. No. BC526979)
APPEALS from orders of the Superior Court of Los Angeles County, Mary H. Strobel, Judge. Affirmed.
Law Office of Jeff Augustini, Jeff Augustini; Law Office of Peter Sloan and Peter Sloan for Plaintiff and Appellant.
Robie & Matthai, Edith R. Matthai, Klye Kveton and Natalie A. Kouyoumdjian for Defendants and Appellants.
Nemecek & Cole, Michael McCarthy and Mark Schaeffer for Defendants and Respondents.
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Gustavo Villalpondo and Jessie Yanez filed class and collective actions against their employer, El Monte Rents, Inc. Villalpando was represented by attorneys in two law firms, Aequitas Law Group and Canlas Law Group. Yanez was represented by attorneys in the Aequitas firm only. The attorneys at Aequitas thought they had good claims, and wrote several letters to the attorneys for El Monte saying so. The attorneys for El Monte thought the claims were meritless, and wrote several letters not only saying so, but also threatening to sue for malicious prosecution. It turned out that the attorneys for El Monte had the better of the argument: El Monte ultimately prevailed in the actions.
The attorneys for El Monte subsequently followed through on their threats and filed a malicious prosecution action against Villalpondo, Yanez, the Aequitas firm and several of its attorneys, Ronald H. Bae, Joseph Cho, Travis Hodgkins, and Autumn Love (collectively Aequitas), and the Canlas firm and its principal, Christopher J. Canlas (collectively Canlas). Aequitas and Canlas filed separate special motions to strike the complaint under Code of Civil Procedure section 425.16. The trial court granted the motion by Canlas and awarded Canlas $48,602 in attorneys' fees, and denied the motion by Aequitas.
El Monte appeals the order granting Canlas's special motion to strike, arguing that the trial court erred in concluding that El Monte failed to satisfy its burden to show a probability of prevailing on the element of lack of probable cause. El Monte also challenges the amount of attorneys' fees the court awarded to Canlas. Aequitas appeals the order denying its special motion to strike, arguing that the trial court erred in concluding that El Monte satisfied its burden to show a probability of prevailing on the elements of lack of probable cause and malice. We affirm all of the trial court's orders.
El Monte rents and sells recreational vehicles. The company instituted a policy prohibiting employees from clocking in for work more than seven minutes before the beginning of their shift or clocking out more than seven minutes after the end of their shift, unless the company had authorized overtime. El Monte also rounded its employees' time entries to the nearest quarter hour. El Monte informed its employees that it would consider anyone who clocked in after the beginning of his or her shift tardy, and would consider anyone who clocked out before the end of his or her shift as having left early. El Monte stated that the purpose of this policy was to establish consistent timekeeping procedures and prevent unauthorized overtime.
El Monte also adopted a policy limiting the amount of vacation time its employees could accrue depending on their years of service. Employees with one year of service could accrue no more than 40 vacation hours, and employees with two to nine years of service could accrue no more than 96 vacation hours.
On August 23, 2010 Villalpando, represented by Aequitas and Canlas, filed a class action in state court against El Monte alleging various wage and hour violations and unfair competition under Business & Professions Code section 17200 (Villalpando v. El Monte Rents, Inc. (Super. Ct. L.A. County, No. BC444211) (the Villalpando action)). On January 11, 2013 the trial court granted El Monte's motion for judgment on the pleadings on some of the causes of action in the complaint and denied the motion on others. On April 2, 2013 the trial court denied the plaintiffs' motion for class certification of the remaining claims. The Villalpando action was still pending in state court when El Monte filed this action, and therefore it is not part of El Monte's malicious prosecution claim.
On August 12, 2011 Villalpando, represented by Aequitas, filed a collective action under the Fair Labor Standards Act (FLSA) (29 U.S.C. § 201 et seq.) in federal district court alleging that El Monte's policy of rounding employee time entries to the nearest quarter hour, together with its tardiness policy, resulted in the systematic undercompensation of employees (Villalpando v. El Monte Rents, Inc. (C.D. Cal., No. CV11-6652) (the federal action)).1 The complaint indicated that Canlas was "[a]dditional counsel" for the plaintiffs.
On May 7, 2012 Bae, one of the attorneys at Aequitas working on the case, sent a letter to the attorneys for El Monte requesting a settlement offer from El Monte by May 9, 2012, and threatening to file two additional class actions challenging El Monte's vacation accrual policy, with class representatives other than Villalpando, if El Monte did not settle the Villalpando action and the federal action. Bae stated in his letter, "If [El Monte] settles these cases now, it will be obtaining class-wide releases on all wage and hour claims from August 2006, thereby immunizing it from other lawsuits." Bae later identified Yanez as the named plaintiff in a new class action Aequitas intended to file alleging that El Monte's vacation policy imposed an unreasonable limit on the accrual of vacation time. On June 6, 2012 Jeff Augustini, an attorney for El Monte, responded to Bae in an email stating that Yanez had never reached the vacation accrual limit and therefore had suffered no damages as a result of the challenged policy. Augustini stated that El Monte had already produced Yanez's payroll records showing that there was no factual basis for such a claim by Yanez and that filing such an action would be malicious prosecution.2
El Monte moved for summary judgment in the federal action, arguing that the statute of limitations barred the claims of numerous plaintiffs, the company's rounding policy was neutral and complied with federal law, there was no evidence that El Monte had failed to pay any compensation due, and any nonpayment was de minimis. The plaintiffs opposed the motion, arguing, among other things, that El Monte's rounding policy together with its tardiness policy consistently undercompensated employees and that the shortfall was not de minimis. The plaintiffs argued that the court should consider each biweekly pay period in determining whether El Monte underpaid its employees, and that the court should not offset underpayments in some pay periods against overpaymentsin other pay periods. The parties refer to this method of calculating potential undercompensation as a per-pay-period calculation.
On November 9, 2012 the district court granted El Monte's motion for summary judgment. The court ruled that the statute of limitations barred the claims of 29 plaintiffs. The court stated that a rounding policy complies with FLSA if, on average, the policy does not result in underpayment, but a rounding policy that systematically undercompensates employees is unlawful. The court ruled that the plaintiffs had failed to present any evidence that El Monte required them to arrive at the office before their shifts began or to stay at the office after their shifts ended, and had presented no evidence that they engaged in work for which El Monte did not compensate them. The court noted that the plaintiffs had presented evidence that El Monte had informally reprimanded employees for tardiness, but stated that there was no evidence El Monte had formally disciplined employees. The court rejected the plaintiffs' argument that it should consider the impact of El Monte's rounding and tardiness policies per pay period rather than over a longer period of time, ruling that the plaintiffs had failed to cite any authority supporting their argument and had failed to respond to El Monte's evidence that, over longer periods of time, the impact was minimal.
On July 23, 2012 Yanez, represented by Aequitas, filed a second class action against El Monte in state court, alleging causes of action for (1) failure to pay vacation wages, (2) failure to timely pay wages due upon termination of employment, and (3) unfair competition (Yanez v. El Monte Rents, Inc. (Super. Ct. L.A. County, No. BC488743) (the Yanez action)). The claims in the Yanez action all related to El Monte's vacation policy, which the plaintiffs argued imposed an unreasonable limit on the accrual of vacation time.
El Monte demurred to the complaint, arguing that its vacation policy was "a 'no additional accrual policy' that is permissible as a matter of law." El Monte argued that the law did not require its accrual limit had to be "reasonable." El Monte also argued thatYanez had not alleged the company had required him to forfeit any accrued vacation time and, as a...
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