Moorer v. Noble L.A. Events, Inc.

• Decision Date: 11 February 2019
• Docket Number: B282631
• Citation: 244 Cal.Rptr.3d 219,32 Cal.App.5th 736
• Court: California Court of Appeals Court of Appeals
• Parties: David MOORER, Plaintiff and Appellant, v. NOBLE L.A. EVENTS, INC., Defendant and Respondent.

32 Cal.App.5th 736

244 Cal.Rptr.3d 219

David MOORER, Plaintiff and Appellant,

v.NOBLE L.A. EVENTS, INC., Defendant and Respondent.

B282631

Court of Appeal, Second District, Division 7, California.

Filed February 11, 2019

Pedersen Law, Neil Pedersen and Jamie Gottschalk-Hall, Irvine, for Plaintiff and Appellant.

No appearance for Defendant and Respondent.

FEUER, J.

David Moorer appeals from the March 23, 2017 order denying his request for entry of a default judgment against Noble L.A. Events, Inc. (Noble), and dismissing the case. The trial court denied Moorer’s request because Moorer refused to comply with the court’s order to distribute 25 percent of the penalties to be allocated under the Labor Code Private Attorney General Act of 2004 ( Lab. Code, § 2698 et seq. (PAGA) )¹ to the 23 aggrieved employees in a pro rata amount. Instead, Moorer allocated the entire 25 percent to himself. On appeal, Moorer contends a PAGA action is a qui tam action, and therefore, 25 percent of the civil penalties should be distributed to the aggrieved employee who brought the claim. Moorer’s position is contrary to the California Supreme Court’s rulings interpreting PAGA. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

From August 18, 2013 to late December 2014, Moorer was employed as a full-time security guard and "lobby ambassador" by Noble, which provides security services to other companies. He and other employees provided security services to Apex, The Theatre at Ace Hotel (Ace), and Black Entertainment Television, LLC (BET). On January 14, 2015 Moorer sent notices under PAGA to Noble, Apex, Ace, BET, and the Labor and Workforce Development Agency (LWDA), alleging violations of the Labor Code and Industrial Welfare Commission (IWC) wage order No. 4-2001 ( Cal. Code Regs., tit. 8, § 11040.).

On April 7, 2015 Moorer filed a complaint, as an individual and on behalf of all aggrieved employees, against Noble, Apex, Ace, and BET, alleging individual wage and hour and representative PAGA claims for violations of the Labor Code and IWC wage order No. 4. Noble filed an answer on June 24, 2015. On August 5, 2015 Moorer voluntarily dismissed Apex, Ace, and BET without prejudice.

Noble failed to respond to discovery that Moorer had served in February 2016. On March 24, 2016 Noble’s counsel filed an ex parte application to be relieved as counsel. The trial court granted the motion on March 25, and set an April 5 hearing on an order to show cause to strike Noble’s answer "if new counsel has not been retained." (Capitalization omitted.)

At the hearing on April 5, 2016, the trial court struck Noble’s answer and deemed Noble to be in default because it had not retained new counsel and, as a corporation, Noble was unable to represent itself. The trial court directed Moorer to file a first amended complaint because the complaint did not allege specific damage amounts owed by Noble to support entry of a judgment on Moorer’s wage and hour claims, as required by Code of Civil Procedure section 425.10, subdivision (a)(2). The court ordered Moorer to submit a default judgment package no later than June 10. The court set a June 21 hearing for an order to show cause regarding entry of a default judgment against Noble.

On April 22, 2016 Moorer filed a first amended complaint against Noble, alleging individual and representative PAGA claims for failure to provide and maintain accurate itemized wage statements and records (§§ 226, subd. (a), 1174 & 1198), failure to provide meal breaks and rest periods (§ 226.7), and failure to pay Moorer his wages upon termination (§ 203). Moorer also alleged Noble engaged in unlawful business practices in violation of Business and Professions Code section 17200 et seq.

On July 25, 2016 the court clerk entered a default against Noble on the first amended complaint. On the same day Moorer submitted a request for entry of a default judgment in the amount of $679,374.52, including $594,550.00 in PAGA penalties, $9,513.59 in penalties for Moorer’s individual claims, $8,675.34 in costs, and $66,635.59 in attorneys’ fees. The civil penalties under PAGA in the proposed judgment were calculated based on wage violations for 23 aggrieved employees during the period from April 7, 2014 to April 7, 2015.

The trial court rejected Moorer’s first three requests for entry of default judgment because of clerical errors in the proposed judgments. At the January 31, 2017 hearing the court denied a later request by Moorer because the proposed judgment "fail[ed] to account for the distribution requirements for PAGA penalties." Specifically, as the court explained, "[Moorer’s] proposed judgment seeks to give all penalties to [Moorer] making no reference to the 75% of PAGA penalties owed to LWDA. [¶] Furthermore, the judgment must also distribute the remaining 25% of the PAGA penalties to each of the 23 aggrieved employees, not just [Moorer]." According to Moorer’s counsel, at the January 31, 2017 hearing, the trial court continued the hearing to March 7, 2017, and stated Moorer "had ‘one last time’ to submit a correct default judgment package," but "did not indicate what measures it would take should it deny" the request.²

On March 23, 2017 the trial court held another hearing on Moorer’s request for entry of a default judgment. On that date Moorer filed a brief in support of his request. Moorer admitted in his brief the revised proposed judgment was only "in partial compliance" with the trial court’s January 31, 2017 ruling in that the judgment allocated penalties to the LWDA, but not other aggrieved employees. He acknowledged the trial court was correct "the LWDA is entitled to 75% of all PAGA penalties awarded." But Moorer contended the remaining 25 percent of the PAGA penalties should be distributed only to the named plaintiff bringing the PAGA action, not all aggrieved employees.

At the March 23 hearing, the trial court denied Moorer’s request for entry of a default judgment against Noble. The trial court explained in its written order: "[Moorer] seeks PAGA penalties in the amount of $594,550.00. [Moorer] has now made about eight attempts to obtain a default judgment against Noble LA. Each time the court denied the relief requested, the court provided plaintiff with specific reasons for the denial. Yet again, [Moorer] has failed to heed the court’s direction and follow the law. [This] time around, [Moorer’s] proposed judgment allocates the amount of PAGA penalties pursuant to the percentage mandated by Labor Code § 2699(i), but the judgment continues to improperly provide the entire 25% of the PAGA penalties sought to [Moorer] individually, rather than each of the 23 aggrieved employees in a pro-rata amount. [¶] Rather than amend the judgment to comply with the court’s order, [Moorer] now argues that the entire PAGA award should be allocated to [Moorer] only, despite clear and unambiguous language from the California Supreme Court: ‘The PAGA conforms to these traditional criteria, except that a portion of the penalty goes not only to the citizen bringing the suit but all employees affected by the Labor Code violation.’ ( Iskanian v. CLS Transp. Los Angeles, LLC (2014) 59 Cal.4th 348, 382 [173 Cal.Rptr.3d 289, 327 P.3d 129]...)" (Italics and boldface omitted.)

The trial court added, "Additionally, allowing [Moorer], whose individual claim amounts to only $9,513.59, to individually and personally recover $148,912.50 in PAGA penalties would run afoul of the purpose of PAGA and makes no sense under the PAGA scheme. ... [Citation.] To award [Moorer] roughly 14 times the amount to which he would be entitled clearly flies in the face of the intent not to benefit private parties." At the hearing, Moorer’s counsel stated Moorer did "not want another opportunity to submit an amended judgment package that compl[ied] with the court’s order," and the court dismissed the case.

Moorer timely appealed.³

DISCUSSION

A. Standard of Review

The interpretation of PAGA is an issue of law, which we review de novo. ( United Riggers & Erectors, Inc. v. Coast Iron & Steel Co. (2018) 4 Cal.5th 1082, 1089, 232 Cal.Rptr.3d 428, 416 P.3d 792 ; Weatherford v. City of San Rafael (2017) 2 Cal.5th 1241, 1247, 218 Cal.Rptr.3d 394, 395 P.3d 274.) "Our role in interpreting statutes is to ascertain and effectuate the intended legislative purpose. [Citations.] We begin with the text, construing words in their broader statutory context and, where possible, harmonizing provisions concerning the same subject. [Citations.] If this contextual reading of the statute’s language reveals no ambiguity, we need not refer to extrinsic sources." ( United Riggers , at p. 1089, 232 Cal.Rptr.3d 428, 416 P.3d 792 ; accord, 926 North Ardmore Ave., LLC v. County of Los Angeles (2017) 3 Cal.5th 319, 328, 219 Cal.Rptr.3d 695, 396 P.3d 1036.)

B. PAGA Civil Penalties Must Be Distributed to All Aggrieved Employees

In 2003 the Legislature enacted PAGA "to allow aggrieved employees, acting as private attorneys general, to recover civil penalties for Labor Code violations, with the understanding that labor law enforcement agencies were to retain primacy over private enforcement efforts." ( Arias v. Superior Court (2009) 46 Cal.4th 969, 980, 95 Cal.Rptr.3d 588, 209 P.3d 923 ( Arias ); accord, Mendoza v. Nordstrom, Inc. (2017) 2 Cal.5th 1074, 1079, fn. 5, 216 Cal.Rptr.3d 889, 393 P.3d 375 ["PAGA authorizes an aggrieved employee to bring suit for specified Labor Code violations in a representative capacity and obtain civil penalties, which are then shared between the affected employees and the state."].) An " ‘aggrieved employee’ " is "any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed." ( § 2699, subd. (c) ; see Donohue v. AMN Services, LLC (2018) 29 Cal.App.5th 1068, 1099, 241 Cal.Rptr.3d 111.)

Section 2699, subdivision (i), provides that "civil penalties recovered by aggrieved employees shall be distributed as follows: 75 percent to the [LWDA] ......