Starks v. Vortex Indus., Inc.

Decision Date25 August 2020
Docket NumberB288005,B292643
CourtCalifornia Court of Appeals Court of Appeals
Parties Chad STARKS, Plaintiff and Respondent, v. VORTEX INDUSTRIES, INC., Defendant and Respondent; Adolfo Herrera, Movant and Appellant. Adolfo Herrera, Plaintiff and Appellant, v. Vortex Industries, Inc., Defendant and Respondent.

Matern Law Group, Matthew J. Matern, Matthew W. Gordon, Manhattan Beach, Kiran Prasad, Torrance, and Vanessa M. Rodriguez for Movant and Appellant Adolfo Herrera (B288005 & B292643 [Super. Ct. No. BC590955] ) and for Plaintiff and Appellant Adolfo Herrera (B288005 & B292643 [Super. Ct. No. BC644313] ).

Shenkman & Hughes, Kevin Shenkman, Los Angeles; Law Offices of Milton C. Grimes, Milton Grimes ; Lawyers for Justice and Edwin Aiwazian, Glendale, for Plaintiff and Respondent Chad Starks (B288005 & B292643 [Super. Ct. No. BC590955] ).

Sheppard, Mullin, Richter & Hampton and Ryan D. McCortney, Costa Mesa, for Defendant and Respondent Vortex Industries, Inc. (B288005 & B292643 [Super. Ct. Nos. BC590955 & BC644313] ).

ROTHSCHILD, P. J.

The Labor and Workforce Development Agency (LWDA) is authorized to recover civil penalties from employers for violations of the Labor Code. Under the Labor Code Private Attorneys General Act of 2004 (PAGA) ( Lab. Code,1 § 2698 et seq. ), an employee aggrieved by his or her employer's Labor Code violations may be authorized to act as an agent of the LWDA to recover such penalties in a civil action. In the cases underlying these consolidated appeals, Chad Starks and Adolfo Herrera, each acting as the LWDA's agent, separately filed substantially identical PAGA actions against their former employer, Vortex Industries, Inc. (Vortex). Herrera, who filed his PAGA action (the Herrera action) 16 months after Starks commenced his action (the Starks action), never moved to consolidate the cases and did little to litigate his action.

Starks settled with Vortex. The court approved the settlement and entered judgment thereon. The LWDA thereafter accepted its share of the judgment proceeds. After learning of the judgment, Herrera moved to vacate the judgment and to intervene in the Starks action. The court denied the motions and subsequently granted Vortex's motion for summary judgment against Herrera.

Herrera appealed the denial of his motions in the Starks action and the judgment in his lawsuit. We hold: (1) The trial court did not abuse its discretion when it determined that Herrera's motion to intervene in the Starks action was untimely; and (2) Because the LWDA accepted the proceeds from the judgment in the Starks action, Herrera, as the LWDA's agent, cannot attack that judgment. We also affirm the judgment in the Herrera action.

FACTUAL AND PROCEDURAL BACKGROUND

Vortex is in the business of repairing and replacing commercial and industrial doors. It employed Starks as a service technician from January 2011 to November 2014, and employed Herrera as a service technician from July 2015 to November 2015.

On June 30, 2015, pursuant to section 2699.3, Starks gave notice to the LWDA and Vortex of his allegations that Vortex violated certain Labor Code requirements, including requirements that employers pay overtime wages (§§ 510, 1198), provide meal and rest periods (§§ 226.7, 512, subd. (a)), timely pay wages during and upon termination of employment (§§ 201-202, 204), provide complete and accurate wage statements and payroll records (§§ 226, subd. (a), 1174, subd. (d)), pay minimum wages (§§ 1194, 1197, 1197.1), and reimburse employees for necessary business expenses (§ 2802). Sparks stated that he intended to recover "on behalf of all aggrieved employees ... all applicable penalties related to these violations." The LWDA did not respond to the notice.

On August 10, 2015, Starks filed a complaint in the superior court commencing the Starks action. He asserted a single cause of action under PAGA based upon allegations that Vortex failed to comply with the Labor Code requirements specified in his notice to the LWDA. The case was assigned to Judge Richard L. Fruin.

On December 1, 2016, the court issued an order bifurcating the trial in the Starks action. The first phase would determine whether Starks is an "aggrieved employee" under PAGA.2 The second phase would determine whether there are other aggrieved employees and the amount of civil penalties.

Meanwhile, on October 11, 2016, Herrera gave notice to the LWDA and Vortex of his intention to sue Vortex based upon allegations of Labor Code violations similar to those Starks had previously alleged. The LWDA did not respond to Herrera's notice.

On December 16, 2016, Herrera filed his complaint, commencing the Herrera action, alleging a single cause of action under PAGA, based upon the violations of the Labor Code requirements he had alleged in his notice. The Herrera action was initially assigned to Judge Monica Bachner.

In January 2017, Vortex filed a demurrer seeking a stay of the Herrera action on the ground that there was another action pending—the Starks action—and that a stay was proper under the rule of exclusive concurrent jurisdiction. (See Code Civ. Proc., § 430.10, subd. (c).) The court rejected these arguments and denied the request for a stay.

On March 17, 2017, Vortex filed in both the Herrera and Starks actions notices that the actions are related cases pursuant to rule 3.300 of the California Rules of Court. The court thereafter declared the two cases related and reassigned the Herrera action to Judge Fruin. The court noted that its order was without prejudice to the parties filing a motion to consolidate the actions. Herrera did not file a motion to consolidate. Nor does it appear from our record that Herrera litigated his case beyond propounding some initial discovery, while the parties in the Starks action conducted discovery and proceeded to trial.

During five days in July 2017, the court conducted the first phase of the bifurcated trial in the Starks action and found that Starks is an aggrieved employee for purposes of PAGA.

On September 27, 2017, the court held a case management conference in the Herrera action. During the conference, counsel for Vortex stated that Starks and Vortex were engaged in settlement discussions and that "Herrera is encompassed in the non-party employees that Starks ... represents in the Starks action." Vortex's counsel also expressed his agreement with the court's statement that a settlement in the Starks action "has implications to the Herrera case." Nevertheless, Herrera's counsel gave no indication that Herrera would move to consolidate the two cases or intervene in the Starks action. The court, over Herrera's objection, ordered the Herrera action stayed until November 1, 2017, and set a further conference for that date.3

On October 2, 2017, Starks and Vortex participated in a mediation, which resulted in a written settlement agreement conditioned upon the court's approval. According to the agreement, Vortex agreed to an aggregate settlement amount of $675,000, allocated as follows: $630,000 of the settlement amount "shall be regarded as" Starks's counsel's attorney fees and costs; $25,000 is "attributable to the representative PAGA claim"; $10,000 is "designated as the portion ... attributable to the Labor Code section 558 penalties/wages"; and $10,000 is allocated to Starks as a "plaintiff representative service award." Of the $25,000 allocated to the PAGA portion, Vortex would pay $18,750 to the LWDA within 15 days of the court's approval of the settlement; the remainder (i.e., $6,250), as well as the entirety of the portion attributable to section 558 (i.e., $10,000), would be paid within 45 days of the court's approval to Vortex's "current and former service technicians, employed by [Vortex] at any time during the time period of June 30, 2014 through the date of court approval of the settlement." The settlement agreement included a release of civil claims against Vortex for penalties under PAGA.

On October 5, 2017, Starks's counsel provided a copy of the settlement agreement to the LWDA. The LWDA did not object to the agreement.

On October 12, 2017, Vortex and Starks filed a joint ex parte application for court approval of the settlement agreement. They did not give notice of the application or a copy of the settlement agreement to Herrera or any other aggrieved employee of Vortex. At the hearing on the application, the court accepted the parties’ stipulation that Herrera "need not be notified of settlement at this time." The court instructed the parties to file additional declarations and set a further hearing for October 18, 2017.

During the October 18, 2017 hearing, the trial court directed Starks to file a first amended complaint and Vortex to file an answer thereto.4 A minute order concerning the hearing states that "[t]he case is settled" and that the court intended to sign and file a proposed order and judgment approving the settlement agreement.

On October 24, 2017, the trial court issued an order and judgment approving the settlement agreement (the Starks judgment), thereby terminating the action. Herrera was not given notice of the order or judgment. The Starks judgment incorporated by reference the "terms and conditions" of the settlement agreement and "direct[ed] the implementation of all remaining terms, conditions, and provisions" of the settlement agreement. It further provided that the settlement agreement "shall be binding on all [a]ggrieved [e]mployees and the State of California, who are hereby barred from re-litigating" the claims released in the settlement agreement.

At the continued case management conference held on November 1, 2017, Herrera's counsel informed the court that he had learned of the settlement in the Starks action on October 24, 2017, by "checking the [court's] docket." During the hearing, the court lifted the stay in the Herrera action.

By check dated November 7, 2017, Vortex paid the LWDA the amount of $18,750 due to it...

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    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • 24 Mayo 2022
    ...v. Vortex Industries, Inc., 268 Cal.Rptr.3d 274 (Cal.Ct.App. 2020) (ordered unpublished). (Doc. 9 at 7-9.) According to CCFS, Robinson and Starks stand for proposition that “when multiple employees incur legal fees, if they do so in separate suits, only one of them can recover their fees un......
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    • United States
    • California Court of Appeals
    • 14 Julio 2021
    ...in RJN 2 is the alleged number of PAGA notices filed in the year 2019 and between January 1, 2020 and October 31, 2020. We do not rely on Starks in reaching our decision, and we deny 2 and SRJN as irrelevant or unnecessary to our ultimate conclusions. (Deveny v. Entropin, Inc. (2006) 139 Ca......
2 books & journal articles
  • Employment Law Case Notes
    • United States
    • California Lawyers Association Public Law Journal (CLA) No. 43-4, December 2020
    • Invalid date
    ...Arnold's claims.[Page 18]LATER-FILED, SUBSTANTIALLY IDENTICAL PAGA CLAIM WAS PROPERLY DISMISSED Starks v. Vortex Indus., Inc., 53 Cal. App. 5th 1113 (2020)Chad Starks gave notice to the Labor and Workforce Development Agency (LWDA) of his allegations that his employer (Vortex) had violated ......
  • Employment Law Case Notes
    • United States
    • California Lawyers Association California Labor & Employment Law Review (CLA) No. 34-6, November 2020
    • Invalid date
    ...Arnold's claims.[Page 18]LATER-FILED, SUBSTANTIALLY IDENTICAL PAGA CLAIM WAS PROPERLY DISMISSED Starks v. Vortex Indus., Inc., 53 Cal. App. 5th 1113 (2020)Chad Starks gave notice to the Labor and Workforce Development Agency (LWDA) of his allegations that his employer (Vortex) had violated ......

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