Tanguilig v. Neiman Marcus Grp., Inc.

• Decision Date: 16 April 2018
• Docket Number: A141383
• Citation: 231 Cal.Rptr.3d 749,22 Cal.App.5th 313
• Court: California Court of Appeals Court of Appeals
• Parties: Bernadette TANGUILIG, Plaintiff and Appellant, v. NEIMAN MARCUS GROUP, INC., Defendant and Respondent.

22 Cal.App.5th 313

231 Cal.Rptr.3d 749

Bernadette TANGUILIG, Plaintiff and Appellant,

v.NEIMAN MARCUS GROUP, INC., Defendant and Respondent.

A141383

Court of Appeal, First District, Division 4, California.

Filed April 16, 2018

Cornerstone Law Group, Gordon W. Renneisen, Harry G. Lewis, San Francisco, and Kenneth A. Frost III ; Law Offices of Douglas A. Kahn and Douglas A. Kahn for Plaintiff and Appellant.

Jackson Lewis, David S. Bradshaw, Patrick C. Mullin ; Jones Day and Matthew J. Silveira for Defendant and Respondent.

Streeter, Acting P.J.

I. INTRODUCTION

Appellant Bernadette Tanguilig brought suit against her former employer, Neiman Marcus Group, Inc. (NMG), alleging a combination of individual and class claims for wrongful termination in violation of public policy and multiple violations of the California Labor Code. Early in the trial court proceedings, NMG successfully demurred to Tanguilig's wrongful termination and related claims, and several years later, moved to dismiss the remaining claims pursuant to California's five-year dismissal statute, Code of Civil Procedure section 583.310.¹ The trial court granted the motion and dismissed the suit. On appeal, Tanguilig urges us to overturn the five-year dismissal order, arguing primarily that the trial court erred in failing to toll the five-year clock under section 583.340, subdivision (c), for the period during which an order compelling co-plaintiff Juan Carlos Pinela to arbitration was in effect. Tanguilig also appeals an order sustaining NMG's demurrer and an award of prevailing-party costs to NMG.

Finding no merit to any of the assigned errors, we affirm.

II. BACKGROUND

Tanguilig was employed by NMG, a Texas-headquartered luxury fashion retailer, at its San Francisco location from 2002 to 2007. At the core of this case is an arbitration agreement (the NMG Agreement or the NMG Arbitration Agreement) which NMG introduced in July 2007. NMG notified its employees that acceptance of the NMG Agreement was a mandatory condition of employment which would be implied for all employees who continued to work at any NMG location beyond July 15, 2007. Tanguilig took the view the NMG Agreement violated California public policy, objected to it, and unsuccessfully tried to negotiate with NMG over its terms. When this attempt at negotiation failed, Tanguilig chose not to return to work after July 15 to avoid being bound by the NMG Agreement, and as a result, NMG treated her failure to show up for work as a voluntary resignation.

Tanguilig sued, originally bringing this action in August 2007. She filed her First Amended Complaint (FAC) on December 19, 2007, alleging 10 causes of action against NMG: (1) wrongful termination in violation of public policy; (2) wrongful retaliation for refusing to consent to the NMG Agreement; (3) wrongfully requiring employees to agree to allegedly illegal terms in violation of Labor Code section 432.5 ; (4) failure to provide 10-minute rest periods in violation of Labor Code section 226.7 ;² (5) failure to provide 30-minute meal periods in violation of Labor Code section 512 ; (6) failure to pay overtime wages in violation of Labor Code sections 510 and 1198 ; (7) failure to pay minimum wage in violation of Labor Code section 1182.11 ; and (8) failure to pay wages owed at the time of discharge in violation of Labor Code sections 201 and 202. Tanguilig also alleged (9) she was entitled to civil penalties pursuant to Labor Code section 2699 et seq. , the Private Attorney General Act of 2004 (PAGA); and (10) NMG injured her and the general public by putting itself in an unfairly advantageous position in violation of the Unfair Competition Law (UCL), Business and Professions Code section 17200 et seq. Counts 1 through 8 were individual claims, while count 9 was a representative PAGA claim, and count 10 was something Tanguilig refers to as a "representative" claim under the UCL.

What followed was a long, complex series of procedural events over the next six years, eventually culminating in the dismissal of Tanguilig's claims in February 2014 pursuant to section 583.310. For the sake of clarity, we divide this procedural history into four major periods.

A. Tanguilig's Initial Suit

From August 2007 until March 2011, Tanguilig proceeded as the sole plaintiff in the action,³ which was single-assigned to the Honorable Richard A. Kramer.

In March 2008, NMG demurred to counts 1, 2, 3, 9, and 10 of the FAC, and moved to strike additional portions of that complaint. In June of that year, Judge Kramer granted the relief sought by NMG, sustaining the demurrer as to counts 1, 2, 3, 9, and 10 without leave to amend, and striking substantial portions of the FAC, effectively eliminating claims 4, 5, 6, and 7 subject to amendment. From June to September 2008, Tanguilig sought writ review from this court. We ultimately denied her petition.

Tanguilig filed her SAC in October 2008, adding class action allegations. The SAC revived some of the claims from the FAC, alleging seven causes of action, including a PAGA claim and several other claims she sought to pursue on behalf of a putative class: (1) violation of Labor Code sections 226.7 and 512 ; (2) violation of Labor Code section 226 ; (3) violation of Labor Code sections 510 and 1198 and IWC Wage Order 4; (4) violation of Labor Code section 1194 and IWC Wage Order 4; (5) violation of Labor Code sections 201 and 202 ; (6) violation of Labor Code section 2699 et seq. (PAGA); and (7) violation of Business and Professions Code section 17200 et seq.

To support her class allegations, Tanguilig sought employee records and other information through various discovery requests directed to NMG over the next two years. She says this proved difficult, as NMG was recalcitrant in responding to her discovery, although she eventually received enough information to move for class certification on June 22, 2011. Judge Kramer deferred decision on class certification, however, in part because of Tanguilig's decision to further amend her complaint.

B. Tanguilig Adds Pinela as a Co-Plaintiff

In March 2011, Tanguilig added as a co-plaintiff Juan Carlos Pinela, an employee at NMG's Newport Beach store from November 2007 to October 2009, who, unlike Tanguilig, had signed the NMG Agreement. Tanguilig and Pinela together filed a Third Amended Complaint (TAC), which reiterated the claims in the SAC, except it removed all references to the IWC Wage Order and added an additional claim.⁴ Thus, the final list of claims asserted by Tanguilig and Pinela encompassed seven claims they sought to pursue on behalf of a putative class, as well as the PAGA claim.

The addition of Pinela created what would become a lasting roadblock in the case, the effects of which would be felt for years to come. Pinela was a signatory party to the NMG Agreement, and as a result, after he joined as a plaintiff, NMG filed a motion to compel him to arbitrate his claims. Refraining from hearing Tanguilig's and Pinela's class certification motion before resolving the motion to compel arbitration, Judge Kramer issued a ruling (the Arbitration Order) on the motion to compel in November 2011, finding the NMG Agreement enforceable. Judge Kramer thus held Pinela was bound by the terms of the NMG Agreement and could only pursue his non-PAGA claims in arbitration.

While ordering that Pinela could not go forward with his seven non-PAGA claims in superior court, Judge Kramer expressly permitted Tanguilig to proceed with her claims on behalf of the putative class except for any class members who were bound by the NMG Agreement. This caveat limited Tanguilig's class representation to current or former NMG employees who had not signed the NMG Agreement. Consistent with that limitation, Judge Kramer also stayed the portion of the PAGA claim asserted by Tanguilig and Pinela pertaining to anyone subject to the NMG Agreement. We denied writ review of the Arbitration Order in January 2012.

C. The Reconsideration Period

Following our denial of writ relief, Tanguilig and Pinela asked Judge Kramer to reconsider the Arbitration Order. At the same time, Pinela took initial steps toward compliance with it by filing a request for arbitration with the American Arbitration Association. Before an arbitration panel was appointed, however, on November 8, 2012, Judge Kramer, proceeding on his own motion, vacated the Arbitration Order and issued a new order denying NMG's motion to compel arbitration. NMG appealed, and we subsequently affirmed Judge Kramer's order on reconsideration. (See Pinela v. Neiman Marcus Group, Inc. (2015) 238 Cal.App.4th 227, 190 Cal.Rptr.3d 159.)

Immediately after Judge Kramer vacated the Arbitration Order, Tanguilig renewed her efforts to bring the case to trial, requesting a trial date for at least her PAGA claim because there was no dispute that it was still within the trial court's jurisdiction. In a case management report filed on November 9, 2012, Tanguilig advised the court that the action was nearing the five-year deadline from the filing of the action (measured from the filing of the FAC, which first asserted the Labor Code and UCL claims that remained in the TAC), but took the position that under section 583.340, subdivision (c)—which provides for tolling when it is impossible, impracticable or futile to bring an action to trial—the running of the five-year dismissal statute was suspended while the Arbitration Order was in effect, and thus the actual deadline was still at least a year away. Rather than set the PAGA claim for trial immediately, Judge Kramer asked for further briefing on the request to set a trial date, and set a hearing on the matter for February 2013.

D. Reassignment to Judge Karnow

In January 2013, the case was transferred from Judge Kramer to the Honorable Curtis E.A. Karnow. Before deciding the motion to set a trial date, Judge Karnow elected first to resolve a motion for summary adjudication filed by NMG. After denying summary adjudication in September 2013, Judge...