APPEAL from an order and a judgment of the Superior Court of Los Angeles County, Peter D. Lichtman, Judge. Affirmed. (Los Angeles County Super. Ct. No. BC388380).
The opinion of the court was delivered by: Mallano, P. J.
CERTIFIED FOR PUBLICATION
In a prior class action, employees sued their employer, alleging failure to pay overtime compensation (see Lab. Code, §§ 510, 1194), failure to pay wages for a split shift (see Cal. Code Regs., tit. 8, § 11040, subd. (4)(C)), and violation of the unfair competition law (Bus. & Prof. Code, §§ 17200-17209). The employees also sought civil penalties under the Labor Code. (See Lab. Code, § 558.) Ultimately, the action settled, with the employer agreeing to pay up to $2.5 million to class members and their counsel. The employer allocated up to $730,000 for penalties. The superior court approved the settlement agreement and dismissed the case with prejudice.
Two days later, plaintiff, a member of the prior class, filed this action against the same employer, seeking civil penalties under the Labor Code Private Attorneys General Act of 2004 (PAGA) (Lab. Code, §§ 2698-2699.5) for alleged violations of the Labor Code with respect to paying overtime compensation (see Lab. Code, §§ 510, 1194), furnishing employees with complete wage statements (see id., § 226, subd. (a)), providing meal and rest periods (see id., §§ 226.7, 512), indemnifying employees for business expenses and losses (see id., §§ 2800, 2802), and paying wages on a timely basis (see id., §§ 201, 202, 204).
The trial court granted the employer's motion for summary judgment on the ground that plaintiff's claims were barred under the doctrine of res judicata.
We agree with the trial court. A court-approved settlement in a prior suit precludes subsequent litigation on the same cause of action. Res judicata bars not only issues that were raised in the prior suit but related issues that could have been raised. Here, plaintiff attempted a second time to recover civil penalties for alleged Labor Code violations. But he could have sought to expand the scope of the prior action to include his additional penalty claims. In the alternative, he could have opted out of the class. Instead he reaped the benefits of the settlement in the prior action and then promptly filed this suit, seeking more penalties. We conclude res judicata applies and affirm.
The allegations and facts in this case are taken from the papers and exhibits submitted in connection with the motions for summary judgment.
On February 23, 2006, Jennifer Augustus and Eleazer Hernandez filed a class action against American Commercial Security Services (ACSS), a wholly owned subsidiary of ABM Industries Inc., alleging that ACSS had failed to pay its employees overtime compensation (see Lab. Code, §§ 510, 1194) and had violated the unfair competition law (Bus. & Prof. Code, §§ 17200-17209) (Augustus v. American Commercial Security Services, Inc. (L.A. Super. Ct., 2006, No. BC347914) (Augustus)). The complaint sought penalties under Labor Code section 558.*fn1 A first amended complaint (complaint) followed, adding a cause of action for failure to pay wages for a split shift (see Cal. Code Regs., tit. 8, § 11040, subd. (4)(C)).
Augustus was brought on behalf of a class of similarly situated current and former ACSS security guards. The Augustus plaintiffs and putative class members were represented by Roxborough, Pomerance & Nye and Benjamin T. Lee.
The parties in Augustus participated in mediation and reached a tentative settlement subject to the approval of the superior court. Under the terms of the proposed settlement, ACSS would contribute up to $2.5 million to compensate class members and representatives, pay attorney fees and costs, and cover expenses associated with class administration. Of the total amount, the parties allocated $730,000 to be paid as "civil and statutory penalties." The proposed settlement agreement obligated the parties to obtain an order preliminarily approving the settlement "subject only to the objections of Class Members and final review by the Court."
On August 23, 2007, the superior court, Judge David L. Minning presiding, issued an order granting preliminary approval of the Augustus settlement agreement. The court found that the "Notice of Proposed Class Action Settlement and Final Fairness and Approval Hearing" (Notice) "fully and accurately inform[ed] the Class members of all material elements of the proposed Agreement, of the Class members' right to be excluded from the Class, and of each Class member's right and opportunity to object to the settlement." (Italics added.) The Notice also constituted "the best notice practicable under the circumstances and [is] in full compliance with the laws of the State of California, the Federal Rules of Civil Procedure, to the extent applicable, the United States Constitution, and the requirements of due process." A class member who filed a timely objection could appear at the "Final Fairness and Approval Hearing" and present oral argument and evidence supporting the objection. The settlement agreement defined the class as "[a]ll current and former security officers employed by [ACSS] who worked in the State of California anytime between February 23, 2002, and the date of the preliminary approval of this Settlement Agreement[, August 23, 2007]." The court granted conditional certification of the provisional settlement class.
The order also recited: "[T]he Agreement was the product of serious, informed, non-collusive negotiations conducted at arm's length by the parties. In making this preliminary finding, the Court considered the nature of the claims, the amounts and kinds of benefits paid in settlement, the allocation of the settlement among the class members, [and] the financial condition of the parties . . . . [T]he terms of the Agreement have no obvious deficiencies and do not improperly grant preferential treatment to any individual class member. Accordingly, the Court preliminarily finds that the Agreement was entered into in good faith . . . ."
On October 10, 2007, the Notice was mailed to 11,140 putative class members, explaining the terms of the proposed settlement. The recipients had 60 days to request exclusion from, or to opt out of, the class; 201 opted out. No one objected to the settlement.
The Final Fairness and Approval Hearing was held on February 29, 2008. At the conclusion of the hearing, Judge Minning issued an order granting final approval of the settlement agreement. The order recited: "With this final approval of the proposed Settlement, it is hereby ordered that the claims defined more fully in the Settlement Agreement and below, are forever barred. The claims include claims for unpaid wages, interest, penalties and fees, including but not limited to overtime, split shift premiums, 'off-the-clock' work [and] wai[t]ing time penalties . . . for Class Members who were terminated from employment with Defendant on or after February 23, 2003, up to and including August 23, 2007 . . . ." (Italics added) The trial court certified a class in accordance with the class definition in the settlement agreement. The order also stated: "A full opportunity has been afforded to the Settlement Class Members to participate in this hearing, and all Settlement Class Members and other persons wishing to be heard have been heard. Accordingly, the Court determines that all Class Members who did not timely . . . submit an [opt-out form] are bound by this Order." Finally, the order provided that after all amounts had been paid pursuant to the settlement agreement, the case would be dismissed with prejudice.
In its final form, the settlement agreement stated: "Now therefore, in consideration of the mutual covenants, promises and warranties set forth herein, the Class Representatives, the Settlement Class . . . and the Defendant agree . . . that this Action, and any claims, damages, or causes of action arising out of the facts and allegations set forth in the Action, including those set forth in the First Amended Complaint, related to pay for all time allegedly worked but not compensated, including, but not limited to, 'off-the-clock' work, overtime, split shift premiums, any alleged failure to make wage payments in a timely manner, and any applicable penalties (including but not limited to those under California Labor Code section 203) shall be settled and compromised as between the Class Representatives, the Class Members and Defendant, subject to the terms and conditions set forth in this Agreement. This Agreement specifically excludes, however, the right of any Settlement Class Member to recover wages under California Labor Code section 226.7 for alleged missed meal and/or rest periods, as well as any corresponding claims for penalties resulting from untimely payment of such wages prior to February 23, 2003, as explained in further detail below." (Italics added.)
The agreement continued: "In consideration of the monetary sum provided by Defendant and upon final approval of this Agreement by the Court, the Settlement Class and each of the Class Members hereby . . . waive, fully release and forever discharge the Releasees from any and all claims, debts, liabilities, demands, obligations, . . . damages, action or causes of action of any kind, whether known or unknown, which have been or could have been asserted against the Releasees arising out of or related to all claims for wages, overtime pay, pay for all time allegedly worked but not compensated, and all other claims of any kind for wages, penalties, interests, costs and attorneys' fees arising from the alleged violation of any provision of common law, California law and/or Federal law which [were] or could have been raised as part of the Plaintiffs' claims, including but not limited [to] claims under California Labor Code section[s] 201, 202, 204, 210, 218, 510, 512, 551, 552, 558, 1182, 1194, 1197, and 1198, and Business and Professions code sections 17200 et seq. except as to such rights or claims as may be created by this Agreement, with the express exclusion of claims raised in and arising from Augustus v. American Commercial Security Services, et al., Case No. BC 336416, Davis v. American Commercial Security Services, Inc., Case No. CGC 5444421; Hall and Waite v. American Commercial Security Services, Inc., Case No. BC 345918, which have been consolidated with each other in Los Angeles Superior Court and are pending before the Honorable Peter Lichtman; and Batiz and Heine v. American Commercial Security Services, et al., Case No. EDCV-06-00566 VAP, currently pending in federal district court in Riverside, California ('Meal and Rest Period Cases'), and with the express exclusion of claims for waiting time penalties for those Class Members whose employment terminated prior to February 23, 2003." (Italics added & omitted.)
"Releasees" meant "ACSS, its affiliates, subsidiaries, parent, successors-in-interest, and assigns, and all of their present, former and future officers, directors, shareholders, employees, agents, attorneys, insurers, and representatives . . . up until the present time."
Further, the settlement agreement provided that "Class Members expressly waive any right or claim of right to assert hereafter that any claim, demand, obligation, and/or cause of action has, through ignorance, oversight, or error, been omitted from the terms of this Agreement. . . . [N]othing in this Agreement shall be construed to waive any right that is not subject to waiver by private agreement, including without limitation any claims arising under state unemployment insurance or workers' compensation laws or California Labor Code section 2802[, entitling an employee to indemnification for business expenses and losses]."
On April 1, 2008, the Augustus suit was dismissed with prejudice. There was no appeal.
On April 3, 2008, Carlos Villacres, represented by the Initiative Legal Group, filed this action against his former employer, ABM Security Services, Inc., and two related companies, ABM Industries Inc. and SSA Security, Inc. (defendants). Defendants were related to ACSS, the employer in Augustus, and, together with ACSS, constituted a single employer for purpose of this action. The title page of the complaint contained the caption "Class Action" and stated Villacres had brought the action "individually and on behalf of all other members of the public similarly situated." The proposed class consisted of nonexempt or hourly employees who were employed by defendants from March 15, 2007, until the resolution of the case.
Under the heading "Class Action Allegations," the complaint alleged that there was a well-defined community of interest in the litigation and that the class was easily ascertainable. The action allegedly satisfied the class action requirements of numerosity, typicality, adequacy, and superiority. (See Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2010) ¶¶ 14:11-14:11.20, pp. 14-10 to 14-12 (rev. # 1, 2010).) The complaint sought civil penalties under the PAGA for a violation of the Labor Code.
In a first amended complaint (complaint) filed on April 7, 2008, Villacres dropped all references and allegations concerning a class action, and alleged he was bringing the action as "an individual" on behalf of himself and other aggrieved employees. (See Arias v. Superior Court (2009) 46 Cal.4th 969, 980-987 [PAGA suit is a representative action and need not be brought as a class action].) Villacres sought civil penalties under the PAGA for alleged Labor Code violations related to paying overtime compensation (see Lab. Code, §§ 510, 1194), furnishing employees with complete wage statements (see id., § 226, subd. (a)), providing meal and rest periods (see id., §§ 226.7, 512), indemnifying employees for business expenses and losses (see id., §§ 2800, 2802), and paying wages on a timely basis (see id., §§ 201, 202, 204). For each Labor Code violation, Villacres sought PAGA penalties of $100 per employee per pay period for the initial violation and $200 per employee per pay period for each subsequent violation. (See Lab. Code, § 2699, subd. (f)(2); all undesignated section references are to that code.) The complaint also sought attorney fees under the PAGA. (See § 2699, subd. (g)(1).)
Before filing suit, Villacres complied with the PAGA's notice and administrative exhaustion requirements. (See § 2699.3.)
Defendants employed Villacres from March 15, 2007, to April 16, 2007. He was a member of the class in Augustus. He did not opt out of the class, object to the settlement, or seek to intervene in the suit.
On April 15, 2009, defendants filed a motion for summary judgment, contending the doctrine of res judicata barred this action based on the settlement and the dismissal with prejudice in Augustus. Villacres filed opposition, arguing the PAGA claims in this action were not asserted in Augustus, nor were several of the underlying Labor Code violations.*fn2
The trial court, Judge Peter D. Lichtman presiding, heard the motion on July 9, 2009, and took the matter under submission. By minute order dated July 10, 2009, Judge Lichtman granted the motion, relying primarily on the language in the Augustus settlement agreement releasing all claims for wages and penalties. The trial court also found that "the claims at issue in [this action] fall into the category of claims that could have been asserted in the Augustus . . . matter." Villacres appealed.
Summary judgment is appropriate if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).)
"'"A defendant seeking summary judgment has met the burden of showing that a cause of action has no merit if that party has shown that one or more elements of the cause of action cannot be established [or that there is a complete defense to that cause of action]. . . . Once the defendant's burden is met, the burden shifts to the plaintiff to show that a triable issue of fact exists as to that cause of action. . . . In reviewing the propriety of a summary judgment, the appellate court independently reviews the record that was before the trial court. . . . We must determine whether the facts as shown by the parties give rise to a triable issue of material fact. . . . In making this determination, the moving party's affidavits are strictly construed while those of the opposing party are liberally construed." . . . We accept as undisputed facts only those portions of the moving party's evidence that are not contradicted by the opposing party's evidence. . . . In other words, the facts alleged in the evidence of the party opposing summary judgment and the reasonable inferences therefrom must be accepted as true.'" (Buxbaum v. Aetna Life & Casualty Co. (2002) 103 Cal.App.4th 434, 441, italics added.)
"'The doctrine of res judicata rests upon the ground that the party to be affected, or some other with whom he is in privity, has litigated, or had an opportunity to litigate the same matter in a former action in a court of competent jurisdiction, and should not be permitted to litigate it again to the harassment and vexation of his opponent. Public policy and the interest of litigants alike require that there be an end to litigation.'" (Citizens for Open Access etc. Tide, Inc. v. Seadrift Assn. (1998) 60 Cal.App.4th 1053, 1065.) "[R]es judicata benefits both the parties and the courts because it 'seeks to curtail multiple litigation causing vexation and expense to the parties and wasted effort and expense in judicial administration." (Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 897.)
"Under the doctrine of res judicata, a valid, final judgment on the merits is a bar to a subsequent action by parties or their privies on the same cause of action. . . . In California, a 'cause of action' is defined by the 'primary right' theory. 'The most salient characteristic of a primary right is that it is indivisible: the violation of a single primary right gives rise to but a single cause of action.' . . . In particular, the primary right theory provides that a cause of action consists of (1) a primary right possessed by the plaintiff, (2) a corresponding duty devolving upon the defendant, and (3) a delict or wrong done by the defendant which consists of a breach of the primary right. . . . '"If the matter was within the scope of the action, related to the subject matter and relevant to the issues, so that it could have been raised, the judgment is conclusive on it . . . . The reason for this is manifest. A party cannot by negligence or design withhold issues and litigate them in consecutive actions. Hence the rule is that the prior judgment is res judicata on matters which were raised or could have been raised, on matters litigated or litigable. . . ." . . .'" (Amin v. Khazindar (2003) 112 Cal.App.4th 582, 589-590, citations omitted.)
"The fact that different forms of relief are sought in the two lawsuits is irrelevant, for if the rule were otherwise, 'litigation finally would end only when a party ran out of counsel whose knowledge and imagination could conceive of different theories of relief based upon the same factual background.' . . . '[U]nder what circumstances is a matter to be deemed decided by the prior judgment? Obviously, if it is actually raised by proper pleadings and treated as an issue in the cause, it is conclusively determined by the first judgment. But the rule goes further. If the matter was within the scope of the action, related to the subject-matter and relevant to the issues, so that it could have been raised, the judgment is conclusive on it despite the fact that it was not in fact expressly pleaded or otherwise urged. . . . ". . . [A]n issue may not be thus split into pieces. If it has been determined in a former action, it is binding notwithstanding the parties litigant may have omitted to urge for or against it matters which, if urged, would have produced an opposite result . . . ."'" (Interinsurance Exchange of the Auto. Club v. Superior Court (1989) 209 Cal.App.3d 177, 181-182, citations & italics omitted.)
"'In California the phrase "cause of action" is often used indiscriminately . . . to mean counts which state [according to different legal theories] the same cause of action. . . .' . . . But for purposes of applying the doctrine of res judicata, the phrase 'cause of action' has a more precise meaning: The cause of action is the right to obtain redress for a harm suffered, regardless of the specific remedy sought or the legal theory (common law or statutory) advanced. . . . '[T]he "cause of action" is based upon the harm suffered, as opposed to the particular theory asserted by the litigant. . . . Even where there are multiple legal theories upon which recovery might be predicated, one injury gives rise to only one claim for relief. "Hence a judgment for the defendant is a bar to a subsequent action by the plaintiff based on the same injury to the same right, even though [the plaintiff] presents a different legal ground for relief." . . .' Thus, under the primary rights theory, the determinative factor is the harm suffered. When two actions involving the same parties seek compensation for the same harm, they generally involve the same primary right." (Boeken v. Philip Morris USA, Inc. (2010) 48 Cal.4th 788, 798, citations omitted.)
"As far as its content is concerned, the primary right is simply the plaintiff's right to be free from the particular injury suffered. . . . It must therefore be distinguished from the legal theory on which liability for that injury is premised: 'Even where there are multiple legal theories upon which recovery might be predicated, one injury gives rise to only one claim for relief.' . . . The primary right must also be distinguished from the remedy sought: 'The violation of one primary right constitutes a single cause of action, though it may entitle the injured party to many forms of relief, and the relief is not to be confounded with the cause of action, one not being determinative of the other.'" (Crowley v. Katleman (1994) 8 Cal.4th 666, 681-682, citations omitted; accord, Weikel v. TCW Realty Fund II Holding Co. (1997) 55 Cal.App.4th 1234, 1245-1247.)
Res judicata applies to a court-approved settlement agreement in a class action dismissed with prejudice. (See Citizens for Open Access etc. Tide, Inc. v. Seadrift Assn., supra, 60 Cal.App.4th at pp. 1065, 1072; Johnson v. American Airlines, Inc. (1984) 157 Cal.App.3d 427, 431; Alpha Mechanical, Heating & Air Conditioning, Inc. v. Travelers Casualty & Surety Co. of America (2005) 133 Cal.App.4th 1319, 1326-1331; Morris v. Blank (2001) 94 Cal.App.4th 823, 828-830.) In applying the doctrine of res judicata, courts may examine the terms of the settlement agreement to ensure that the defendant did not waive res judicata as a defense. (See, e.g., Citizens for Open Access, supra, 60 Cal.App.4th at pp. 1065-1068; Consumer Advocacy Group, Inc. v. ExxonMobil Corp. (2008) 168 Cal.App.4th 675, 688-689; see also United Bank & Trust Co. v. Hunt (1934) 1 Cal.2d 340, 345-346; Aerojet-General Corp. v. American Excess Ins. Co. (2002) 97 Cal.App.4th 387, 399-400.)
The doctrine is applicable "if (1) the decision in the prior proceeding is final and on the merits; (2) the present proceeding is on the same cause of action as the prior proceeding; and (3) the parties in the present proceeding or parties in privity with them were parties to the prior proceeding." (Federation of Hillside & Canyon Assns. v. City of Los Angeles (2004) 126 Cal.App.4th 1180, 1202, italics added.) "[R]es judicata will not be applied 'if injustice would result or if the public interest requires that relitigation not be foreclosed.'" (Dunkin v. Boskey (2000) 82 Cal.App.4th 171, 181.)
Here, the parties dispute whether Augustus and the present action involve the same cause of action and whether Villacres was in privity with the Augustus plaintiffs.
In Augustus, the complaint alleged the employer had failed to pay overtime compensation, failed to pay wages for a split shift, and violated the unfair competition law. It also sought civil penalties under section 558. (See fn. 1, ante.)
Villacres brought this action against the same employer, seeking civil penalties under the PAGA based on the employer's alleged failure to pay overtime compensation and its ...