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The People Ex Rel. Kamala D. Harris, As Attorney General, Etc v. Sunset Car Wash

May 16, 2012


(Los Angeles County Super. Ct. No. BC428009) APPEAL from a judgment of the Superior Court of Los Angeles County, Daniel J. Buckley, Judge. Affirmed.

The opinion of the court was delivered by: Kriegler, J.


Labor Code section 2050*fn1 et seq. established a regulatory scheme for car wash operators, motivated by a legislative concern that car wash employees were not being paid in accordance with law. One component of the statutory scheme--section 2066--imposes liability upon a "successor" to a car wash employer for unpaid wages and penalties owed by a predecessor employer in four circumstances, including where the successor uses the same facilities to perform substantially the same services as the predecessor. We hold that the four circumstances of liability set forth in section 2066 determine the meaning of "successor," and there is no need to look to other statutes and case law to further define the term. We further hold that imposition of liability against a successor who operates at the same location as a predecessor car wash employer does not constitute a violation of due process.


Plaintiff and respondent The People of the State of California ex rel. Kamala D. Harris, as Attorney General, filed an action against defendant and appellant Sunset Car Wash, LLC, seeking to recover unpaid wages and penalties owed by defendant Auto Spa Express, Inc. (Auto Spa),*fn2 which had operated a car wash at the same location before being evicted by the property owner, Sunset Alvarado Investors, LLC. In denying a motion for summary judgment filed by Sunset Car Wash, the trial court ruled that Sunset Car Wash was a successor to Auto Spa as defined in section 2066, because it operated at the same location and performed the same services. Based on the court's ruling, the People and Sunset Car Wash agreed to entry of a judgment in favor of the People in the amount of $120,000. Execution of the judgment was stayed pending an appeal by Sunset Car Wash on two issues--whether Sunset Car Wash was a successor for purposes of section 2066, and if liability violates due process of law.


The facts are undisputed and may be briefly stated. Auto Spa operated a car wash on Sunset Boulevard in Los Angeles. Sunset Alvarado Investors, which held a note secured by a trust deed on the Sunset Boulevard property, foreclosed on the property, evicted Auto Spa, and leased the same premises to Sunset Car Wash. Auto Spa had failed to pay minimum wage and overtime to its employees and denied paid rest breaks. The People brought this action to hold Sunset Car Wash liable for the wages and penalties owed by Auto Spa.


Sunset Car Wash contends section 2066 does not apply to its operation, because it is not a "successor" for purposes of the statute. It argues statutes are not construed in isolation, and "successor" under section 2066 should be defined by reference to court-established definitions of the word, citing to the discussions of "successor" in Ray v. Alad Corp. (1977) 19 Cal.3d 22 (Alad Corp.) and Superior Care Facilities v. Workers' Comp. Appeals Bd. (1994) 27 Cal.App.4th 1015 (Superior Care). The People argue that section 2066 contains a self-executing definition of "successor" in the four categories of liability set forth in the statute and resort to external definitions would render "successor" mere surplusage.

Section 2066

The Legislature was motivated to regulate the car wash industry in 2003 by its findings that operators employed practices that sometimes resulted in violation of the state's labor laws, and other attempts to enforce the law had proven ineffective. (Historical and Statutory Notes, 44C West's Ann. Lab. Code (2011 ed.) § 2066, p. 21.) The regulatory scheme established "a system of registration, bonding requirements, and enforcement to impose prompt and effective civil sanctions for the violation of the provisions set forth in this act or any provision of law applicable to the employment of workers in the car washing and polishing industry." (Historical and Statutory Notes, supra, § 2050, p. 8.) The provision of the scheme at issue here, section 2066, provides as follows:

"A successor to any employer that is engaged in car washing and polishing that owed wages and penalties to the predecessor's former employee or employees is liable for those wages and penalties if the successor meets any of the following criteria:

"(a) Uses substantially the same facilities or workforce to offer substantially the same services as the predecessor employer.

"(b) Shares in the ownership, management, control of the labor relations, or interrelations of business operations with the predecessor employer.

"(c) Employs in a managerial capacity any person who directly or indirectly controlled the wages, hours, or working conditions of the affected ...

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