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Schoshinski v. City of Los Angeles

California Court of Appeals, Second District, Eighth Division

March 14, 2017

TERENCE SCHOSHINSKI et al., Plaintiffs and Appellants,
v.
CITY OF LOS ANGELES, Defendant and Respondent.

         APPEAL from a judgment of the Superior Court of Los Angeles County, No. BC459269 Elihu M. Berle, Judge. Affirmed.

          Marlin & Saltzman, Stanley D. Saltzman, Stephen P. O'Dell; The Hamideh Firm and Bassil A. Hamideh for Plaintiffs and Appellants.

          Michael N. Feuer, City Attorney, Thomas Peters, Chief Assistant City Attorney, A. Patricia Ursea, Deputy City Attorney, for Defendant and Respondent.

          BIGELOW, P.J.

         In 2012, the City of Los Angeles settled Chakhalyan v. City of Los Angeles (Chakhalyan), a class action lawsuit. The suit alleged the City had an unlawful practice of charging a trash disposal fee to customers living in multi-unit dwellings who received no trash disposal services from the City. Cunningham v. City of Los Angeles, another class action lawsuit asserting similar allegations, was simultaneously pending. The named plaintiff, Brian Cunningham, did not opt out of the Chakhalyan class or exclude himself from the settlement. Following approval and finalization of the settlement in Chakhalyan, the City successfully moved for summary judgment of Cunningham's claims. However, the trial court permitted Cunningham to amend the complaint to add two additional named plaintiffs.

         The two new plaintiffs, Terence Schoshinski and Thomas Ballatore (collectively “plaintiffs”), also alleged the City unlawfully charged them and others the trash disposal fee. The City again moved for summary judgment, offering evidence that in connection with an injunctive relief provision in the Chakhalyan settlement, the City had already reimbursed the plaintiffs for all improper charges. The City argued plaintiffs' claims were now moot and they lacked standing to prosecute the action. The trial court agreed and granted summary judgment.

         On appeal, plaintiffs argue the trial court erred in concluding they could not continue representing the class defined in their complaint. Plaintiffs assert their individual claims are not moot because they did not receive all of the relief they demanded in their complaint. They also rely on caselaw indicating a defendant's attempts to unilaterally resolve a class representative's claims, or “pick off” the representative, do not necessarily eliminate that plaintiff's standing to continue prosecuting claims alleged in a class action complaint.

         We conclude plaintiffs' individual claims are moot because a court could grant them no further relief beyond what they have already received. Further, unlike other cases in which the “pick off” exception has been applied, here, the injunctive relief provisions in the Chakhalyan stipulated settlement and judgment required the City to reimburse plaintiffs and other putative class members. The City complied with this obligation before plaintiffs filed the second amended complaint naming them as parties. Under these particular circumstances, the “pick off” exception does not apply.

         FACTUAL AND PROCEDURAL BACKGROUND

         In August 2010, Lilith Chakhalyan filed a class action lawsuit against the City of Los Angeles alleging it improperly collected “solid resource fees” from her and other class members, through entities such as the Department of Water and Power (DWP) and the Department of Public Works. Chakhalyan claimed the City “was improperly billing and collecting Solid Resource Fees... from herself and others who live in Multiple-Family Dwellings (e.g. apartment buildings). Plaintiff claimed that the [fee] collected from her was illegal because the City is prohibited from collecting [the fees] from Multiple-Family Dwellings... if the City does not collect trash from the building.”

         In April 2011, Brian Cunningham filed a separate class action suit against the City and various entities (collectively “the City”), alleging the City had improperly charged him and others the solid resource fee. According to the complaint, in 2001, the City settled a lawsuit regarding a fee improperly imposed for trash collection services, yet it continued unlawfully charging the same fee under a different name.

         On June 8, 2012, the trial court conducted a final approval hearing, and on June 25, the court entered a final order and judgment in Chakhalyan. The judgment adopted the terms and conditions of a settlement agreement the parties had entered and executed in December 2011. The judgment finally certified a class defined as “all customers of the Los Angeles Department of Water & Power who, between October 28, 2007 and February 27, 2012, inclusive, paid [a solid resource fee] Overcharge and who did not exclude themselves from the Class.”[1]

         Under the settlement, all class members were entitled to full reimbursement of all solid resource fee overcharges paid from October 28, 2007 through February 27, 2012.[2] The City was to pay all class member claims no later than 180 days after entry of the final order and judgment; thus, by approximately late December 2012.

         The settlement, incorporated into the judgment, also provided for injunctive relief. This included the following: “(1) The City will alter its billing system, policies and practices to ensure that the [solid resource fee] Overcharges are halted and do not recur. These alterations have or will include the actions set forth in Exhibit G. (2) The City will routinely monitor its billing system, policies and practices to ensure that the [solid resource fee] Overcharges do not recur. In the event it identifies future [solid resource fee] Overcharges through such monitoring, the City will promptly and fully reimburse any persons so identified according to the City's refund policy and make further appropriate modifications to its billing system, policies and practices.”

         Exhibit G, referenced in the agreement, included measures such as a billing insert to be sent to all new residential customers explaining Bureau of Sanitation rates; the posting of notices regarding refunds or credits for solid resource fee overcharges in DWP offices and on the DWP website; and ongoing Bureau of Sanitation projects related to preventing and correcting billing errors.[3]

         The judgment additionally provided: “Without affecting the finality of this Judgment in any way, this Court hereby retains continuing jurisdiction over (a) implementation of the settlement and any award or distribution to the Class Members, including any dispute regarding an individual's entitlement to receive a settlement benefit or its amount; and (b) all Parties for the purpose of enforcing or administering the Stipulation, pursuant to C.C.P. § 664.6 or otherwise.”

         In December 2012, the City filed a motion for summary judgment in Cunningham. Plaintiffs' opposition to the motion, filed on February 21, 2013, included a declaration from Terence Schoshinski. Schoshinksi declared he had been charged, had paid, and continued to pay the solid resource fee, despite not receiving trash pick-up services from the City for his multi-unit residential property. Schoshinski declared he had repeatedly contacted the City and requested that it cease charging him the fee, to no avail.

         On March 8, 2013, the City issued an over $980 credit to Schoshinski's DWP account.

         On April 9, 2013, Cunningham's counsel provided the City's counsel a copy of a proposed Second Amended Complaint, which named Schoshinksi and Ballatore as plaintiffs.

         On April 16, 2013, the City issued an over $1500 credit to Ballatore's DWP account.

         On April 18, 2013, Cunningham filed an ex parte application asking the court to specially set a hearing on his motion for leave to file a second amended complaint so that it could be considered before or with the City's motion for summary judgment.

         On April 29, 2013, the trial court granted summary judgment in favor of the City on Cunningham's complaint. The court concluded the City “offered sufficient evidence to show [Cunningham's] claims are precluded based upon the valid and binding Chakhalyan settlement and the doctrines/defense of res judicata and lack of standing. [Cunningham] presented no evidence to raise a triable issue of material fact.” However, the court granted Cunningham leave to file the second amended complaint adding Schoshinski and Ballatore as plaintiffs. According to plaintiffs, on that day, after the court hearing, they learned for the first time that the City had credited their accounts for the overcharges they had paid.

         On April 30, 2013, plaintiffs filed the second amended complaint.

         In June 2013, the City again moved for summary judgment. The City argued res judicata barred Ballatore from pursuing some of his claims because he was a class member in the Chakhalyan suit. The City further asserted both plaintiffs lacked standing because their claims were moot. According to the City, the Chakhalyan settlement resulted in a “continuing injunction within the court's jurisdiction, prohibiting and redressing the very conduct of which Plaintiffs complain in this lawsuit and about which they might claim any standing....” The City further argued: “By virtue of these mandatory injunctive obligations, the City is required to provide prospective relief to all individuals it discovers have been mischarged [solid resource fee] Overcharges, in addition to ceasing the billing of those charges. On this basis, Plaintiffs and 852 others have already obtained relief regarding SRF Overcharges and Plaintiffs cannot obtain any effectual relief, or relief that would not just duplicate the already mandatory Chakhalyan obligations.”

         In support of the motion, the City offered declarations from several City employees. A City database architect declared: “Since conclusion of administration of refunds/credits to self-identified and identified Chakhalyan class members, in the course of my duties as a Database Architect for the Bureau [of Sanitation], I continue to review and determine whether there are any accounts that need adjustment (i.e. the stopping and/or refunds/credits of Solid Resource Fees). I do so consistent with the injunctive obligations on the City pursuant to Chakhalyan. [¶] To this end, since January 2013, I am aware of 854 such accounts for which such adjustments were made, including the accounts of Thomas Ballatore and Terence Schoshinski....” The declaration was dated June 11, 2013.

         Another City employee declared billing records indicated Ballatore paid the solid resource fee from September 11, 2007 through April 10, 2013; the charges were stopped effective April 16, 2013, and the City issued a refund/credit on that date for all of the solid resource fee charges Ballatore paid from October 2009 through April 10, 2013. The employee similarly declared billing records showed the City stopped charging Schoshinksi the solid resource fee effective February 26, 2013, and it issued him a refund/credit on March 8, 2013. The declaration concluded: “Tom Ballatore and Terence Schoshinksi received the aforementioned refunds/credits pursuant to the injunctive obligations arising from Chakhalyan v. City of Los Angeles....”

         The City also offered the declaration of an employee who, in addition to supervising tasks related to claims review for Chakhalyan class members, “supervise[s] and/or oversee[s] compliance with the injunctive obligations on the city as a result of” Chakhalyan. The employee declared: “Consistent with the pending injunction, 854 customer accounts, including those of Thomas Ballatore and Terence Schoshinksi, have had Solid Resources Fee charges stopped and refunds/credits issued.”

         The parties stipulated to narrow the issues presented for summary judgment to the City's assertion that the plaintiffs' claims were moot and they therefore lacked standing since, prior to joining the action, they obtained relief pursuant to the Chakhalyan injunction.[4]

         Plaintiffs opposed the motion, on these narrowed grounds. Ballatore declared he began receiving private trash collection services in October 2009. According to Ballatore, the City told him in 2009 that he had to pay the solid resource fee, even though he was not receiving trash collection services from the City. He declared that in 2011, the City again told him he had to pay the fee, even after he called in response to a City letter informing residents they should not be charged a solid resource fee if they lived in a multiple-family dwelling that did not receive refuse collection services from the City. Ballatore declared that when he received a notice regarding the Chakhalyan settlement he discarded it. The City charged him the solid resource fee as late as April 2013. The credit to his DWP account was applied without his knowledge or consent. It appeared on his June 2013 DWP account statement.[5]

         Schoshinski declared he informed the City in August 2012 that he was using a private trash collection service for his five-unit multi-family dwelling. According to Schoshinski, the City did not stop charging him the sanitation fee. He did not learn until April 29, 2013 that the City had, without his knowledge, applied a credit to his DWP account.

         Plaintiffs argued the City did not stop charging them the solid resource fee, or attempt to refund the charges, until after it learned of their participation in the lawsuit. To support this claim, plaintiffs pointed to the timing of the refunds and plaintiffs' declarations indicating the refunds appeared on their accounts without explanation. They contended there was a triable issue of fact as to whether the City had engaged in an improper attempt to “pick off” plaintiffs to avoid class action litigation and class-wide liability.

         The City stated as undisputed the fact that plaintiffs had received a refund for all solid resource fees they were improperly charged. Plaintiffs purported to dispute that fact with only the following statement: “It is unknown what the credit on [the plaintiffs' DWP accounts] was/is for or whether, if in fact it represents a refund, it is accurate.”

         The trial court granted the City's motion. The court reasoned, in part, that plaintiffs received refunds from the City after the Chakhalyan settlement was approved and this alone appeared sufficient to indicate they lacked standing to act as class representatives. The court rejected the “pick off” theory, noting the City's payments were mandatory under the Chakhalyan settlement, not voluntary. The court indicated plaintiffs offered no evidence to rebut the City's evidence showing the basis of the payments to them was the Chakhalyan settlement. The court concluded all of plaintiffs' claims were subsumed by that settlement and it provided all of the relief plaintiffs sought, thus plaintiffs had no valid claims.[6]

         This appeal followed.[7]

         DISCUSSION

         I. ...


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