Noble v. Draper
Noble v. Draper
Opinion
[EDITORS' NOTE: THE TEXT OF THIS MODIFIED AND REPRINTED. SEE
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 813
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 814 OPINION
In this case alleging employment relationships gone awry, plaintiffs Joaquin Noble (Noble), Jose Antonio Hernandez, Manuel Moreno, and Maria de Lourdes Rios de Noble (Maria Noble) appeal from a judgment entered in favor of defendants Martha Draper and Velasco, Inc., doing business as Cha-Cha's Cocina Mexicana, following the trial court's granting of defense motions for separate trial of special defenses (Code Civ. Proc., §
The other counts were:
(4) fraud by intentional misrepresentation; *Page 815
(5) fraud by negligent misrepresentation;
(6) false advertising;
(7) unfair business practices (Bus. Prof. Code, §
(8) intentional infliction of emotional distress by Noble and Maria Noble.
The eighth count is the only count to which Maria Noble is a party. Accordingly, our reference to "plaintiffs" in this opinion excludes Maria Noble, except in our discussion of the eighth count.
The complaint alleged Noble, Maria Noble, and Jose Hernandez live in Mexico. Moreno lives in Sacramento County.
The complaint alleged plaintiffs lived and worked in Mexico before being "induced" by Draper to come to the United States (USA) to work in defendants' restaurant in Placer County. The complaint alleged: Defendants placed advertisements in Mexican newspapers in November and December 2002, soliciting chefs to work in the USA. Noble, Hernandez, and Moreno (referenced in the complaint as "employees" despite the Labor Commissioner's finding that Moreno was not an employee) responded to the ads by telephoning Draper, who interviewed them by phone and offered them jobs. Draper promised plaintiffs employment, thereby inducing them to quit their jobs in Mexico and incur the expense of traveling to the USA. They worked for defendants for a short period of time before defendants terminated the employment and failed to compensate plaintiffs for their work.
The fourth count, fraud by intentional misrepresentation, alleged that in November and December 2002, to induce plaintiffs to come to work for defendants, defendant Draper told plaintiffs that (1) she would assist them in obtaining legal status to work in the USA; (2) she would pay for their travel to the USA; (3) they would work a normal workweek and enjoy the benefits and protections of the California labor laws; (4) defendants would compensate plaintiffs for their work; and (5) defendants would employ plaintiffs for a substantial period of time to justify the expense and hardship of relocating to the USA. The complaint alleged these representations were false, and Draper knew them to be false and made them with the intent to defraud plaintiffs. In reliance on these representations, plaintiffs were induced to leave Mexico and their jobs there and come to the USA, thereby incurring costs and "substantial hardship." Plaintiffs alleged they "would never have left their respective places of employment and incurred the expense of coming to the United States had they known the falsity of these material representations made by *Page 816 [Draper]." Plaintiffs claimed they suffered damages including the cost of travel, loss of employment opportunities, anxiety, and increased cost of living.
The fifth count alleged "FRAUD BY NEGLIGENT MISREPRESENTATION" on the same facts.
The sixth count alleged false advertising, in that defendants allegedly offered work in the USA to chefs working in Mexico who "either did or did not have a work visa" to work in the USA, and the advertisements were false in that Draper knew or should have known that plaintiffs would not be able to work in the USA. Plaintiffs incurred the expense of coming to the USA and worked for a short period of time, sharing with defendants their culinary experience and recipes, to defendants' benefit.
The seventh count, for unfair business practices, alleged that the foregoing allegations constituted acts of unfair competition and "other acts of impropriety" under Business and Professions Code section
The eighth count, by Noble and Maria Noble for intentional infliction of emotional distress, alleged that on March 11, 2004, four days before a Labor Commissioner administrative hearing of Noble's claim for unpaid wages, "an individual associated with defendants" called Maria Noble by telephone and warned her that Noble should not appear to testify against defendants. The caller allegedly revealed he knew the Nobles' address and the name of their daughter and allegedly threatened that if Noble testified, the daughter would be injured.
Although a date was set for jury trial, the entire case was disposed of without a trial. First, the trial court, at Salazar's request, dismissed his entire case with prejudice. The court then dismissed with prejudice, at Moreno's request, the first three counts (in which Moreno was the only plaintiff).
Defense counsel then asked to "revisit" a motion under Code of Civil Procedure sections
As to Noble, the ODA stated he filed a claim with the Labor Commissioner seeking wages for November, 29, 2002, to February 28, 2003, in the approximate amount of $36,540, plus interest, plus additional wages as a penalty under section 203, which penalizes an employer who fails timely to pay an employee who is discharged or who quits. A hearing was conducted, at which testimony, evidence and arguments were presented. The Labor Commissioner found Noble was employed by defendants as a chef under an oral agreement, from November 29, 2002, until February 28, 2003, when Noble quit. Noble did not give advance notice of his intent to quit, did not return for his final paycheck after 72 hours (as set forth by statute), and did not provide a mailing address, and he was therefore not entitled to statutory penalties. Noble performed services for defendants at the residences of the corporate officers by preparing dishes to be used in the restaurant, assisting in the development of menus, cooking, and cleaning. He lived for free at the Drapers' residence. He helped with preopening duties before the restaurant opened, and then helped supervise employees and performed other duties of a chef. He was not an exempt managerial employee. Noble did not prove his claimed pay rate. Defendants admitted a weekly pay rate of $300 but failed to maintain time and payroll records. The Labor Commissioner ordered defendants to pay Noble $5,760 in back wages, plus $600 in interest.
The ODA regarding Hernandez said he filed a claim for wages of $48,541, plus wages under section 226.7 for failure to provide meal breaks, plus interest, plus the penalty under section 203. A hearing was held at which testimony, evidence, and arguments were presented. The ODA found Hernandez was employed by defendants as executive chef under an oral agreement, from January 18, 2003, until May 27, 2003, when Hernandez quit without notice. He did not return for his last paycheck or leave a mailing address and was therefore not entitled to penalties. The promised rate of compensation was $30,000 per year (less than Hernandez was claiming), with a promised raise once legal resident status was obtained. He performed services at the residence of defendant's corporate officers by preparing dishes to be used in the restaurant, organizing and writing menus, setting up presentation dishes, developing a recipe book, shopping for items and food for the restaurant, and other preopening duties. When the restaurant opened, Hernandez supervised up to 40 staff members, interviewed and trained employees, prepared menus, decorated food for presentation, ordered items, *Page 818 and made out purchase orders. He performed the duties of an exempt manager or executive employee and was therefore not entitled to the overtime he claimed. He admitted he signed and received cash for checks written to "Cesar Cisneros." Deducting that amount, the hearing officer found defendants owed Hernandez wages totaling $8,182, plus interest.3
The trial court initially rejected the special defense of res judicata, but later accepted it, as described in the trial court's written order (which was incorporated by reference in the ensuing judgment): "The Defendants contend that because of the previous decisions of the State Labor Commissioner as to the Plaintiffs, they are precluded from relitigating any issue that was raised and decided in any prior proceedings or that could have been litigated in their original complaints with the Labor Commissioner's office. [Citation.] Counsel for the Defendants additionally raised the contention that under multiple legal theories on which recovery might be predicated one injury gives rise to only one claim for relief citing Slater v. Blackwood (1975)
The trial court also issued a written order granting judgment on the pleadings as to the eighth count (intentional infliction of emotional distress), stating, "The court noted that you cannot tell from the pleadings where the events alleged took place, the identity of the person complained of, and did not put anyone on notice about who did what or when or where. Counsel for the Plaintiffs . . . stated for the record that the Plaintiffs did not know who committed the actions complained of."
Plaintiffs appeal from the ensuing "JUDGMENT ON PRETRIAL ORDERS," which stated (1) Salazar's claims were dismissed with prejudice at his request; (2) Moreno's contract claims (first, second, and third counts) were dismissed with prejudice at his request; (3) the fourth, fifth, sixth, and seventh counts were dismissed under the doctrines of res judicata and collateral estoppel; and (4) judgment on the pleadings was entered in favor of defendants on the eighth count for intentional infliction of emotional distress.
On appeal from a motion granting judgment on the pleadings, we accept as true the facts alleged in the complaint and review the legal issues de novo. (Angelucci v. Century Supper Club (2007)
II. Res Judicata/Collateral Estoppel
Plaintiffs contend the trial court erred in concluding that res judicata and collateral estoppel barred the claims for fraud, negligent misrepresentation, false advertising, and the derivative unfair business practices claim (collectively, the misrepresentation claims). We shall conclude collateral estoppel does not apply here (except as to Moreno, whom we discuss post.) As to the claim preclusion aspect of res judicata, we shall conclude that, even assuming defendants are correct that the wage claims and misrepresentation claims involved the same primary right, res judicata does not apply because the Labor Commissioner lacked jurisdiction over the misrepresentation claims. *Page 820
A. Noble and Hernandez
(1) "`Res judicata' [claim preclusion] describes the preclusive effect of a final judgment on the merits. Res judicata . . . prevents relitigation of the same cause of action in a second suit between the same parties or parties in privity with them. Collateral estoppel [issue preclusion] `precludes relitigation of issues argued and decided in prior proceedings.' [Citation and fn. omitted.] Under the doctrine of res judicata, if a plaintiff prevails in an action, the cause is merged into the judgment and may not be asserted in a subsequent lawsuit; a judgment for the defendant serves as a bar to further litigation of the same cause of action. [¶] A clear and predictable res judicata doctrine promotes judicial economy. Under this doctrine, all claims based on the same cause of action must be decided in a single suit; if not brought initially, they may not be raised at a later date. `"Res judicata precludes piecemeal litigation by splitting a single cause of action or relitigation of the same cause of action on a different legal theory or for different relief."' [Citation.]" (Mycogen Corp. v. Monsanto Co. (2002)
Whereas res judicata bars claims that could have been raised in the first proceeding regardless of whether or not they were raised (TorreyPines Bank v. Superior Court (1989)
Res judicata and collateral estoppel can be applied to administrative decisions generally. "[U]nless a party to a quasi-judicial administrative agency proceeding challenges the adverse findings made in that proceeding, by means of a mandate action in superior court, those findings are binding in later civil actions." (Johnson v. City of Loma Linda
(2000)
Res judicata and collateral estoppel additionally have specific application to Labor Commissioner decisions on wage claims under section 98, by virtue *Page 821 of section 98.2, 6 which gives the administrative order the force of a final, binding judgment in the event (as was the case here) the losing party does not seek judicial review of the administrative order.7
However, res judicata will bar a lawsuit only if the claim could have been raised in the prior proceeding. (People v. Damon (1996)
Here, defendants have failed to show the Labor Commissioner had jurisdiction to adjudicate the claims plaintiffs allege in this lawsuit — fraud, negligent misrepresentation, false advertising, and a statutory claim of unfair business practices under the Business and Professions Code, all arising from defendants allegedly inducing plaintiffs to enter an employment contract. The jurisdictional authority for the claims that were administratively adjudicated is found in section 98, 8 which is limited to claims for "wages, penalties, and other demands for compensation properly before the division [Division of Labor Standards Enforcement] or the Labor Commissioner. . . ."
Administrative agencies have only such powers as have been conferred on them, expressly or by implication, by Constitution or statute. (Ferdigv. State Personnel Bd. (1969)
Defendants rely on section 96, subdivision (d) (fn. 4, ante), which on its face does not give the Labor Commissioner authority to adjudicate misrepresentation claims but rather calls for the Labor Commissioner to"take assignment" of claims for misrepresentation of conditions of employment.
Even assuming for the sake of argument that plaintiffs' claims for fraud in the inducement could be characterized as "conditions of employment," section 96 does not confer jurisdiction on the Labor Commissioner to adjudicate claims arising outside the Labor Code but rather, as courts have described the statute, calls for the Labor Commissioner "`to take assignment of employee claims with the authority to resolve all matters within its jurisdiction.'" (Post v. Palo/Haklar Associates (2000)
There is a difference between assignment and jurisdiction to adjudicate. An assignment is a "transfer or setting over of property, or of some right or interest therein, from one person to another. . . ." (Ballentine's Law Diet. (3d ed. 1969) p. 100; see also Black's Law Diet. (7th ed. 1999) p. 115 [assignment is a transfer of rights].)
Section 96 does not confer jurisdiction to adjudicate but rather authorizes the Labor Commission to assert assigned rights on employees' behalf. This statute was discussed in Barbee v. Household AutomotiveFinance Corp. (2003)
Thus, the authority "to take assignment" is not necessarily coextensive with jurisdiction to adjudicate. Resnik (which held a real estate salesperson claiming an unpaid commission was an employee) was cited with approval by Post, supra,
In determining whether section 96 confers jurisdiction on the Labor Commissioner to adjudicate the claims mentioned in the statute, we have in mind that, "A court does not determine the meaning of a statute from a single word or sentence but in context; provisions relating to the same subject must be harmonized to the extent possible. [Citation.]" (Peoplev. Anderson (2002)
Section 95 broadly provides that the Division of Labor Standards Enforcement, of which the Labor Commissioner is chief (§§ 21, 79) "may enforce the provisions of this code and all labor laws of the state the enforcement of which is not specifically vested in any other officer, board or commission."
The Labor Code contains various provisions, some which authorize the Labor Commissioner to represent employees in court actions against *Page 824 employers, and others which authorize the Labor Commissioner (or a designee) to adjudicate claims. Thus, for example, section 98.310 provides the Labor Commissioner "may prosecute" actions, for employees unable to hire counsel, to collect wages, penalties, demands, return of workers' tools, etc. In contrast, the Labor Commissioner's jurisdiction to adjudicate the claims that were administratively adjudicated in this case is found in section 98 (fn. 8, ante), which states the Labor Commissioner or a designee "shall have the authority to investigate employee complaints" and "may provide for a hearing in any action to recover wages, penalties, and other demands for compensation properly before the division or the Labor Commissioner, including orders of the Industrial Welfare Commission, and shall determine all matters arising under his or her jurisdiction."
Sections 96 and 98 both appear in the same chapter of the Labor Code (div. 1, ch. 4, Division of Labor Standards Enforcement, §§ 79-107), which also includes section 98.8, authorizing the Labor Commissioner to promulgate regulations to carry out the chapter's provisions. The regulations contain provisions specifically governing the conduct of hearings by the Labor Commissioner under section 98, with no mention of section 96. (Cal. Code Regs., tit.
That section 96 does not address administrative adjudication is apparent from some of the items listed in the statute. Thus, section 96, subdivision (i), refers to workers' compensation awards which remain unpaid after they have become final. Such awards (which were under the exclusive jurisdiction of the Workers' Compensation Appeals Board under § 3602) require no adjudication but only enforcement. Other items listed in section 96 (wage claims and bonds) have separate statutory sources for administrative hearings, such as section 98 (for "wages, penalties, and other demands for compensation") and section 96.5 (which provides the Labor Commissioner "shall conduct such hearings as may be necessary for the purpose of Section
In sum, we see nothing in section 98, or even section 96, giving the Labor Commissioner jurisdiction to adjudicate tort claims involving conduct that predated the employment relationship or unfair business practice claims under the Business and Professions Code.
Indeed, to conclude that the Legislature gave the Labor Commissioner jurisdiction of such claims would be odd, given the informal nature of the section 98 proceeding. Thus, section 98, subdivision (a), states, "It is the intent of the Legislature that hearings held pursuant to this section be conducted in an informal setting preserving the right of the parties." In a section 98 hearing, "the pleadings are limited to a complaint and an answer; the answer may set forth the evidence that the defendant intends to rely on, and there is no discovery process. . . . (§ 98.) The commissioner must decide the claim within 15 days after the hearing. (§ 98.1.)" (Cuadra v. Millan (1998)
In our view, the informal section 98 hearing process, which lacks even the basic rudiments of pretrial discovery, is not designed to adjudicate preemployment claims for fraud and misrepresentation.
We conclude the Labor Commissioner did not have jurisdiction to decide the misrepresentation or unfair business practice claims alleged in *Page 826
plaintiffs' complaint. Accordingly, the claim preclusion aspect of res judicata does not bar plaintiffs' complaint.11 (People v. Damon,supra,
Although the claim preclusion aspect of res judicata does not apply, we briefly consider whether the judgment can be affirmed on a ground not urged by defendants on appeal, i.e., collateral estoppel based on the Labor Commissioner's findings that Noble and Hernandez quit. It does not appear that the findings they quit were essential to the Labor Commissioner's decisions. The identity of issues requirement of collateral estoppel asks whether identical factual allegations are at stake in the two proceedings, not whether ultimate issues or dispositions are the same. (Lucido v. Superior Court (1990)
We conclude res judicata does not bar the fourth, fifth, six, and seventh counts for fraud, negligent misrepresentation, false advertising, and unfair business practices, with respect to Noble and Hernandez.
We stress our opinion does not suggest the complaint has any merit. We merely hold this was not the way to dispose of it. *Page 827
B. Moreno
Plaintiffs contend the trial court erred in dismissing Moreno's claims for misrepresentation and unfair business practices on the ground the administrative tribunal found he had no employment relationship with defendants.13 They do not dispute the finality of the administrative decision, and they do not dispute that the unchallenged administrative determination of no employment relationship precludes Moreno from relitigating the issue of employment. (§ 98.2; fn. 6, ante [failure to seek trial de novo results in binding judgment]; see also generallyJohnson v. City of Loma Linda, supra,
III. Intentional Infliction of Emotional Distress
Plaintiffs contend the trial court erred in granting judgment on the pleadings as to the eighth count for intentional infliction of emotional distress, even though plaintiffs on the date set for trial were unable to identify the person who allegedly placed a threatening phone call to deter Joaquin Noble from attending the Labor Commissioner hearing. We shall conclude the contention lacks merit.
A motion for judgment on the pleadings may be made at any time up to and including the time of trial, and may be made on the same grounds as a demurrer (Stoops v. Abbassi (2002)
The eighth cause of action for intentional infliction of emotional distress alleged that on March 11, 2004, four days before the administrative hearing date before the Labor Commissioner, "an individual associated with defendants" called Maria Noble by telephone and warned her that Joaquin Noble should not appear to testify against defendants. The caller allegedly revealed he knew the Nobles' address and the name of their daughter and allegedly threatened that if Joaquin testified, Maria's daughter would be injured.
The eighth count alleged the "acts and omissions of each of the Defendants" were intentional. However, the eighth count did not allege any acts or omissions by defendants. Instead, it alleged only acts by "an individual associated with defendants."
When the case came on for trial, defendants moved for judgment on the pleadings, on the grounds the complaint was uncertain as to who was alleged to have made the alleged call and whether it took place in Mexico (raising jurisdictional issues).
As observed by the trial court in granting judgment on the pleadings, the complaint did not allege that defendants authorized or even knew about the alleged call. The Nobles' counsel admitted to the trial court that the Nobles had no idea who made the alleged call. We reiterate this admission was made after the discovery stage of the case, when the case was called for trial. Thus, although the matter was raised in a motion styled as a motion for judgment on the pleadings, the Nobles wanted to go to trial with no evidence *Page 829 whatsoever as to who made the alleged call, or whether it was made with the knowledge or consent of defendants. The Nobles' theory was that the only persons who would benefit from the alleged threat were defendants and therefore they must be liable.
On appeal, the Nobles argue the trial court erred, because the "pertinent question is whether [defendants] had sufficient notice to investigate the claim. . . ." The Nobles claim it does not matter that they cannot identify the caller, because the "circumstances" suffice to identify the person's association with defendants. Borrowing from defamation law, the Nobles cite authority that if (defamatory) statements do not identify the defamed person by name, it is sufficient (and necessary) for the defamed person to allege in his or her defamation lawsuit that the words were spoken about him or her (colloquium).
In response, defendants correctly point out this is not a defamation case, and the defamation law principle of colloquium has no application to this case. Indeed, the Nobles admit this in their reply brief, by criticizing defendants for discussing defamation law in their respondents' brief, even though it was the Nobles who tried to inject defamation law into this case in their opening brief.
The problem for the Nobles is that they think they have enough to go to a jury based on their assumption that defendants must have had something to do with the alleged phone call because the alleged phone call was intended to benefit defendants. However, the Nobles' assumption is false. The fact that a person benefits from something does not mean he had anything to do with it. A friend acting on his/her own may have done it in a misguided attempt to help the person. An enemy may have done it in an attempt to get the person in trouble. A friend or enemy of therecipient of the phone call may have done it as a misguided joke or for purposes of mischief.
This is why the complaint was uncertain, and the case does not present a jury question. It is not enough to allege that a person "associated with defendants" made a call without also alleging (and proving) that defendants knew about and authorized the call. Thus, contrary to the Nobles' argument, they have not presented a question for the jury to decide.
We conclude the trial court correctly dismissed the eighth count for intentional infliction of emotional distress.
Plaintiffs Joaquin Noble and Jose Antonio Hernandez shall recover their costs from defendants. (Cal. Rules of Court, rule 8.278(a)(1).) As to the other plaintiffs, they and defendants shall bear their own costs. (Cal. Rules of Court, rule 8.278(a)(5).)
Morrison, J., and Cantil-Sakauye, J., concurred.
"(e) The Labor Commissioner shall file, within 10 days of the order becoming final pursuant to subdivision (d), a certified copy of the final order with the clerk of the superior court of the appropriate county unless a settlement has been reached by the parties and approved by the Labor Commissioner. Judgment shall be entered immediately by the court clerk in conformity therewith. The judgment so entered has the same force and effect as, and is subject to all of the provisions of law relating to, a judgment in a civil action, and may be enforced in the same manner as any other judgment of the court in which it is entered."
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