Fierro v. Landry's Rest. Inc.
Fierro v. Landry's Rest. Inc.
Opinion of the Court
*654*328Plaintiff Jorge Fierro filed the underlying action against defendant Landry's Restaurant Inc.,
As to Fierro's individual claims, the trial court overruled the demurrer, concluding that the statute of limitations defense did not appear affirmatively on the face of the complaint. As to the class claims, the trial court sustained the demurrer without leave to amend on the basis that a prior class action with identical class claims against Landry's had been dismissed for failure to bring the case to trial in five years as required by Code of Civil Procedure
*329The trial court erred. As we explain, from the record presented, we do not know the basis of the dismissal of the prior action; and, in any event, because the dismissal of the prior action is not final for purposes of res judicata or collateral estoppel, it cannot form the basis of a defense to the class claims in the present action. As we further explain, because we agree with the trial court that the statute of limitations defense does not appear affirmatively on the face of the complaint, *655there is no alternative basis on which to affirm the dismissal of the class claims. Accordingly, we will reverse and remand with instructions to enter an order overruling Landry's' demurrer in its entirety.
I.
FACTUAL AND PROCEDURAL BACKGROUND
In this appeal following the sustaining of a demurrer, we assume the truth of the properly pleaded factual allegations, facts that reasonably can be inferred from those expressly pleaded, and matters of which judicial notice has been taken. ( Schifando v. City of Los Angeles (2003)
In the present case, without identifying any specific document, the trial court took judicial notice "of the documents pertaining to the matter known *330as Martinez v. Joe's Crab Shack , L.A. Superior Court Case No. BC377269 [
We take judicial notice of the same Martinez documents that were judicially noticed by the trial court.
A. The Martinez Action
In September 2007, Roberto Martinez filed the Martinez action, seeking to represent *656a class of salaried managerial employees who worked at Joe's Crab Shack restaurants in California. In three causes of action, Martinez alleged claims for: overtime pay on the basis that class members had been misclassified as exempt employees; and violations of law or regulations related to meal and rest periods and to wage statements. Martinez identified the original defendant as Joe's Crab Shack, Inc., and in a March 2008 amendment substituted Landry's Restaurant, Inc., for Doe 2.
In an October 2008 first amended complaint, Martinez, individually and on behalf of a class of unnamed members, asserted six causes of action against Joe's Crab Shack, Inc.
In March 2010, the Martinez trial court denied without prejudice Martinez's motion for class certification on the ground that Martinez was not an adequate class representative. Martinez did not appeal that order.
*331On the same day, the court allowed Martinez to file a second amended complaint that named Martinez, Lisa Saldana, and Steven Kauffman as the plaintiffs and class representatives and named Joe's Crab Shack, Inc., as the defendant.
In a November 2010 third amended complaint, the court allowed Craig Eriksen and Chanel Rankin-Stephens to join Martinez, Saldana, and Kauffman as named plaintiffs and class representatives against defendant Joe's Crab Shack, Inc. By the time of the plaintiffs' motion to certify the class in June 2011, Kauffman was no longer a plaintiff, and the defendants included Crab Addison, Inc., Ignite Restaurant Group, Inc., and Landry's Restaurants, Inc.
Martinez, Saldana, Eriksen, and Rankin-Stephens moved to certify a plaintiff class consisting of " '[a]ll persons employed by Defendants in California as a salaried restaurant employee in a Joe's Crab Shack restaurant at any time since September 7, 2003.' " In May 2012, the Martinez court denied the motion, ruling that the plaintiffs had failed to establish: that their claims were typical of the class; that they could adequately represent the class; that common questions predominated the claims; and that a class action was the superior means of resolving the litigation.
The Martinez plaintiffs appealed, and in November 2014 the Court of Appeal reversed the order denying class certification, in a published opinion, Martinez v. Joe's Crab Shack Holdings (2014)
By judgment filed in August 2016, the Martinez court dismissed with prejudice all of the claims in the Martinez action and awarded costs to the three named defendants. We do not know what, if anything, happened to the class claims in Martinez prior to the dismissal.
Within days of the dismissal of Martinez , Fierro filed the present action on August 29, 2016. Fierro asserts individual and class claims based on the underlying allegation that Landry's "improperly and illegally mis[ ]classified" Fierro and the members of the class "as 'exempt' managerial/executive employees when, in fact, they were 'non-exempt' non-managerial employees according to California law." According to Fierro, under theories alleged in five causes of action, this misclassification entitles him and the class he seeks to represent to recover unpaid wages and penalties. Fierro defines the alleged class as: "All California based salaried restaurant employees 1) who worked at any time from September 7, 2003 until the date of class certification at any of the restaurants in the State of California owned, operated and/or acquired by defendants." (Sic .)
Fierro alleges that he worked for Landry's as a salaried restaurant employee "within four years prior to the filing of" the Martinez action.
"The filing of [the Martinez action] on September 7, 2007[,] has tolled the statute of limitations as to [Fierro] and the class he seeks to represent . The class period covered by this Complaint based on the tolling of the statute by [ Martinez ] is September 7, 2003[,] to the present." (Italics added.)
Landry's describes the present action as Fierro's attempt "to revive the same class claims from Martinez covering the exact same class period."
Disagreeing with Fierro's allegation regarding the tolling of the applicable statutes of limitations, Landry's demurred to each cause of action in Fierro's complaint on the basis that each "is barred by the statute of limitations."
*333First, Landry's acknowledges that the filing of a class action tolls the running of the applicable statutes of limitations as to the individual claims of all putative class members until class certification is denied-after which time all unnamed class *658members may either seek to intervene in the surviving individual case or file a new action. Our Supreme Court has summarized this tolling principle as follows: "[U]nder limited circumstances, if class certification is denied, the statute of limitations is tolled from the time of commencement of the suit to the time of denial of certification for all purported members of the class who either make timely motions to intervene in the surviving individual action ( [ American Pipe & Construction Co. v. Utah (1974)
Second, according to Landry's, regardless of the application of American Pipe tolling, the class claims fail for another reason. Landry's argues that, because the Martinez action-including the class claims-was dismissed for failure to bring the action to trial within five years under section 538.310 et seq., the class claims cannot be resurrected in a new action. Landry's contends that American Pipe tolling is an equitable doctrine that does not affect the express statutory language which makes a dismissal under section 538.360 "mandatory and ... not subject to extension, excuse, or exception except as expressly provided by statute," upon the requisite showing. (§ 538.360, subd. (b).)
Following an opposition by Fierro, a reply by Landry's, and oral argument, the superior court overruled the demurrer as to Fierro's individual claims and sustained the demurrer without leave to amend as to Fierro's class claims. After applying American Pipe tolling, the court determined that Landry's did not establish as a matter of law that the pertinent statutes of limitations barred any of Fierro's claims.
Fierro timely appealed from the February 3, 2017 order overruling the demurrer as to Fierro's individual claims and sustaining the demurrer without leave to amend as to Fierro's class claims. Under the death knell doctrine, we have jurisdiction to review that portion of the order sustaining the demurrer as to the class claims. (See fn. 4, ante .)
II.
DISCUSSION
The sole issue on appeal is whether the trial court erred in sustaining without *659leave to amend the class claims in the complaint.
"In reviewing an order sustaining a demurrer, we examine the operative complaint de novo to determine whether it alleges facts sufficient to state a cause of action under any legal theory." ( T.H. v. Novartis Pharmaceuticals Corp. (2017)
As we explain, the trial court erred in applying the section 583.360 dismissal of the Martinez action as a bar to Fierro's class claims. As we further explain, on the present record, Landry's did not establish as a matter of law that the applicable statutes of limitation barred Fierro's class claims.
A. The Dismissal of the Martinez Action Is Not a Basis on Which to Have Dismissed the Class Claims in the Present Action
The trial court ruled that, because the Martinez court dismissed the same class claims as Fierro alleges in the present action pursuant to section 583.360 (for failure to have brought the action to trial within five years, in violation of § 583.310 ), the class claims in the present action are barred. As proffered by *335Landry's and accepted by the trial court, the reasoning behind such a ruling is that the equitable principles associated with the application of American Pipe tolling cannot revive claims that were dismissed under a statute that does not allow for exceptions unless "expressly provided by statute ." ( § 583.360, subd. (b), italics added ["The requirements of this article are mandatory and are not subject to extension, excuse, or exception except as expressly provided by statute."].)
Neither the facts nor the law supports the trial court's ruling.
Factually, the record does not suggest-let alone establish by properly pleaded factual allegations or matters of which judicial notice has been taken-that the Martinez action was dismissed under section 583.360. In the trial court and on appeal, both Landry's and Fierro state that the failure to prosecute was the basis of the dismissal in Martinez . However, in support of this statement on appeal, both Landry's and Fierro cite exclusively to the Martinez judgment which provides only that the claims were "dismissed with prejudice"; there is no mention of the basis of the dismissal.
That said, Fierro, Landry's, and the trial court all have proceeded with the understanding that the Martinez action was dismissed under section 583.360 for failure to have brought the action to trial within five years. Even if we assume that the record supports that factual understanding, the result is no different as a matter of law for at least two independent reasons.
First, a "judgment dismissing the prior action for want of prosecution is not one upon the merits [citations] and it does not bar a subsequent action upon the same cause." ( Lord v. Garland (1946)
Second, "a judgment that is on appeal is not final for purposes of applying the doctrines of [res judicata and collateral estoppel]." ( Boblitt v. Boblitt (2010)
For the foregoing reasons, the trial court erred in ruling that, based on the dismissal of the Martinez action, section 583.310 et seq. bar the class claims in the present action.
B. Application of American Pipe Tolling Is Not a Basis on Which to Dismiss the Class Claims in the Present Action
Because we review the ruling of the trial court, not the reasons therefor ( Rappleyea, supra , 8 Cal.4th at pp. 980-981,
In the complaint, Fierro alleges that the filing of the Martinez action on September 7, 2007, "has tolled the statute of limitations as to [Fierro] and the class he seeks *661to represent. The class period covered by this Complaint based on the tolling of the statute by [ Martinez ] is September 7, 2003[,] to the present." Without tolling, according to Landry's, the applicable statutes of limitation bar each of the class claims Fierro alleges in his complaint.
Before we determine whether application of the American Pipe tolling doctrine saves the class claims, we summarize the relevant events and the specific dates on which they occurred, as follows:
*337• September 7, 2007-Martinez files the Martinez action;
• March 12, 2010-the Martinez trial court denies without prejudice Martinez's motion to certify the plaintiff class on the basis that he is not an adequate class representative;
• March 12, 2010-Martinez files a second amended complaint adding two new plaintiff class representatives, Saldana and Kauffman;16
• November 23, 2010-Martinez, Saldana, and Kauffman file a third amended complaint adding two named plaintiff class representatives, Eriksen and Rankel-Stephens;17
• May 23, 2012-the Martinez court denies the plaintiffs' motion to certify the class;
• July 13, 2012-the Martinez plaintiffs appeal from the order denying their motion to certify the class;
• November 10, 2014-the Court of Appeal reverses the order denying class certification and directs the Martinez court to reconsider whether to certify the class under a different standard;
• August 24, 2016-the Martinez court enters a judgment dismissing the action with prejudice; and
• August 29, 2016-Fierro files the present action
We have assumed that the applicable statutes of limitations for the claims in Fierro's complaint are between one and four years. (See fn. 10, ante .)
Landry's argument on appeal is straightforward: Once the Martinez court denied Martinez's initial motion to certify the plaintiff class in March 2010 , the statutes of limitations on Fierro's class claims began to run; and Fierro did not file the present action until August 2016 , more than four years later.
*338Landry's relies on the following language from Jolly, supra,
Two policy considerations underlie whether American Pipe tolling will apply. ( Jolly, supra, 44 Cal.3d at pp. 1121-1122,
We must consider these potentially conflicting policies-i.e., protecting the overall efficiency and economy of litigation, on the one hand, and protecting the defendant from unfair (even if arguably tardy) claims, on the other hand-in the context of the procedures involved. Here, we are concerned with the effect of an appeal and the effect of an amended complaint on the amount of time that will be tolled.
Citing federal authorities, Landry's argues that American Pipe tolling ends upon the trial court's initial denial of class certification; i.e., tolling does not continue during the pendency of an appeal from the order denying certification. (See, e.g., Giovanniello v. ALM Media, LLC (2d Cir. 2013)
*339Critically, in federal court, the trial court's denial of class certification is an interlocutory order, not reviewable as of right until after the entry of final judgment. (See Coopers & Lybrand v. Livesay (1978)
The two court systems also treat an order denying class certification differently for purposes of the bar associated with res judicata or collateral estoppel. In federal court, "a judgment or order, once rendered, is final for purposes of res judicata until reversed on appeal or modified or set aside in the court of rendition." ( Martin v. Martin (1970)
The point of these distinctions is to emphasize that the federal cases on which Landry's relies are based on federal procedure *663that is contrary to California law.
In the federal system, because there can be no appellate review of an order denying class certification until after entry of a final judgment in the class action, there can be years of delay-including potentially a trial on the merits of the individual claims-before the parties have the benefit of appellate review of the denial of class certification. Under such a procedure, the policy of protecting the efficiency and economy of litigation is not furthered by the continuation of tolling-first, pending resolution of the remaining claims in the trial court and, then, pending review and disposition in the appellate court.
In contrast, in our state system, the death knell doctrine allows the parties the benefit of immediate appellate review of an order denying class certification. This procedure advances the efficiency and economy of class action *340litigation. Stated differently, neither efficiency nor economy will result if, upon the denial of class certification, an unnamed class member is required either to seek intervention in the individual action that remains in the trial court or to file a new action while an immediate appeal of the order denying class certification is pending . Thus, in both the state and federal systems, once the trial court denies certification, the putative class member is on notice that he or she must take action to protect his or her rights; however, in the state system, there is a right to immediate review of that decision, and to deny American Pipe tolling under such circumstances is to encourage a multiplicity of actions-i.e., to encourage inefficiency and expense-before the order denying class certification is final.
The differences between the two court systems, which directly affect the efficiency and economy of litigation, are further illustrated by the fact that federal courts "frequently allow successive class certification motions where a previous motion is denied ... because courts have 'broad discretion' in revisiting class certification before final judgment." ( Santomenno v. Transamerica Life Ins. Co. (C.D. Cal. 2016)
With regard to the second policy (of protecting the defendant from unfair claims), the defendant receives the notice of the claims and potential plaintiffs at the same time in both court systems-namely, when the defendant receives a copy of the class action complaint. Thus, since American Pipe tolling is authorized (in both *664federal and state courts) in certain circumstances, the determination has already been made that this policy consideration is satisfied. Extending the amount of time the class claims are tolled in the event of an appeal does not significantly affect this consideration.
Accordingly, for purposes of deciding when time is subject to American Pipe tolling, we conclude that, under California law, American Pipe tolling applies to the dismissed class claims during the pendency of an appeal from an order sustaining without leave to amend a demurrer to the class claims in a complaint.
Likewise, under the specific facts of this case-namely, where the trial court denied a motion to certify a plaintiff class on the basis that the named plaintiff was not an adequate class representative and, instead of appealing *341the order, the named plaintiff amended the complaint in an effort to provide an adequate class representative- American Pipe tolling recommences upon the filing of the amended complaint.
Finally, based on the foregoing legal rulings, we will apply American Pipe tolling to the class claims in the present case. The only time during which the class claims were not tolled is between August 24, 2016 (dismissal of the Martinez action), and August 29, 2016 (filing of the present action).
DISPOSITION
That portion of the trial court's order sustaining Landry's' demurrer without leave to amend as to Fierro's class claims is reversed, and on remand the court is instructed to enter an order overruling that portion of Landry's' demurrer directed to the class claims. Fierro is awarded costs on appeal. ( Cal. Rules of Court, rule 8.278(a)(2).)
WE CONCUR:
HUFFMAN, Acting P.J.
HALLER, J.
The complaint identifies "Landry's Restaurant Inc." as the sole named defendant. The demurrer that resulted in the order on appeal was filed on behalf of defendant "Landry's, Inc. ('Landry's'), formerly known as Landry's Restaurants, Inc." We, too, will refer to the defendant/respondent as "Landry's."
Further unidentified statutory references are the Code of Civil Procedure.
An action "shall be brought to trial within five years after the action is commenced" (§ 583.310 ); if not, then the court "shall" dismiss the action, either on its own motion or on the motion of the opposing party, after notice to the parties (§ 583.360, subd. (a) ).
Generally, the right to appeal in California is governed by the "one final judgment" rule, pursuant to which an appeal may be taken only from a final judgment in the entire action. (In re Baycol Cases I and II (2011)
In summarizing the factual and procedural background, both parties failed to support numerous factual assertions with citations, or at times accurate citations, to the record on appeal as required by California Rules of Court, rule 8.204(a)(1)(C). Our independent review of the record on appeal has not helped in finding support for some basic and many extraneous facts contained in the parties' briefs. Absent a party's accurate record reference or our independent verification, we have not considered the party's factual recitation. (Rybolt v. Riley (2018)
We take judicial notice of the existence of the documents, not the truth of the matters asserted therein. (Lindsey v. Conteh (2017)
For ease of reading, we will not use specific dates for the various events. Because the dates are potentially outcome-determinative for our analysis of Landry's' statute of limitations argument on appeal, we will include the relevant specific dates in the discussion of tolling at part II.B., post .
Neither the parties, the appellant's appendix, nor the judicially noticed documents tells us what happened to named plaintiff Kauffman or named defendant Joe's Crab Shack, Inc., or how Crab Addison, Inc., Ignite Restaurant Group, Inc., or Landry's Restaurants, Inc., became defendants.
Fierro tells us that the "Martinez trial court never got to the issue of whether class certification was appropriate"; i.e., "while the parties were preparing for class certification, the Martinez trial court dismissed the action for failure to bring the action to trial within five years after commencement pursuant to ... §§ 583.310 [ ] et seq." Landry's tells us that "[n]o class was ever certified, and the defendants in the Martinez action eventually filed a motion to dismiss the case on the grounds that the action was not brought to trial within five years after commencement." The parties have not provided record references for these statements, and our independent review of the record has not confirmed these statements; thus, we do not consider them. (See fn. 5, ante .)
Landry's tells us that Fierro "concedes within his Complaint that he did not work after September 7, 2007," citing page 6. Page 6 of Fierro's complaint contains no such allegation; Fierro alleges only that he "worked in defendants' Landry's Restaurants, Inc. restaurants in California as [a] salaried restaurant employee[ ] within four years prior to the filing" of the Martinez complaint on September 7, 2007. (Some capitalization omitted.) Accordingly, we do not consider Landry's unsupported statement. (See fn. 5, ante .)
Landry's tells us that the statutes of limitations on Fierro's claims are one, three, or four years, depending on the specific claim. Fierro does not argue otherwise. Accordingly, we accept for purposes of this appeal, without deciding, that the applicable statutes of limitations for the class claims in Fierro's complaint are between one and four years.
The court expressly limited its ruling on the statute of limitations defense to its order on Landry's' demurrer; i.e., the ruling is not a final determination on the merits of the defense.
In full, the Martinez judgment provides: "IT IS HEREBY ORDERED, ADJUDGED AND DECREED that the claims in this action of Plaintiffs Roberto Martinez, Lisa Saldana, Craig Eriksen and Chanel Rankin-Stephens, and each of them, are dismissed with prejudice, and that Plaintiffs shall take nothing by their complaint. [¶] Defendants Crab Addison, Inc. (erroneously identified as 'Joe's Crab Shack'), Ignite Restaurant Group, Inc. (formerly known as 'Joe's Crab Shack Holdings, Inc.'), and Landry's Restaurants, Inc are awarded costs against Plaintiffs costs of $______." (Sic. )
In support of this ruling, Hardy cited Lord, supra, 27 Cal.2d at p. 850,
In an argument related to whether the Martinez judgment barred Fierro's class claims, Fierro suggests that if the judgment had such a preclusive effect, he would be denied due process on the basis that he has "the right ... to bring a class action under California law." The authority Fierro cites does not support his suggestion, and given our rulings in the text, ante , we need not and do not decide whether Fierro had a due process right to bring a class action.
Since the first and second amended complaints contain the same causes of action, a reasonable inference is that Martinez added the two additional plaintiffs in an effort to proffer an adequate class representative.
Since the second and third amended complaints contain the same causes of action, a reasonable inference is that Martinez, Saldana, and Kauffman added the two plaintiffs in an effort to proffer an adequate class representative.
Alternatively, Landry's argues that, even if the statutes of limitations on the class claims did not commence until the court denied Martinez's second motion to certify the plaintiff class in May 2012 , the result is the same. Since we will conclude that, on the present record, the statutes of limitations were tolled at all times after the first denial of class certification in March 2010 and before the dismissal of the Martinez action in August 2016, the statutes of limitation were necessarily tolled also after the second denial of class certification in May 2012 and before the dismissal of the Martinez action in August 2016.
We are aware of our Supreme Court's directive that, in the absence of controlling state authority, we should look to the federal courts' application of class action law under rule 23 of the Federal Rules of Civil Procedure (28 U.S.C.) "to ensure fairness in the resolution of class action suits." (Jolly, supra, 44 Cal.3d at p. 1118,
In the present action, the trial court made a similar ruling, expressly commenting that neither party had addressed tolling under such circumstances. Notably, Landry's does not address this issue on appeal either.
For purposes of applying American Pipe tolling to Fierro's individual claims, the trial court ruled that there was no tolling between March 12, 2010 (the date on which the Martinez court denied class certification motion under the first amended complaint and the Martinez plaintiffs filed the second amended complaint), and November 23, 2010 (the date on which the Martinez plaintiffs filed their third amended complaint). Reviewing the trial court's order, we believe the court considered March 12, 2010, only as the date on which class certification was denied-mistakenly failing to consider that, on the same date, Martinez and two additional named plaintiffs filed a second amended complaint. Since the court ruled that the filing of the third amended complaint (Nov. 23, 2010), which added another two named plaintiffs , recommenced tolling following the denial of class certification, there would be no reason that the filing of the second amended complaint after denial of class certification (both occurring on Mar. 12, 2010) did not trigger further tolling.
The trial court also ruled that there was no tolling between May 23, 2012 (the date on which the court denied class certification under the third amended complaint), and July 13, 2012 (the date on which plaintiff appealed from the denial of the class certification order). We disagree. Since we have concluded that American Pipe tolling applies during the appeal from the denial of the class certification order, there is no reason for statutes of limitation to run-i.e., no reason not to toll the statutes-during the time in which an aggrieved plaintiff may appeal from such an order. Otherwise, to preserve a putative class member's individual claim, that person will have to either seek to intervene or file a new action, only to have the statutes of limitation tolled in the event the named plaintiff appeals from the denial of the certification order.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.