Department 58

Hearing Date: July 31, 2024

Case Name: Escalera v. Saberi

Case No.: 23STCP04162

Motion: Motion to Vacate Judgment on Final Decision of the Labor Commissioner

Moving Party: Non-Party Labor Commissioner

Responding Party: Plaintiff Rachelle Escalera

Tentative Ruling: The motion to vacate the judgment is denied.

Background

On November 8, 2023, the Labor Commissioner filed a Request that the Clerk Enter Judgment on an award the Commissioner had rendered in favor of plaintiff Rachelle Escalera (“Plaintiff”) against defendant Sean Saberi (“Defendant”). Plaintiff’s initial claim before the Commissioner was for more than $90,000.00, and the Commissioner awarded her more than $125,000.00. For unexplained reasons, the ultimate judgment was for $47,636.87. (Lab. Commr. Order (“LCO”), pp. 1, 11-12 [attachment to Petition].)

Defendant did not appear before the Commissioner for the hearing on Plaintiff’s claim. (Id., at p. 5.) Defendant has also made no appearance in this case.

The clerk entered judgment in Plaintiff’s favor on November 13, 2023 for $47,636.87.

On January 31, 2024, the Commissioner filed an “Application and Order to Vacate Judgment on Final Order of the Labor Commissioner”. The Commissioner did not attempt to set a hearing on its Application, and the Court took no action.

On June 13, 2024, the Commissioner filed this noticed motion to vacate the judgment entered in November 2023.

On July 16, 2024, Plaintiff, the judgment creditor, filed a memorandum opposing the Commissioner’s motion.

Legal Standard

“[California’s] Labor Commissioner is authorized to investigate employee complaints. The Labor Commissioner may provide for a hearing in any action to recover wages, penalties, and other demands for compensation, including liquidated damages ... , and shall determine all matters arising under his or her jurisdiction. The Labor Commissioner may also provide for a hearing to recover civil penalties due pursuant to Section 558 against any employer or other person acting on behalf of an employer, including, but not limited to, an individual liable pursuant to Section 558.1. ... .” (Lab. Code, § 98(a).)

If the Commissioner hears an employee complaint and makes a determination, then “[t]he 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 ... . 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. Enforcement of the judgment shall receive court priority.” (Id., § 98.2(e).)

Discussion

The Commissioner’s motion is denied.

Upon a final determination, the Labor Commissioner must confirm the judgment for a prevailing plaintiff. (See Lab. Code, § 98.2(e) [Commissioner shall obtain final judgment within ten days of its determination].) The statute that imposes this obligation on the Commissioner does not grant it any special rights to modify or challenge the judgment after the fact. In fact, the Commissioner cannot enforce the judgment, much less vacate it, after entry without a plaintiff/employee’s consent. (See id., § 98.6(a) [Commissioner “may, with the consent of any employee in whose favor the judgment is entered, collect any outstanding amount ...” (emphasis added)].)

The Commissioner had a special statutory authority and obligation to enter judgment on Plaintiff’s behalf. But it cites no authority for the proposition that it maintains any rights over the judgment thereafter.

Also, the Commissioner relies on Code of Civil Procedure section 473(b). It appears to argue that because the Commissioner was mistaken to proceed with its determination, the Court should grant the Commissioner relief. But the plain language of section 473 permits the Court to “relieve a party ... from a judgment ... taken against him or her through his or her mistake, inadvertence”, etc. (Code Civ. Proc., § 473(b) (italics added).) The Commissioner is not a party; there is no judgment taken against the Commissioner; and the Commissioner does not attest that the judgment debtor committed any mistake.

Even if Defendant petitioned for relief on his own behalf, the petition would be premature. The Labor Code requires that a defaulted respondent in a Commissioner hearing apply to the Commissioner under section 473 before he may apply to the Court. (See Lab. Code, § 98(f).) “No right to relief [under section 473], including the claim that the findings or award of the Labor Commissioner or judgment entered thereon are void upon their face, shall accrue to the defendant in any court unless prior application is made to the Labor Commissioner ... .” (Ibid.) So although the Defendant might have standing to seek relief, there is a condition precedent that has not been satisfied.

The Commissioner’s point is well-taken that Defendant’s bankruptcy throws the present enforceability of the judgment into question. However, a judgment entered against a debtor in bankruptcy is not void, but voidable – and it is only voidable by the bankrupt debtor (not creditors or third parties). (See Danko v. O’Reilly (2014) 232 Cal.App.4th 732, 748 [“ ‘[i]f the debtor or trustee chooses not to invoke the protections of the automatic stay, no other party may attack any act in violation of the automatic stay’ ”].)

“ ‘ “[A] voidable contract is one which may be rendered null at the option of one of the parties, but it is not void until so rendered.” ’ ” (Guthman v. Moss (1984) 150 Cal.App.3d 501, 509-510.) Here, the bankrupt debtor has not petitioned for relief. In fact, the only party appearing is the judgment creditor, who contends the judgment should not be vacated.

Neither the Labor Code nor Code of Civil Procedure section 473 gives the Commissioner special standing to vacate the judgment. And even if it is voidable due to the debtor’s bankruptcy, it is not void.

Conclusion

The motion to vacate the judgment is denied.