Judge James C. Chalfant, Case Number: 23STCP03872, Date: 2024-03-19 Tentative Ruling

Douglas Richter v. Department of Industrial Relations et al., 23STCP03872

Tentative decision on demurrer: sustained without leave to amend

Respondents California Department of Industrial Relations, Department of Labor Standards Enforcement (“DLSE”); Lilia García-Brower (“García-Brower”); Ethera Clemons (“Clemons”); Wendy Corleto (“Corleto”); Cristina Zamora (“Zamora”); and Karen Betancur (“Betancur”) demur to the Petition filed by Petitioner Douglas Richter (“Richter”).

The court has read and considered the moving papers (no opposition was filed)[1] and renders the following tentative decision.

Petitioner Richter filed the Petition against Respondents and Real Parties-in-Interest Ariela Lousky (“Lousky”) and Universal Home Design, Inc. (“Design”) on October 17, 2023, alleging (1) traditional mandamus based on procedural due process under article 1, section 7 of the California Constitution; (2) traditional mandamus based on bias of DLSE and the hearing officer; (3) traditional mandamus based on anti-discrimination protections in Government Code (“Govt. Code”) section 11135; (4) traditional mandamus based on protection of workers’ rights under Govt. Code section 11135; and (5) violation of the California Public Records Act (“CPRA”). Pet. at 15-16. The verified Petition alleges in pertinent part as follows.

García-Brower is the Labor Commissioner, Clemons is a former Chief Deputy Labor Commissioner, Corleto is a Senior Labor Hearing Commissioner, Zamora is a DSLE Regional Manager, and Betancur is a Deputy Labor Commissioner. Pet. at 1.

Lousky’s family operates a construction company. Pet. at 7. Richter started working for Lousky during the COVID-19 pandemic. Pet. at 7. Richter began renting a house from Lousky in May 2020, with a move-in date of May 26. Pet. at 7. The lease was for two years with a monthly rent of $5,500. Pet. at 5.

The house had various issues, including electrical and water intrusion that needed repairs within 72 hours for safety reasons. Pet. at 8. An electrician did not come to the house until four days after Richter moved in. Pet. at 8. A breaker exploded, and the electrician blamed Lousky for being cheap and difficult to work with before he stormed off. Pet. at 8. The explosion caused a minor fire that Richter had to put out with an extinguisher. Pet. at 7.

A few days later, in early June 2020, Lousky and her cousin tried to assert that the problems stemmed from a switch Richter wanted to install. Pet. at 8. The cousin eventually declined to conduct the repairs and Richter hired a third-party electrician to do so. Pet. at 8. Between the repairs to the house and Richter’s employment by Lousky, deductions against Richter’s rent totaled $4,519.23. Pet. at 9.

Sometime after Richter moved out of the house, Lousky built an accessory dwelling unit (“ADU”) on the property and attempted to charge Richter for it. Pet. at 6. The ADU was lawful, but the inspector falsely asserted that Richter left the property in disrepair. Under California law, ADU construction could not begin until a year after the inspection. Pet. at 6. Lousky retained an ex-felon, Andrew Mazor, to produce a forged report in an attempt to defraud the courts. Pet. at 6.

The hearing for this matter was in 2023. Pet. at 10. Richter did not receive all of Lousky’s evidence and exhibits before the hearing. Pet. at 9. At the hearing, Lousky gave conflicting testimony about the repairs and reimbursement and tried to downplay the severity of issues with the house. Pet. at 9.

Hearing officer Clemons let Lousky testify as to whatever she chose but insisted that Richter’s testimony had to be relevant. Pet. at 10. She wrote down parts of Lousky’s testimony to keep track of relevant facts and did not do the same for Richter. Pet. at 10. She interrupted Richter’s testimony and attempted to fit his answers into a manufactured narrative. Pet. at 9.

Instead of interpreting wage and hour regulations to protect the employee, Clemons tried to protect Design. Pet. at 9-10. This reflected bias, possibly because of an incident three years ago where an employer filed a claim against Richter before DLSE. Pet. at 9. Someone in the DLSE later told him that the agency knew the claim was fraud, but he was still told to just pay the amount the claimant requested. Pet. at 9. Richter may also be part of the reason the Legislature is currently investigating DLSE. Pet. at 31.

The Order, Decision, and Award (“ODA”) denying unpaid wages and reimbursements had various clerical, calculation, and factual errors. Pet. at 3, 5. Richter moved for DLSE to correct these errors. Pet. at 5. DLSE denied the request but did not deny that the ODA had such errors. Pet. at 5. It also told Richter that his motion did not toll the deadline for appeal of the ODA to the superior court. Pet. at 5.

Under Title 22 of the California Code of Regulations (“22 CCR”), a decision issued by an administrative law judge (“ALJ”) may not be changed except to correct a clerical error. 22 CCR §5069(a). Pet. at 22. In In the Matter of the nunc pro tunc Request for Review of: S. C. Clemons, Inc. (“Clemons”), Case No. 15-0409-PWH, the hearing officer chose to modify the decision to correct a clerical error rather than let the error stand. Pet. at 26.

If an ALJ amends a decision based on clerical error, the time within which to file any board appeal begins anew upon service of an order correcting a clerical error or a corrected decision or order. 22 CCR §5069(d). Pet. at 23. Based on this, Richter requests correction of the clerical errors in the ODA to reflect actual figures supported by the evidence and take into consideration facts that were proven during the hearing. Pet. at 23.

Labor Code section 98 limits the scope of hearing held by the Labor Commissioner to matters properly before its division. Pet. at 23.

Under Govt. Code section 11519(a), an administrative decision becomes effective 30 days after it is delivered or mailed to respondent unless a reconsideration is ordered or a stay of execution granted by then, or the agency itself orders that the decision shall become effective sooner. Pet. at 24. A stay of execution may be granted either before the decision becomes effective or as part of the decision itself, with terms of probation that are reasonable based on the findings and decision. Govt. Code §11519(b). Pet. at 24-25.

The first cause of action alleges that the ODA violates due process based on breach of confidentiality, privacy, and a court order. Pet. at 15. DLSE was barred from entering content of sealed matters into that record. Pet. at 15.

The second cause of action alleges that the ODA was predetermined and flawed because the hearing officer was biased and the hearing filled with problems. Pet. at 15.

The third cause of action alleges that Govt. Code section 11135 prohibits discrimination under any state program or activity on the basis of race or national origin. Pet. at 15. Richter is protected under anti-discrimination provisions based on racial identification and national origin. Pet. at 15.

The fourth cause of action asserts that, under Govt. Code section 11135, DLSE failed to take action to support AB 5 wage orders and further the rights of workers. Pet. at 15.

The fifth cause of action alleges that, in passing the CPRA, the Legislature found that access to information concerning the conduct of the people’s business is a fundamental and necessary right of every person in this state. Pet. at 16. DLSE has ignored Richter’s requests for records. Pet. at 16.

Richter seeks, inter alia, (1) remand to DLSE for an additional in-person hearing to correct the figures in the ODA to comply with prevailing law and public policy based on the AB 5 test, including finding that Richter was an employee and performed the work he was hired to do; (3) elimination of any barred references in the ODA; (4) an apology and admission of fault form the state, and punishment for willfully criminal conduct; (5) an order compelling DLSE to add a review step between the hearing decision and the appeal which would allow a party to show factual inaccuracies in an ODA merit corrections thereto; (6) stronger separation of adjudicative and investigative roles in DLSE to preserve due process and avoid bias; (7) an order assigning the matter to Clemons for her to act consistently with public policy and this court’s order; (8) removal of any figures derived from incorrect facts; (11) an order to issue an ODA aligning with prevailing laws and public policy, including an award of compensatory and consequential damages, waiting time penalties, and liquidated damages; (13) compensatory damages of $62.54 based on 118 miles traveled; and (14) 10% annual interest on the $15,756.35 owed in compensatory damages, or $2,734.57. Pet. at 13-15.

On November 6, 2023, Richter served Lousky and Design with the Petition and Summons by substitute service, effective November 16, 2023.

On January 8, 2024, DLSE, García-Brower, Clemons, Corleto, Zamora, and Betancur signed a Notice of Acknowledgement of Receipt for the Petition and Summons.

A demurrer tests the legal sufficiency of the pleading alone and will be sustained where the pleading is defective on its face.

Where pleadings are defective, a party may raise the defect by way of a demurrer or motion to strike or by motion for judgment on the pleadings. CCP §430.30(a); Coyne v. Krempels, (1950) 36 Cal.2d 257. The party against whom a complaint or cross-complaint has been filed may object by demurrer or answer to the pleading. CCP §430.10. A demurrer is timely filed within the 30-day period after service of the complaint. CCP § 430.40; Skrbina v. Fleming Companies, (1996) 45 Cal.App.4th 1353, 1364.

A demurrer may be asserted on any one or more of the following grounds: (a) The court has no jurisdiction of the subject of the cause of action alleged in the pleading; (b) The person who filed the pleading does not have legal capacity to sue; (c) There is another action pending between the same parties on the same cause of action; (d) There is a defect or misjoinder of parties; (e) The pleading does not state facts sufficient to constitute a cause of action; (f) The pleading is uncertain (“uncertain” includes ambiguous and unintelligible); (g) In an action founded upon a contract, it cannot be ascertained from the pleading whether the contract is written, is oral, or is implied by conduct; (h) No certificate was filed as required by CCP §411.35 or (i) by §411.36. CCP §430.10. Accordingly, a demurrer tests the sufficiency of a pleading, and the grounds for a demurrer must appear on the face of the pleading or from judicially noticeable matters. CCP §430.30(a); Blank v. Kirwan, (1985) 39 Cal.3d 311, 318. The face of the pleading includes attachments and incorporations by reference (Frantz v. Blackwell, (1987) 189 Cal.App.3d 91, 94); it does not include inadmissible hearsay. Day v. Sharp, (1975) 50 Cal.App.3d 904, 914.

The sole issue on demurrer for failure to state a cause of action is whether the facts pleaded, if true, would entitle the plaintiff to relief. Garcetti v. Superior Court, (1996) 49 Cal.App.4th 1533, 1547; Limandri v. Judkins, (1997) 52 Cal.App.4th 326, 339. The question of plaintiff’s ability to prove the allegations of the complaint or the possible difficulty in making such proof does not concern the reviewing court. Quelimane Co. v. Stewart Title Guaranty Co., (1998) 19 Cal.4th 26, 47. The ultimate facts alleged in the complaint must be deemed true, as well as all facts that may be implied or inferred from those expressly alleged. Marshall v. Gibson, Dunn & Crutcher, (1995) 37 Cal.App.4th 1397, 1403. Nevertheless, this rule does not apply to allegations expressing mere conclusions of law, or allegations contradicted by the exhibits to the complaint or by matters of which judicial notice may be taken. Vance v. Villa Park Mobilehome Estates, (1995) 36 Cal.App.4th 698, 709.

For all demurrers filed after January 1, 2016, the demurring party must meet and confer in person or by telephone with the party who filed the pleading for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer. CCP §430.31(a). As part of the meet and confer process, the demurring party must identify all of the specific causes of action that it believes are subject to demurrer and provide legal support for the claimed deficiencies. CCP §430.31(a)(1). The party who filed the pleading must in turn provide legal support for its position that the pleading is legally sufficient or, in the alternative, how the complaint, cross-complaint, or answer could be amended to cure any legal insufficiency. Id. The demurring party is responsible for filing and serving a declaration that the meet and confer requirement has been met. CCP §430.31(a)(3).

In August 2016, the Director of Industrial Relations (“Director”) issued an order modifying its decision in Clemons to fix the name of the subcontractor at issue. RJN Ex. 2. The order noted that Labor Code section 1742(b) allows the Director to make substantive changes to the decision within 15 days of its issuance, and to correct clerical errors at any time. RJN Ex. 2.

On May 3, 2022, Richter filed a complaint against Lousky. RJN Ex. 1 (ODA p. 1). The complaint alleged that Lousky owed Richter wages, meal period premiums, rest period premiums, liquidated damages, unreimbursed business expenses, and penalties. ODA p. 1. Hearing officer Clemons heard the complaint on August 2, 2022. ODA p. 2.

On August 14, 2023, Clemons issued an ODA denying Richter’s complaint. ODA p. 6. The ODA’s Findings of Fact stated that Richter moved into the house in June 2020 and vacated it in May 2022. ODA p. 2. He then contacted Lousky about required repairs. ODA p. 2. When Lousky said that she could not immediately address those issues, Richter offered to complete the work. ODA p. 2. Lousky agreed to let him find the workers to complete the work. ODA p. 2.

Richter asserted that this meant Lousky knew he would hire workers, including himself, to complete the work. ODA p. 2. Richter worked in the construction industry and billed $30 per hour for this work, which was consistent with industry standards. ODA p. 2.

In contrast, Lousky argued Richter made deductions from the rent for repairs after saying he would pay for the cost of upgrades. ODA p. 3. Lousky eventually told Richter that he could no longer make those rent deductions and that any further repairs required her approval. ODA p. 4. They continued to exchange emails about Richter’s late rent payments and unauthorized work. ODA p. 4. Their relationship soured to the point that Richter was asked to leave the premises. ODA p. 4.

The ODA found that Richter was not an employee and not discharged from the work he conducted on the Property. ODA p. 5. On August 18, 2023, DLSE served Richter with the ODA by mail. ODA p. 9.

Respondents demur to the Petition based on (1) an alternative remedy available to Richter at law; (2) failure to plead sufficient facts to constitute a cause of action; and (3) quasi-judicial immunity of individual Respondents.

Despite a 70-minute Zoom meeting on February 5, 2024, the parties could not reach an agreement regarding the objections raised in this demurrer. Raymond Decl., ¶4. Respondents have satisfied the requirement to meet and confer.

Respondents assert that the five causes of action (Pet. at 15-16) lack sufficient facts to constitute a cause of action. Dem. at 6-7.

CCP section 1094.5 is the administrative mandamus provision which structures the procedure for judicial review of adjudicatory decisions rendered by administrative agencies.¿ Topanga Association for a Scenic Community v. County of Los Angeles, (“Topanga”) (1974) 11 Cal.3d 506, 514-15.¿ It is the appropriate form of mandamus when the writ is issued for the purpose of inquiring into the validity of any final administrative order or decision made as the result of a proceeding in which by law a hearing is required to be given, evidence is required to be taken, and discretion in the determination of facts is vested in the inferior tribunal, corporation, board, or officer. CCP §1094.5(a).

Labor Code section 98(a) authorizes, but does not require, the Labor Commissioner to provide for a hearing, known as a Berman hearing, in any action to recover wages, penalties, and other demands for compensation. Such a hearing shall be informal. Labor Code §98(g). Case law distinguishes between Berman hearings and those governed by the Administrative Procedures Act. Corrales v. Bradstreet, (“Corrales”) (2007), 153 Cal. App. 4th 33, 51. Within ten days after service of notice of an order, decision, or award, the parties may seek review by filing an appeal to the superior court, where the appeal shall be heard de novo. Labor Code §98.2(a).

Because de novo superior court review is available, administrative mandamus is not appropriate for review of these hearings. The Petition asserts that all five causes of action lie in traditional mandamus. Pet. at 15-16. A traditional writ of mandate under CCP section 1085 is the method of compelling the performance of a legal, ministerial duty. Pomona Police Officers’ Assn. v. City of Pomona, (1997) 58 Cal.App.4th 578, 583-84. Generally, mandamus will lie when (1) there is no plain, speedy, and adequate alternative remedy, (2) the respondent has a duty to perform, and (3) the petitioner has a clear and beneficial right to performance. Id. at 584 (internal citations omitted). Mandamus is an equitable remedy that is not available if there is an adequate remedy at law.

On May 3, 2022, Richter filed a complaint against Lousky. ODA p. 1. On August 14, 2023, Clemons issued an ODA denying Richter’s complaint in full. ODA p. 6. Richter seeks, inter alia, (1) remand to the DLSE for an additional in-person hearing to correct the figures in the ODA to comply with prevailing law and public policy based on the AB 5 test, including by finding that Richter was an employee and performed the work he was hired to do; (7) an order to assign the matter to Clemons for her to act consistently with public policy and this court’s order; (8) removal of any figures derived from incorrect facts; (11) an order to issue an ODA aligning with prevailing laws and public policy, including an award of compensatory and consequential damages, waiting time penalties, and liquidated damages based on the verified wage claim; (13) compensatory damages of $62.54 based on 118 miles traveled; and (14) 10% annual interest on the $15,756.35 owed in compensatory damages, or $2,734.57. Pet. at 13-15.

Respondents argue that traditional mandamus is not available because there was an adequate remedy available at law through de novo superior court appeal. Labor Code §98.2(a). The Petition alleges that Richter did not timely appeal because he instead moved for DLSE to correct the various clerical, calculation, and factual errors in the ODA. Pet. at 3, 5. When DLSE denied the motion, it told Richter that his motion did not toll the deadline to appeal the ODA to the superior court. Pet. at 5.

The first issue is whether Richter’s motion tolled the ten-day statute of limitations to file a de novo superior court appeal. The Petition cites no viable authority for tolling.

The Petition first cites 22 CCR section 5069(d), which resets the deadline for filing an appeal upon service of an order correcting a clerical error or a corrected decision or order. Pet. at 23. 22 CCR concerns social security, and 22 CCR sections 5000 et seq. govern hearings before the California Unemployment Insurance Appeals Board. Dem. at 6. They have nothing to do with Berman hearings before the Labor Commissioner. Id.

The Petition cites Govt. Code section 11519(a), under which an administrative decision becomes effective 30 days after it is delivered or mailed to respondent unless a reconsideration is ordered or a stay of execution granted by then, or the agency itself orders that the decision shall become effective sooner. Pet. at 24. A stay of execution may be granted either before the decision becomes effective or as part of the decision itself, with terms of probation that are reasonable based on the findings and decision. Govt. Code §11519(b). Pet. at 24-25. Govt. Code sections 11500 et seq. apply only to formal administrative hearings under the APA. Dem. at 6. They do not apply to informal wage claim proceedings before the Labor Commissioner. See Labor Code §98(g).

The Petition also cites Clemons, in which the Director chose to modify a decision to correct a clerical error rather than let the error stand. Pet. at 26; RJN Ex. 2. The order cited Labor Code section 1742(b), which allows the Director to make substantive changes to the decision within 15 days of its issuance, and to correct clerical errors at any time. RJN Ex. 2. Labor Code sections 1720 et seq. concern public works as defined in Labor Code section 1720(a)(1). Mem. at 6. It does not apply to a wage claim for work done on a private residence.

Richter has failed to show any statutory authority permitting a motion to amend a clerical error in an ODA, or that such a motion tolls the ten-day statute of limitations for a Berman appeal under Labor Code section 98.2. The Petition does refer to due process but fails to indicate how due process would be violated by the lack of tolling for a motion to modify a clerical error.In any case, the error alleged by Richter was not clerical. The Petition asserts that the ODA was wrongly decided due to hearing officer bias and error. Pet. at 5.

Second, even if arguendo Richter were correct that the ten-day deadline for superior court appeal should have been tolled, his remedy was to file an untimely appeal and argue tolling of the deadline. As this was an adequate legal remedy, he cannot seek review of the deadline through traditional mandamus. The demurrer is sustained for the first through fourth causes of action seeking traditional mandamus alleging that the ODA contains confidential information, was the result of bias, was discriminatory, and failed to support AB 5 wage orders and further the rights of workers. Pet. at 15. Traditional mandamus cannot support these four time-barred claims seeking to reverse or modify the ODA[3]

The fifth cause of action invokes principles of the CPRA. Pet. at 16. Govt. Code section 7921.000 declares that “access to information concerning the conduct of the people’s business is a fundamental and necessary right of every person in this state.” The CPRA’s purpose is to increase freedom of information by giving the public access to information in possession of public agencies. CBS. Inc. v. Block, (1986) 42 Cal. 3d 646, 651.

Respondents are correct that the Petition’s CPRA claim is deficient. Dem. at 8. The Petition alleges that DLSE ignores Richter’s request for records (Pet. at 16) but does not allege that Richter ever made a request for documents under the CPRA. It does not identify the documents Richter requested, DLSE’s response, and what documents remain to be produced. Dem. at 8. The fifth cause of action fails to state facts sufficient to constitute a CPRA claim.[4]

The demurrer to the Petition is sustained. Richter has not opposed the demurrer and has not demonstrated he can amend the Petition to cure its defects. The demurrer is sustained without leave to amend. An OSC re: dismissal is set for April 4 , 2024 at 9:30 a.m.

[1] Although the Real Parties-in-Interest have filed a notice of joinder, it lacks a memorandum of points and authorities. See CRC 3.1113. As such, it is merely a cheerleading effort with no effect on the merits.

[2] Respondents request judicial notice of (1) the ODA (RJN Ex. 1); and (2) the Order Modifying Decision of Director of Industrial Relations to Correct Clerical Error in Clemons (RJN Ex. 2). The requests are granted. Evid. Code §452(c).

[3] The court agrees that essential facts are missing for the first through third causes of action. Richter fails to identify what confidential information is in the ODA, alleges discrimination based on race and national origin but never indicates the basis and manner of discrimination, and alleges bias without providing concrete facts. Dem. at 6-7.

[4] The court need not address whether individual Respondents have quasi-judicial immunity. Dem. at 8-9.