Judge Randolph M. Hammock, Case Number: 23STCP03210, Date: 2024-09-26 Tentative Ruling

Judge: Randolph M. Hammock, Case: 23STCP03210, Date: 2024-09-26 Tentative Ruling

Division of Labor Standards Enforcement, Department of Industrial Relations, State of California v. Parsons Environment & Infrastructure Group, Inc., et al.

The Division of Labor Standards Enforcement initiated this action seeking a total judgment of $137,390.93 against Defendants based on a Civil Wage and Penalty Assessment under Labor Code section 1742(d). On September 1, 2023, the clerk entered judgment in that amount. On November 29, 2023, Plaintiff filed an Acknowledgment of Satisfaction of Judgment indicating that it accepted payment or performance other than that specified in the judgment in full satisfaction of the judgment.

In July of 2021, Deputy Labor Commissioner Carlos Medrano investigated a complaint filed by Rafael Naranjo that Bayside Engineering Construction, Inc., a licensed contractor, violated the prevailing wage laws while performing work under subcontractor Innovative Construction Solutions, Inc. and prime contractor Parsons Environment & Infrastructure Group on a public works project. (Medrano Decl. ¶ 3.)

On March 16, 2023, Mr. Medrano issued a civil wage and penalty assessment in DLSE case number 40-72877-768 against Defendants for $45,995.74 in unpaid wages, $1,570.59 in unpaid training funds, $17,800.00 in penalties pursuant to Labor Code section 1775, $17,360.00 in penalties pursuant to Labor Code section 1777.7, and $4,500.00 in penalties pursuant to Labor Code section 1813.

When no party appealed, the Division initiated this action seeking a total judgment of $137,390.93 against Defendants based on a Civil Wage and Penalty Assessment under Labor Code section 1742(d). On September 1, 2023, the clerk entered judgment in that amount. On November 29, 2023, Plaintiff filed an Acknowledgment of Satisfaction of Judgment relieving the judgment debtors, indicating that Plaintiff accepted payment or performance other than that specified in the judgment in full satisfaction of the judgment. Following satisfaction of the judgment, the Division disbursed cashiers checks to Mr. Naranjo in the amounts of $12,566.33 and $35,000.00 be allocated as wages. (Medrano Decl. ¶ 8.)

Non-party Rafael Naranjo now moves to vacate the Acknowledgment of Satisfaction of Judgment. Mr. Naranjo refers to himself as the “judgment creditor,” and asserts that the judgment in this matter “was entered in [his] favor.” (Naranjo Decl. ¶¶ 1, 2.) He contends that Plaintiff entered into the satisfaction of judgment without his consent and deprived him of full compensation awarded by the judgment.

In support of his motion, Plaintiff relies on Code of Civil Procedure section 724.050, which he argues requires the Acknowledgment of Satisfaction of Judgment be vacated. Section 724.050 only provides a judgment debtor a remedy to demand a judgment creditor either file an acknowledgment with the court or deliver an acknowledgment of satisfaction of judgment to the person who made the demand. This section is inapplicable here.

Although Naranjo made the initial complaint prompting the investigation, he was not a party to this action and is not a judgment creditor or assignee. The Division brought this enforcement action under Labor Code section 1720 et seq., which sets certain wage standards for public works projects and provides a means of enforcement through the Labor Commissioner.

As the parties explain in opposition, this is distinct from the administrative procedure provided by Labor Code section 98 et seq., which also provides recovery of unpaid wages. Under section 98, “[i]f an employee files an administrative complaint, the Labor Commissioner may either accept the matter and conduct a Berman hearing (§ 98, subd. (a)); prosecute a civil action on the employee's behalf (§ 98.3); or take ‘no further action ... on the complaint’ (§ 98, subd. (a)).” (OTO, L.L.C. v. Kho (2019) 8 Cal. 5th 111, 121.) Had this been the case, Plaintiff might have been creditor on any judgment entered.

But here, the clerk entered judgment on a final civil wage and penalty assessment, not a Berman hearing. The judgment did not belong to Naranjo, and he has cited no authority making him a judgment creditor or providing him standing to vacate it.