Judge: Stephen P. Pfahler, Case: 23STCV15039, Date: 2024-11-18 Tentative Ruling

Case Number: 23STCV15039    Hearing Date: November 18, 2024    Dept: 68

Dept. 68

Date: 11-18-24 c/f 117-24

Case #: 23STCV15039

Trial Date: 12-9-24

SUMMARY JUDGMENT/SUMMARY ADJUDICATION

MOVING PARTY: Plaintiff/Cross-Defendant, Ashley Kim

RESPONDING PARTY: Defendant/Cross-Complainant, James Ha, et al.

RELIEF REQUESTED

Motion for Summary Judgment/Summary Adjudication

SUMMARY OF ACTION

On June 28, 2023, Plaintiff Ashely Kim filed a complaint for Failure to Pay Minimum Wage Failure to Provide Accurate Itemized Pay Stubs; Waiting Time Penalties; and, Unfair Business Practices. On July 10, 2023, Plaintiff filed a 170.6 challenge, thereby leading to reassignment from Department 37.

On September 5, 2023, Defendants James Ha and I Park, Inc. filed a general denial. On September 8, 2023, Defendants filed a cross-complaint for Quantum Meruit for Services Rendered, and Common Counts against Plaintiff and Elbert Song. On October 13, 2023, Elbert Song, in pro per, answered the cross-complaint. On November 8, 2023, Cross-Complainants filed a first amended cross-complaint for Quantum Meruit for Services Rendered, and Common Counts. Plaintiff answered the cross-complaint on January 4, 2024; Song, in pro per, answered on January 5, 2024. On February 14, 2024, Cross-Defendants dismissed Song from the cross-complaint with prejudice.

The complaint itself lacks any factual context for the wage and hour claims. The first amended cross-complaint alleges Kim worked as a real estate salesperson for a certain condominium development, was never employee of Defendants/Cross-Complainants, and all compensation was commissioned based. The cross-complaint seeks compensation for use of a “suite” provided to Kim in order to conduct business, but instead was utilized for personal endeavors.

RULING: Denied.

Request for Judicial Notice: Granted (see below)

Plaintiff/Cross-Defendant Ashley Kim moves for summary judgment/summary adjudication on the first amended cross-complaint of James Ha and I Park, Inc. Kim moves for summary judgment on grounds of indemnification from any and all sought after operating expense reimbursement claims under Labor Code section 2802. James Ha and I Park, Inc. oppose the motion on grounds of improper reliance on claim preclusion based on a prior action between the parties. Kim in reply reiterates the statement of decision and statutory bar on the cross-complaint.

The pleadings frame the issues for motions, “since it is those allegations to which the motion must respond. (Citation.)”  (Scolinos v. Kolts (1995) 37 Cal. App. 4th 635, 640-641; FPI Development, Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 382-383; Jordan-Lyon Prods., LTD. v. Cineplex Odeon Corp. (1994) 29 Cal.App.4th 1459, 1472.) The purpose of a motion for summary judgment or summary adjudication “is to provide courts with a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.” (Aguilar v. Atl. Richfield Co. (2001) 25 Cal.4th 826, 843.)  “Code of Civil Procedure section 437c, subdivision (c), requires the trial judge to grant summary judgment if all the evidence submitted, and ‘all inferences reasonably deducible from the evidence’ and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law.”  (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.) 

“On a motion for summary judgment, the initial burden is always on the moving party to make a prima facie showing that there are no triable issues of material fact.” (Scalf v. D.B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1519.) A defendant moving for summary judgment “has met his or her burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action . . . cannot be established.”  (Code Civ. Proc., § 437c, subd. (p)(2).) “Once the defendant . . . has met that burden, the burden shifts to the plaintiff . . . to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto.” (Ibid.)

“When deciding whether to grant summary judgment, the court must consider all of the evidence set forth in the papers (except evidence to which the court has sustained an objection), as well as all reasonable inference that may be drawn form that evidence, in the light most favorable to the party opposing summary judgment.” (Avivi v. Centro Medico Urgente Medical Center (2008) 159 Cal.App.4th 463, 467; see also Code Civ. Proc., § 437c, subd. (c).) “An issue of fact can only be created by a conflict in the evidence.  It is not created by speculation, conjecture, imagination or guesswork.”  (Lyons v. Security Pacific National Bank (1995) 40 Cal.App.4th 1001, 1041 (citation omitted).)

The issue statements and requests for relief on the motion for summary adjudication are stated as follows:

·         Issue No 1: That Cross-complainants be precluded from contending that Ms. Kim was not their employee pursuant to the ruling in Kim v. Realtex, where the court held that Ms. Kim was Cross-complainant I-Park's employee. Based upon the forgoing ruling, Ms. Kim is indemnified from Cross-defendants' claims under Labor Code § 2802.

·         Issue No 2: That Cross-complainants be precluded from contending that Ms. Kim did not earn any real estate selling commissions pursuant to the ruling in Kim v. Realtex, where the court held that Ms. Kim was entitled to selling commissions and coordination fees in the amount of $67 ,853 .33, precluding Cross-complaints from making a claim for the return of advanced commissions on unsold condominium units.

·         Ms. Kim requests indemnification of her attorneys' fees and costs pursuant to Labor Code§ 2802 in the amount of $24,583.51.

The motion and issue statements reflect and rely on a prior action, Kim v. Realtex Properties, Inc., et al., 22STCV23066. Kim specifically cites to the doctrine of collateral estoppel as the basis of relief against the operative cross-complaint. Defendants/Cross-Complainants challenge any claim preclusion/collateral estoppel/res judicata bar on grounds the prior decision in no way bars the subject action.

The doctrine of res judicata gives certain conclusive effect to a former judgment in subsequent litigation involving the same controversy.  It seeks to curtail multiple litigation causing vexation and expense to the parties and wasted effort and expense in judicial administration.  Res judicata, or claim preclusion, prevents relitigation of the same cause of action in a second suit between the same parties or parties in privity with them. 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. 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. (Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 897.)

“The doctrine [of res judicata] has two aspects. It applies to both a previously litigated cause of action, referred to as claim preclusion, and to an issue necessarily decided in a prior action, referred to as issue preclusion. (Citations.) The prerequisite elements for applying the doctrine to either an entire cause of action or one or more issues are the same: (1) A claim or issue raised in the present action is identical to a claim or issue litigated in a prior proceeding; (2) the prior proceeding resulted in a final judgment on the merits; and (3) the party against whom the doctrine is being asserted was a party or in privity with a party to the prior proceeding.” (Brinton v. Bankers Pension Services, Inc. (1999) 76 Cal.App.4th 550, 556.)

“Res Judicata is not a bar to claims arising after the filing of the initial complaint.” A party may assert new claims in an amended pleading, “but if no such pleading is filed, a plaintiff is not foreclosed. [Citation.] The general rule that a judgment is conclusive as to matters that could have been litigated ‘does not apply to new rights acquired pending the action which might have been, but which were not, required to be litigated [Citation]’.” (Allied Fire Protection v. Diede Const., Inc. (2005) 127 Cal.App.4th 150, 155; Planning and Conservation League v. Castaic Lake Water Agency (2009) 180 Cal.App.4th 210, 226.)

“In general, collateral estoppel precludes a party from relitigating issues litigated and decided in a prior proceeding.  (Citations.) ‘Traditionally, we have applied the doctrine only if several threshold requirements are fulfilled. First, the issue sought to be precluded from relitigation must be identical to that decided in a former proceeding. Second, this issue must have been actually litigated in the former proceeding. Third, it must have been necessarily decided in the former proceeding. Fourth, the decision in the former proceeding must be final and on the merits. Finally, the party against whom preclusion is sought must be the same as, or in privity with, the party to the former proceeding. (Citation.)’” (Gikas v. Zolin (1993) 6 Cal.4th 841, 848–849.)

“Collateral estoppel is used offensively when … ‘the plaintiff seeks to foreclose the defendant from litigating an issue the defendant has previously litigated unsuccessfully in an action with another party. Defensive use occurs when a defendant seeks to prevent a plaintiff from asserting a claim the plaintiff has previously litigated and lost against another defendant.’ (Citations.)” (Smith v. Exxon Mobil Oil Corp. (2007) 153 Cal.App.4th 1407, 1414.)

The court takes judicial notice of the prior complaint, the statement of decision, and statement of information for I Park, Inc. for purposes of considering the claim preclusion issues. (Kilroy v. State of California (2004) 119 Cal.App.4th 140, 148.) The court declines to take judicial notice of the content of the pleadings, including the undated declaration, for purposes of the truth of the matter asserted. (Barri v. Workers' Comp. Appeals Bd. (2018) 28 Cal.App.5th 428, 437; Day v. Sharp (1975) 50 Cal.App.3d 904, 914.)

The request for judicial notice shows the first amended complaint, 22STCV23066, filed by Kim on September 22, 2022, by Kim against Realtex Properties, Inc. and James Ha, for breach of contract and unfair competition. The First Amended Complaint specifically alleged the existence fo the “Commission Agreement.” [Req. Jud. Not., Ex. 1: First Amended Complaint, ¶¶ 2, 12, 16, 18, 26.] On January 16, 2024, the court issued a Statement of Decision, whereby the court found in paragraph 12: “In accordance with evidence ... and the Parties’ stipulation regarding the calculation of commissions for the ‘first 9 units to open escrow’ scenario, the Court finds the following commissions and transaction coordination fees due to Plaintiff KIM under the COMMISSION AGREEMENT, as reformed. First 9 Units to Open Escrow -Total of $67,853.33 a. Plaintiff's Listing Commissions on first 9 units to open escrow at the WILTON CONDO PROJECT (Units 204-205, 305, 401-406) - 0.5% listing commission is $42,620.00 ($8,524,000 x 0.05%), b. Plaintiff's selling commission (1/3of2.5% or 0.8333%) on 3 units that were sold to buyers that visited the WILTON CONDO PROJECT prior to March 8, 2022 (Units 204, 403, 404) is $23,433.33 (1/3 of $2,812,000 X 2.5%), c. Plaintiff's transaction coordination fee for the first 9 units to open escrow is $1,800.00 (9 Units X $200)” Paragraph 13 continues: “In accordance with evidence ... the Court finds that Plaintiff KIM was employed by Defendant HA's construction company, I Park, Inc. from April, 2020 ... as I Park, Inc. 's Operations Director receiving a salary of $2,000.00 per month for her services as I Park, Inc.' s Operations Director from until April 2021, at which time I Park, Inc. stopped payment of Plaintiff KIM's salary under promise to pay later ...”

Contrary to the position in opposition, the statement of decision categorically and unequivocally found an employment relationship between Kim and I Park, Inc., as well as due and payable sales commissions. Denial of such findings based (presumably) on the fact that I Park Inc. was not an actual named party in the underlying action disingenuously disregards the plain language of the statement of decision. [See Opposition, 6:26-7:7, 10:11-24.] Regardless of potential interpretation discussion, the court will not consider any evidentiary re-argument of these findings, including challenge to the scope of any agreement(s). [See Opposition, 7:13-8:4.] The court cites to the opposition in that the responsive separate statement lacks evidence other than citation to the declaration of Ha regarding the prior litigation, and a statement from CPA Kwang Park regarding prior actions by Kim during the parties’ business relationship.

Consistent with the prior Statement of Decision, the court finds the subject litigation and former action arise from the same transaction—the commissioned sales of the condominium units. (Why the subject action was not presented to the former court for a determination of a related case remains unknown.)

In challenging the subject motion, Defendants/Cross-Complainants additionally maintain the subject first amended cross-complaint alleges a new claim raised in the common count. The argument again depends on the vaguely identified “advanced payments” relative to the otherwise apparently litigated commission agreement. The position again lacks any evidentiary or legal support.

The cross-complaint and position in opposition invokes consideration of the defense of waiver during litigation on the commission agreement in the prior action. “Except as otherwise provided by statute, if a party against whom a complaint has been filed and served fails to allege in a cross-complaint any related cause of action which (at the time of serving his answer to the complaint) he has against the plaintiff, such party may not thereafter in any other action assert against the plaintiff the related cause of action not pleaded.” (Code Civ. Proc., § 426.30, subd. (a).) “Since section 426.30 bars claims which the party failed to assert by cross-complaint in a previous action arising from the same occurrence, it necessarily bars issues which were never litigated and never actually decided.” (Hulsey v. Koehler (1990) 218 Cal.App.3d 1150, 1157.) “[A]s a statutory bar to splitting a cause of action, section 426.30 must be specially pleaded. It is well-established that a rule against splitting of actions is for the benefit of the defendant and is waived by the failure to specifically plead the defense.” (Id. at p. 1158.) The third affirmative defense in the answer to the first amended cross-complaint alleges waiver and the twenty-seventh affirmative defenses raises the collateral estoppel and res judicata defenses which encompasses the bar against claim splitting (infra).

“[A] party cannot by negligence or design withhold issues and litigate them in successive actions; he may not split his demands or defenses; he may not submit his case in piecemeal fashion. (Citation). If by an attempt at artful pleading, a party could assert his cause in one form in one action and, after an adverse decision on the merits, reassert it in another form in a subsequent action, there would be no end to litigation; and, of course, the mere fact that Flickinger may have seen fit to counterclaim in the prior action in the form of an account stated cannot place him in any better position than if he had omitted to file a counterclaim of any kind in that action.” (Flickinger v. Swedlow Engineering Co. (1955) 45 Cal.2d 388, 393.) “A final judgment on the merits between parties who in law are the same operates as a bar to a subsequent action upon the same cause of action, settling not only every issue that was raised, but also every issue that might have been raised in the first action. (Citations.)” (Olwell v. Hopkins (1946) 28 Cal.2d 147, 152.)

The court therefore finds the claims by Ha in the first amended cross-complaint seeking some form or quantum meruit recovery based on provision of the suite for purposes of conducting commissioned sales are barred under the doctrine of claim splitting thereby establishing a waiver due to the failure to raise the claims in the prior action. [First Amend. Cross-Comp., ¶¶ 9-11.] The statement of indebtedness, albeit in a different amount than sought in the quantum meruit cause of action, also arises from the commission agreement fails under claim splitting and waiver doctrine as well. [First Amend. Cross-Comp., ¶¶ 14-15.] The court relies on the doctrine of waiver in that the exact claim was in fact not adjudicated, thereby requiring a finding under the doctrine collateral estoppel. (See Gikas v. Zolin, supra, 6 Cal.4th at pp. 848–849.)

The Statement of Decision specifically identified I Park Inc. as the employer, with Ha only identified as some form of owner. Kim maintains privity between Ha and employer I Park, Inc. The statement of information identifies Ha as the agent for service, CEO, Secretary and CFO. [Req. Jud. Not., Ex. 3.] As addressed above, Ha was a named defendant in the underlying action, and was therefore responsible for raising any and all claims regarding the commission agreement. The dispute also apparently considered the employment relationship between the parties as part of the underlying dispute albeit with a non-named party. I Park, Inc. denies any privity with the parties on this basis in that the entity’s “pecuniary interests were not represented” at the time of trial. Neither party presents any legal authority on the subject.

“Due process requires that the nonparty have had an identity or community of interest with, and adequate representation by, the ... party in the first action. [Citations.] The circumstances must also have been such that the nonparty should reasonably have expected to be bound by the prior adjudication....” (Citizens for Open Access to Sand and Tide, Inc. v. Seadrift Ass'n (1998) 60 Cal.App.4th 1053, 1070 (internal quotation marks omitted).) “In the final analysis, the determination of privity depends upon the fairness of binding [a nonparty] with the result obtained in earlier proceedings in which it did not participate.” [¶] “To meet the shared interest requirement, a ‘nonparty alleged to be in privity must have an interest so similar to the party's interest that the party acted as the nonparty's “virtual representative” in the first action.’” (LaCour v. Marshalls of California, LLC (2023) 94 Cal.App.5th 1172, 1196 (internal quotation marks omitted.).)

To the extent any claims by Ha seeking relief from the underlying commission contract are barred, the court cannot determine how a new party, the identified employer and entity responsible for payment, can otherwise proceed given the doctrine of claim splitting and waiver applicable to Ha. In other words, if Ha as principal of I Park Inc. remains barred, the basis for I Park Inc. to separately proceed on the same claim lacks an independent basis to proceed. Nevertheless, the court remains unclear as to whether waiver of the claims by Ha as CEO, et al. of the corporate entity constitutes an equivalent representation under the represented interest consideration criteria. Simple omission of a party in no way appears to bar the adjudication of the claims involving a common party. If Ha were concerned about the adjudication of rights on behalf of I Park Inc., nothing precluded Ha from joining the corporate entity into action as an indispensable party. Again, however, neither party presents any legal authority, and the court declines to make the arguments for either side. The court therefore defers any such consideration. The lack of specific support regarding I Park Inc. therefore bars a basis for complete relief on the individual causes of action as to all parties.

Because the court cannot grant complete relief on the cross-complaint, the court denies the motion for summary judgment. Both the framing of the motion for summary adjudication and lack of ability to separately adjudicate the entire cause of action as to all parties, claim of duty, damages, and/or affirmative defense, also prevents the granting the motion of summary adjudication. A request for attorney fees is also not the appropriate subject matter for summary adjudication. (Code Civ. Proc., § 437c, subd. (f)(1).)

The motion is therefore denied in its entirety.

Trial remains set for December 9, 2024.

Ashley Kim to give notice.