Myers v. Raley's ( 2019 )

Filed 2/13/19; certified for publication 3/12/19 (order attached)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
THIRD APPELLATE DISTRICT
(Yolo)
----
ROGER MYERS et al., C075125
Plaintiffs and Appellants, (Super. Ct. No. CV112668)
v.
RALEY'S,
Defendant and Respondent.
Without the benefit of Ayala v. Antelope Valley Newspapers, Inc. (2014)
59 Cal. 4th 522 (Ayala) and Jones v. Farmers Ins. Exchange (2013) 221 Cal. App. 4th 986
(Jones), and without elucidating its reasons, the trial court denied Raley’s maintenance
technicians’ motion for class certification of their wage and hour claims. The technicians
allege Raley’s maintains uniform policies and/or practices denying them travel time
while they are under Raley’s control, compensation for working during meal time, and
reimbursement for personal tools they are required to purchase and replace. These
uniform policies and practices, according to the technicians, present common issues of
fact and law and their legality are particularly well suited to a class action. In denying
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class certification, the trial court made the conclusory finding the plaintiffs failed to
establish that a well-defined community of interest exists and that the common issues of
fact and law predominate.
Our review of the trial court’s denial of class certification is governed by a unique
standard of review requiring us to examine the trial court’s reasons, not the propriety of
the outcome. Because the trial court’s cursory finding renders our task impossible and
because cases decided after the court’s ruling expose the dangers of employing the wrong
legal criteria, asking the wrong questions, or inflating the significance of the opposing
parties’ evidence, we must remand this case to the trial court for reconsideration in light
of Ayala and Jones and for a statement of reasons to ensure the court has not employed
improper criteria or relied on erroneous legal assumptions.
FACTS
Plaintiffs Roger Myers, Dave Billings, Greg Neyhart, and Jim Mestas were
nonexempt maintenance technicians for Raley’s grocery stores. Maintenance
technicians, including food equipment technicians, refrigeration technicians, and service
and construction electricians, travel from store to store in company-owned vehicles to
repair ovens, refrigeration units, electrical components, and other equipment. Plaintiffs
sought certification of the class defined as: “All current and former hourly employees
who held the position of Food Service Technician, Refrigeration Technician and/or
Electrician Technician (and/or similar position) at Raley’s in the State of California
within four (4) years of the filing of the original complaint to the present (‘the Class’).”
Uniform Policy or Practice Regarding Driving Time
Plaintiffs allege they are required to drive company vehicles carrying their own
tools as well as specialized tools and they are not allowed to run personal errands without
special permission or carry passengers who are not Raley’s employees except in an
emergency. Despite Raley’s control over their driving time, they are not compensated for
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the time they spend driving to their first store or driving home from the last store they
service each day. They assert Raley’s uniform practice violates California law.
(Morillion v. Royal Packing Co. (2000) 22 Cal. 4th 575, 583.)
Raley’s identified Rob Canfield as the “person most knowledgeable” about the use
of company vehicles. Canfield testified as follows:
“Q. So the vehicle policies are the same for all those groups of people
[electricians, carpenters, refrigeration, flooring, food service, cabinet and warehouse]?
“A. Yes.”
And:
“Q. Okay. Is it your testimony that pursuant to Raley’s vehicle usage policy,
vehicles are not to be used for personal use?
“A. Yes.
“Q. Okay. Is it your testimony that pursuant to Raley’s vehicle usage policy,
technicians are not to use the company vehicle to run personal errands? [¶] . . . [¶]
“[A.] I can answer. Yes. They are not to use the vehicle for their own personal
use.”
He also testified:
“Q. So when they get in their vehicle to drive to their first job, they are not to use
the company vehicle for personal errands on their way to work, right?
“A. That is correct.
“Q. And they are not to use the company vehicle after they complete their last job
on the way home for personal errands, correct?
“A. That’s correct.”
“Q. If they stop to pick up their children from school or pick up their dry-
cleaning . . . that would be a violation?
“A. That would be a violation.”
And, finally Canfield concluded:
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“Q. Are there specific vehicle usage policies that would apply to, for instance,
food service technicians but not refrigeration technicians? [¶] . . . [¶]
“[A.] There is this one policy that I’m aware of.
“Q. And that would apply to all the techs who use company vehicles?
“A. Correct.”
In short, according to Canfield, Raley’s single, uniform policy refuses to count
drive time as hours worked and forbids use of the company vehicles for personal use.
Raley’s policy applies to all technicians. Raley’s current employees, Vincent Matteucci,
Danny Bettridge, Edward Moss, Sr., and Nathan Schoonmaker confirmed the same
policies in their testimony. They were prohibited from using company vehicles for
personal use, a policy they followed.
Canfield was equally unequivocal about the Raley’s requirement that technicians
drive company vehicles. Again we turn to his testimony.
“Q. When you say ‘fleet,’ what are your referring to?
“A. Our maintenance department vehicles that are assigned to each person that
their job responsibilities require them to have a vehicle.
“Q. Who would that be?
“A. Refrigeration technicians, food service technicians, supervisors that are
assigned vehicles.
“Q. Anyone else, other than food service and refrigeration, that uses a company
vehicle?
“A. Our fixture installation, carpenters.
“Q. Anyone else?
“A. Electricians.”
Canfield’s testimony confirms that the putative class members were assigned
company vehicles and were required to use them. Moreover, not a single technician
testified he did not drive a company vehicle. In addition, the document entitled
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“Facilities/Maintenance Department Policy” states: “The company vehicle is to be used
for the transportation of tools and materials. It is not to be used to transport any personal
property other than tools used in the daily work.”
According to plaintiffs, Raley’s promulgated a policy that eliminated the drive
time from home to the stores in the morning and drive time to home from the stores in the
afternoon from “time worked.” Michael Helzer, the head of the Maintenance Technician
Department, attested to the existence of the policy for all technicians. He testified as
follows:
“Q. So the time from the house driving to the first store is not compensable,
correct?
“A. Correct. [¶] . . . [¶]
“Q. But then after they finish their last job and drive home, that’s not
compensable according to Raley’s --
“A. Correct. [¶] . . . [¶]
“Q. The testimony that you gave earlier about not compensating from the house to
the first job and not compensating from the last job home, drive time -- do you remember
that?
“A. Yes.
“Q. -- that’s common for all techs, correct? [¶] . . . [¶]
“[A.] To my knowledge, yes.”
Several of Raley’s employees confirmed the same policy. They did not believe
that driving to and from work counted as hours worked at Raley’s.
Uniform Policy or Practice Regarding Meal Time
Plaintiffs testified or declared that, pursuant to company policy, they were
instructed to record only eight hours of work in a nine-hour shift unless overtime had
been specifically approved by a supervisor. Using the company software at the time,
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there was no place to record start and stop times for meals. Technicians received no
policy or training information authorizing them to take an hour off-duty meal period; nor
would such a meal break be possible given their work requirements. They often ate while
driving from job to job.
After this lawsuit was filed, John Nesbitt, Raley’s person most knowledgeable
about wage and hour compliance, became concerned that Raley’s maintained no records
of start and stop times for shifts worked or for meal breaks. Raley’s thereafter changed
software programs.
Gerald Landers, Raley’s senior director of human resources, explained that
Raley’s assumes that technicians are provided meal breaks because it is policy they
remain in the field for nine hours but only record eight hours of work. Raley’s, therefore,
automatically deducts one hour of pay from technicians’ daily “hours worked.” He
admitted that Raley’s does not have a written policy to provide meal breaks in its
collective bargaining agreement and he does not know whether technicians actually
receive an uninterrupted, off-duty break during the work day.
Uniform Policy Regarding Personal Tools
Again it is Raley’s own witnesses who attest to the relevant and uniform policy. A
supervisor, Ross Wasson, declared that his direct reports used their own personal hand
tools. Danny Bettridge testified:
Q. “When you began working at Raley’s, did Raley’s supply you with the tools
for your briefcase?
“A. No.
“Q. How did you -- where do the tools come from that you use for work?
“A. I purchase the tools.
“Q. And did Raley’s reimburse you for those?
“A. No.”
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No employee testified or declared to the contrary. Technicians were uniformly
expected to supply their own personal tools.
Raley’s Insists There Were no Uniform Policies
Despite the testimony of Raley’s persons most knowledgeable attesting to the
universality of the policies or practices plaintiffs allege, Raley’s submitted declarations
by a number of employees to demonstrate that, in fact, the practices varied depending on
the supervisor, the position, the employee, and the reality of the day-to-day execution of
the very different jobs performed by the different types of technicians.
As to whether technicians were required to drive company vehicles and were
allowed to run personal errands while they were on the clock with company vehicles,
Raley’s points out that the vehicle usage policy Canfield provided employees did not
prohibit personal use of company vehicles. The policy was silent as to personal use. A
separate department vehicle policy states that company vehicles “are for company use
only” and should not be used for personal errands “if taken home for the night.” Raley’s
insists there is nothing in the latter document that prohibits employees from using
company vehicles for personal errands on their way to or from work, during meal
periods, or while scheduled to work on-call shifts. Personal use, according to Raley’s, is
prohibited only if the employee takes the vehicle home at night. Several employees, in
depositions or declarations, testified on behalf of Raley’s that they had used company
vehicles to run personal errands. Raley’s also contends the recording of drive time at the
beginning and ending of each day varied from person to person.
Raley’s policy was to allow technicians to take an hour off duty for meals. But
again, Raley’s asserts the way in which technicians recorded meal time varied from
person to person.
Raley’s has no written policy regarding technicians’ hand tools. It does have a
general reimbursement policy for “approved business-related expenses with appropriate
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documentation.” Several technicians testified they were reimbursed for repairing their
personal tools that were broken in the course of employment. In short, some technicians
requested reimbursement and received it, others did not.
The trial court refused the technicians’ request for class certification. Following
two hearings and extensive discovery, the trial court ruled in relevant part: “Plaintiffs’
motion for class certification is DENIED. Plaintiffs fail to establish that a well-defined
community of interest exists among the proposed putative class members. Based on the
evidence presented, the common issues of law and fact do not predominate as required to
support class certification under Code of Civil Procedure section 382. (Dailey v. Sears,
Roebuck & Co. (2013) 214 Cal. App. 4th 974, 992-995; Brinker Rest. Corp. v. Superior
Court (2012) 53 Cal. 4th 1004; Arias v. Superior Court of San Joaquin County (2009)
46 Cal. 4th 969, 977, fn. 2.[)]”
DISCUSSION
I
Standard of Review
For nearly a century, California law has guaranteed wage and hour protection to
employees and class actions, as fashioned by the Legislature, provide a practical vehicle
for vindicating those rights where common issues of law and fact predominate. (Brinker
Restaurant Corp. v. Superior Court, supra, 53 Cal. 4th 1004; Sav-On Drug Stores, Inc. v.
Superior Court (2004) 34 Cal. 4th 319.) Code of Civil Procedure section 382 authorizes
class actions “when the question is one of a common or general interest, of many persons,
or when the parties are numerous, and it is impracticable to bring them all before the
court . . . .” Indeed, “[t]his state’s public policy supports the use of class actions to
enforce California’s minimum wage and overtime laws for the benefit of workers.”
(Bradley v. Networkers Internat., LLC (2012) 21l Cal.App.4th 1129, 1141.) The parties
seeking class certification have the burden of establishing a well-defined community of
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interest among class members. (Sav-on Drug Stores, Inc. v. Superior Court, supra, at
p. 326.)
Trial courts have wide discretion to approve or deny class certification and
appellate courts normally review the court’s decision for an abuse of discretion. (Jaimez
v. Daiohs USA, Inc. (2010) 181 Cal. App. 4th 1286, 1297.) However, deference does not
mean abdication. Moreover, “This deferential standard of review . . . is inapplicable if
the trial court has evaluated class certification using improper criteria or an incorrect
legal analysis.” (Ghazaryan v. Diva Limousine, Ltd. (2008) 169 Cal. App. 4th 1524,
1530.) If the trial court utilizes improper criteria or incorrectly analyzes the case, an
appellate court is required to reverse even if there is substantial evidence to support the
trial court’s decision. (Bartold v. Glendale Federal Bank (2000) 81 Cal. App. 4th 816,
828-829.)
As a consequence, we must review the trial court’s reasons for denying class
certification. “In reviewing an order denying class certification, we consider only the
reasons given by the trial court for the denial, and ignore any other grounds that might
support denial.” (Quacchia v. DaimlerChrysler Corp. (2004) 122 Cal. App. 4th 1442,
1447.) The problem here is that the trial court parroted the ultimate finding needed to
deny certification but did not provide any insight into its analytic route in reaching that
finding. In short, the trial court did not provide the reasons for its ultimate finding
thereby foreclosing the type of review dictated by the standard of review of a denial of
class certification. We cannot review the trial court’s finding of ultimate facts in denying
class certification without some insight into the analytical route by which the trial court
reached its finding. The trial court’s failure to explain itself is fatal. A trial court cannot
stymie appellate review by simply remaining mute and thereby failing to reveal whether
it used either improper criteria or an incorrect legal analysis.
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II
Important Precedent in Wage and Hour Class Actions
The facts in Jones, supra, 221 Cal. App. 4th 986, bear notable similarity to the facts
before us.
In Jones, insurance claims representatives filed a class complaint against Farmers
Insurance Exchange (Farmers) seeking damages for violations of California’s wage and
hour laws. (Jones, supra, 221 Cal.App.4th at pp. 988-989.) Similar to the technicians’
claims for drive time, the plaintiffs’ theory of recovery was that Farmers applied a
uniform policy denying all putative class members compensation for “ ‘computer sync
time’ ” they performed at home before the beginning of their shift. (Id. at p. 996.)
Farmers, like Raley’s, insisted it had no uniform policy denying putative class members
for off-the-clock work. Rather individual issues, in Farmers’s view, made class treatment
ill advised. Farmers argued that individual issues included “determining what tasks each
employee performed before the beginning of his or her shift, whether such activities were
de minimis and whether the employee’s supervisor was aware of any off-the-clock work.
It filed declarations by APD claims representatives and others stating generally that they
were not required to perform unpaid preshift work, that they requested and received
approval to work overtime if necessary, and that the time required to start up their
computers in the morning and access the ServicePower program was minimal.” (Id. at
p. 996.)
Like here, the trial court concluded that common issues of law or fact did not
predominate over individual issues and class certification would not provide substantial
benefits to litigants and the courts. (Jones, supra, 221 Cal.App.4th at p. 989.) The Court
of Appeal reversed and, contrary to the trial court, held that common issues
predominated. The court explained that the existence of a uniform policy “is a factual
question that is common to all class members and is amenable to class treatment.
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Whether such a policy, if it exists, deprives employees of compensation for work for
which they are entitled to compensation is a legal question that is common to all class
members and is amenable to class treatment.” (Id. at p. 996.)
The court concluded “that the trial court applied improper criteria by focusing on
individual issues concerning the right to recover damages rather than evaluating whether
the theory of recovery is amenable to class treatment.” (Jones, supra, 221 Cal.App.4th at
p. 997.) The court further explained: “Plaintiffs’ theory of recovery based on the
existence of a uniform policy denying compensation for preshift work presents
predominantly common issues of fact and law. Farmers’s liability depends on the
existence of such a uniform policy and its overall impact on its APD claims
representatives, rather than individual damages determinations. [Citation.] Moreover,
the trial court erred to the extent that its ruling was based on its evaluation of the merits
of Plaintiffs’ claim as to the existence of such a uniform policy.” (Ibid.)
Raley’s evidence and arguments were nearly identical to those introduced by
Farmers in Jones. It too vehemently denied any uniform policies or practices regarding
drive time, meal time, or reimbursement for the technicians’ personal tools. It too
submitted declarations by individual employees stating they had completed personal
errands in company vehicles, they never were denied an hour for meals, and they either
were not required to purchase tools or they were reimbursed when they did.1
Unlike the trial court in Jones, however, we cannot ascertain whether the trial
court relied on this evidence or other considerations. Whereas the trial court in Jones
articulated its reasons for denying class certification which, the Court of Appeal
determined, were based on improper criteria, the trial court did not provide us with the
reasons for finding that common issues did not predominate. Raley’s central argument,
1 Because we must remand the case to the trial court for a statement of reasons, we need
not address the technicians’ objections to Raley’s declarations.
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however, mirroring the same argument raised by Farmers, is that individual issues render
a class action unmanageable and unadvisable. Given the risk the court may have focused
on the individual issues concerning the right to recover damages rather than the
technicians’ theory of recovery, we must reverse and remand.
In Ayala, supra, 59 Cal. 4th 522, the trial court denied class certification on
grounds similar to the trial court in Jones. “It concluded common issues did not
predominate because resolving the carriers’ employee status would require ‘heavily
individualized inquiries’ into Antelope Valley’s control over the carriers’ work.
Moreover, the claims for overtime and for meal and rest breaks would require additional
claim-specific individualized inquiries. Because individual issues predominated, class
resolution of the claims was not superior to individual lawsuits by each carrier.” (Id. at
p. 529.) The Supreme Court reiterated the standard of review: “We review the trial
court’s actual reasons for granting or denying certification; if they are erroneous, we must
reverse, whether or not other reasons not relied upon might have supported the ruling.”
(Id. at p. 530.)
What is particularly relevant about Ayala is the Supreme Court’s observation that
the trial court lost sight of the threshold and dispositive question. At the certification
stage, “the relevant inquiry is not what degree of control Antelope Valley retained over
the manner and means of its papers’ delivery. It is, instead, a question one step further
removed: Is Antelope Valley’s right of control over its carriers, whether great or small,
sufficiently uniform to permit classwide assessment?” (Ayala, supra, 59 Cal.4th at
p. 533.) Framing the right question, it turns out, can be dispositive. The court explained:
“The difficulties with the court’s ruling on class certification thus lie not in the answers
given, but the questions asked. A certification decision is reviewed for abuse of
discretion, but when the supporting reasoning reveals the court based its decision on
erroneous legal assumptions about the relevant questions, that decision cannot stand.
[Citations.] . . . That some other analytical path might, on this record, support the same
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disposition matters not; because the reasons given are unsound, the ruling must be
reversed.” (Id. at pp. 537-538.)
At issue in Ayala was whether the putative class members were employees or
independent contractors. The trial court focused on the multitude of ways in which
Antelope Valley exercised or did not exercise control over the plaintiffs. But, as the
court admonished, the question was not how the newspaper exercised control but whether
it had the right to control. Pertinent to disposition of the appeal of the denial of class
certification was the determination whether the right to control was common to all the
carriers.
Similarly, the technicians allege that Raley’s retained the right to control them
whenever they were driving company vehicles, which included the drive time to the first
store in the morning and home from the last store they serviced in the afternoon. As in
Ayala, the question is not whether different managers exercised control in a myriad of
ways with different categories of technicians, but whether, as the technicians allege,
Raley’s had the right to control. From the trial court’s cursory finding, we cannot
determine whether it understood the distinction and therefore whether it relied on
improper criteria or inaccurate assumptions. The trial court need not resolve that
question on the merits, but it must properly articulate the question so as to determine
whether the right to control is a common question amenable to class treatment.
III
Dailey v. Sears, Roebuck & Co.
Relying on Dailey v. Sears, Roebuck & Co., supra, 214 Cal. App. 4th 974 (Dailey),
Raley’s insists the trial court’s order is not deficient. Raley’s maintains the court stated
all that needed to be said and the record can fill in the gaps. We agree that Dailey
supports the trial court’s perfunctory order. But we must disagree with the court’s
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analysis in Dailey because it is inconsistent with the well established standard of review
of a decision to deny class certification in a wage and hour case.
To reiterate the standard of review, we turn to the succinct synopsis provided by
the Fourth District in Knapp v. AT&T Wireless Services, Inc. (2011) 195 Cal. App. 4th 932
as follows: “Trial courts have discretion in granting or denying motions for class
certification because they are well situated to evaluate the efficiencies and practicalities
of permitting a class action. [Citation.] Despite this grant of discretion, appellate review
of orders denying class certification differs from ordinary appellate review. Under
ordinary appellate review, we do not address the trial court’s reasoning and consider only
whether the result was correct. [Citation.] But when denying class certification, the trial
court must state its reasons, and we must review those reasons for correctness. [Citation.]
We may only consider the reasons stated by the trial court and must ignore any
unexpressed reason that might support the ruling.” (Id. at p. 939.)
The court’s reasoning in Dailey stands in stark contrast to this rather unusual
standard of review. The putative class members argued the trial court failed to
sufficiently explain its reasons for denying class certification. The Court of Appeal
acknowledged the appropriate standard of review, but immediately undermined it. The
court recognized that the trial court was required to state its reasons and that, on appeal,
the appellate court was required to ignore any grounds, other than the grounds provided
by the trial court. But the court went on to do just that.
The court in Dailey excused the court’s “succinct” order noting “the law does not
demand great detail from the trial court.” (Dailey, supra, 214 Cal.App.4th at p. 986.) In
a blatant contradiction to the standard of review compelling appellate review of only the
trial court’s reasons, the court deemed the order sufficient for review purposes “so long
as the basis for the court’s ruling may be discerned from the record.” (Ibid.) The record
assured the Dailey court the trial court had considered all the submissions and arguments
of counsel and cited appropriate legal principles. The court concluded: “To be sure, a
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more detailed explanation of the basis for a class certification ruling generally is
desirable. The law, however, does not require any particular level of detail. We
conclude the trial court’s order, elucidated by the parties’ briefing and oral arguments, is
sufficient to permit meaningful appellate review in this case.” (Id. at p. 987.)
To turn to the record to concoct some basis for the trial court’s denial of
certification is to abolish the relevant standard of review, ignore the trial court’s
reasoning, and apply ordinary appellate review contrary to the legion of cases that
prohibit appellate revisionism. This we cannot do. The Supreme Court has clearly
stated: “We review the trial court’s actual reasons for granting or denying certification; if
they are erroneous, we must reverse, whether or not other reasons not relied upon might
have supported the ruling.” (Ayala, supra, 59 Cal.4th at p. 530.) The court in Dailey
violated this basic precept. We reject Raley’s reliance on a case at odds with the
fundamental scope of our task as defined by the Supreme Court.
DISPOSITION
The judgment is reversed and the case is remanded to the trial court to articulate a
statement of reasons for approving or denying class certification. Plaintiffs shall recover
costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1) & (2).)
RAYE , P. J.
We concur:
HULL , J.
MURRAY , J.
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Filed 3/12/19
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
THIRD APPELLATE DISTRICT
(Yolo)
----
ROGER MYERS et al., C075125
Plaintiffs and Appellants, (Super. Ct. No. CV112668)
v. ORDER CERTIFYING
OPINION FOR
RALEY'S, PUBLICATION
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of Yolo County, Daniel P.
Maguire, Judge. Reversed with directions.
Righetti Glugoski, Matthew Righetti, John Glugoski and Michael Righetti for
Plaintiffs and Appellants.
Delfino Madden O'Malley Coyle & Koewler, Daniel J. Coyle and Shaye Schrick
for Defendant and Respondent.
1
THE COURT:
The opinion in the above-entitled matter filed on February 13, 2019, was not
certified for publication in the Official Reports. For good cause it now appears that the
opinion should be published in the Official Reports and it is so ordered.
BY THE COURT:
RAYE , P. J.
HULL , J.
MURRAY , J.
2