Jones v. Farmers Ins. Exchange CA2/3 ( 2013 )

Filed 4/16/13 Jones v. Farmers Ins. Exchange CA2/3
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION THREE
KWESI JONES et al., B237765
Plaintiffs and Appellants, (Los Angeles County
Super. Ct. No. BC412413)
v.
FARMERS INSURANCE EXCHANGE,
Defendant and Respondent.
APPEAL from an order of the Superior Court of Los Angeles County,
Maureen Duffy-Lewis, Judge. Affirmed.
Thierman Law Firm, Mark R. Thierman, Jason J. Kuller; Eric M. Epstein;
United Employees Law Group and Walter Haines for Plaintiffs and Appellants.
Seyfarth Shaw, Candice T. Zee, George Preonas, Andrew Paley and Eric Steinert
for Defendant and Respondent.
_______________________________________
Kwesi Jones, on behalf of himself and others similarly situated (collectively
Plaintiffs), filed a class action complaint against Farmers Insurance Exchange (Farmers)
alleging wage and hour violations. Plaintiffs appeal the denial of their motion for class
certification and the striking of their amended class certification motion. Plaintiffs
contend the trial court erred in concluding that common issues of fact and law do not
predominate over individual issues, that class certification would not provide substantial
benefits to litigants and the courts, and that Jones was not an adequate class
representative. We conclude that plaintiffs have shown no prejudicial abuse of
discretion and will affirm the order.
FACTUAL AND PROCECURAL BACKGROUND
1. Factual Background
Farmers employs claims representatives to adjust insurance claims for physical
damage to automobiles. “Auto Physical Damage” (APD) claims representatives spend
most of their time in the field inspecting damaged vehicles at auto body shops or other
locations, meeting with claimants, negotiating the settlement of claims, and accessing
and entering information onto Farmers‟s database using laptop computers. They obtain
their assignments using a computer program known as ServicePower, which they access
using laptop computers. Claims representatives travel to their first assignment of the
day from their homes rather than from an office, and their travel time to their first
assignment is uncompensated unless it exceeds their normal travel time.
Farmers issued a personalized memorandum with the subject line “Work Profile”
to each APD claims representative shortly after the ServicePower program was first
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implemented in 2008. The memorandum stated the normal work hours for each claims
representative and stated that each claims representative was required to be present at
the location of his or her first assignment at the beginning of the workday. It stated that
driving time from the employee‟s home to the first assignment of the day and from the
last assignment of the day back home was not compensable unless the time exceeded
the employee‟s normal commute time or the employee, with the approval of
a supervisor, was performing compensable administrative work at home.
The “Work Profile” memorandum also stated that claims representatives might
be required to perform work tasks at home for which they would not be compensated. It
described compensable and noncompensable work tasks as follows:
“1.) Computer sync time which ordinarily takes minimal time to perform and is
not compensable. For example, taking a few minutes to sync your computer, obtaining
assignments/driving directions before getting in your car and driving to your first
appointment. Your work day does not begin until you arrive at your first assignment,
unless your commute was longer than their normal commute.
“2.) Administrative, which is defined as „principle‟ work and is compensable.
For example, you take 30 minutes to perform required administrative duties, with
supervisor approval before getting in your car and driving to your first assignment.
Because the administrative work is considered principle work you will be compensated
for this time, plus all drive time to your first assignment. The same would be true for
the drive home if administrative work needs to be completed at home to end the day.”
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Jones worked for Farmers as a claims representative from March 2006 until
September 2008, when Farmers discharged him for an alleged pattern of reporting that
he was working in the field when he was actually at home. Jones filed a complaint
against Farmers regarding his discharge. That action has been settled and dismissed.
2. Trial Court Proceedings
Plaintiffs filed their complaint against Farmers in the present action in April 2009
and filed a first amended complaint in May 2010 alleging that Farmers failed to
compensate its APD claims representatives for work performed before the beginning of
their scheduled shifts. Plaintiffs allege that such unpaid work includes starting up their
computer each day, logging on to the ServicePower program, obtaining their first
assignment, downloading property damage estimate forms, contacting auto body shops
to confirm the location of damaged vehicles, contacting the insured and driving to the
auto body shop or other location of their first assignment.
Plaintiffs allege counts for (1) unpaid overtime; (2) failure to provide itemized
wage statements; (3) failure to pay minimum wages; (4) civil penalties under Labor
Code section 2699; and (5) unfair competition. They seek damages, statutory penalties
and restitution. Each count is alleged both by Jones individually and on behalf of
a class of current or former Farmers employees who are not exempt from California‟s
overtime laws and who worked as APD claims representative and used the
ServicePower program to obtain their work assignments.
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Plaintiffs filed a motion for class certification in March 2011 seeking to certify
the same class described in the complaint.1 The motion was supported by the
declarations of 51 putative class members. The declarants stated, generally, that they
were required to perform various tasks in the morning before arriving at the location of
their first assignment, as alleged in the complaint, but were not compensated for the
time spent performing those tasks. They stated that their work shifts generally began
upon their arrival at the location of their first assignment or at 8:00 a.m. and that they
spent, on average, 4.28 hours per week performing unpaid work before the beginning of
their shifts. Plaintiffs argued that Farmers had a company-wide policy of requiring
APD claims representatives to work at home without compensation and that the “Work
Profile” memorandum was evidence of this policy.
Farmers filed an ex parte application to continue the hearing on the motion to
August 19, 2011. The trial court granted the application on March 30, 2011, continuing
1
Plaintiffs sought certification for two classes defined as follows:
“A. Class „A‟ is defined as all current or former non-exempt employees
employed by Defendant as APD Claims Representatives, Senior APD Claims
Representatives, and Special APD Claims Representatives, in the State of California,
within the four years preceding the filing of the original Complaint to the date entry of
judgment, who used a package of computer software called ServicePower to obtain their
assignments for the day. [¶] B. Class „B‟ is defined as all current or former
non-exempt employees employed by Defendant as APD Claims Representatives, Senior
APD Claims Representatives, Special APD Claims Representatives, in the State of
California, within the four years preceding the filing of the original Complaint to the
date of entry of judgment, who used a package of computer software called
ServicePower to obtain their assignments for the day, and who were not furnished either
as a detachable part of the check, draft or voucher paying the employee‟s wages, or by
separate document, an accurate itemized statement showing the total hours worked by
each employee and/or furnished with all applicable hourly rates in effect during the pay
period and the corresponding number of hours worked at each hourly rate by the
employee in violation of California Labor Code § 226.”
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the hearing to August 19, 2011. Plaintiffs filed an amended class certification motion in
May 2011 seeking to modify the class definition to include all of the previously
described employees who used either ServicePower or the Pathways program to obtain
their work assignments. The court continued the hearing on the class certification
motion to October 28, 2011.
Farmers opposed the class certification motion arguing that it had no uniform
policy requiring unpaid preshift work and, absent such a policy, individual issues
predominated and class treatment was inappropriate. Farmers argued that its claims
representatives were not required to work off-the-clock and were prohibited from doing
so, and argued that the “Work Profile” memorandum did not show otherwise. It also
argued that Jones was not an adequate class representative and that his claims were not
typical of those of the class.
Farmers filed declarations by 11 current or former APD field claims supervisors
or managers, five claims representatives, and the director of the Los Angeles claims
service division. The declarations stated, generally, that claims representatives
regularly received their first assignment of the day on the afternoon of the previous
workday and made initial contact with the claimant at that time. They stated that if the
claims representatives needed additional time to prepare for an early morning
appointment, they requested and regularly received approval to work overtime and that
they were prohibited from working outside of their scheduled shifts without prior
authorization.
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Farmers filed a motion in September 2011 to strike plaintiffs‟ amended motion
for class certification. It argued that the amended motion was an attempt to amend the
complaint to expand the class definition without filing a motion for leave to amend the
complaint. It argued that the motion therefore was procedurally improper and should be
stricken under Code of Civil Procedure section 436, subdivision (a) as “irrelevant, false,
or improper” (ibid.) matter. Farmers also argued that its employees did not obtain
assignments through the Pathways program and that Farmers would be prejudiced by an
expansion of the class definition after two years of litigation. Plaintiffs opposed the
motion to strike.
The trial court heard the class certification motion and the motion to strike on
October 28, 2011. In a minute order filed on November 3, 2011, the court concluded
that the class was sufficiently numerous and ascertainable and that Jones‟s claims were
typical of those of the class. The court found, however, that Jones was not an adequate
class representative because (1) he failed to file a declaration in support of the motion
and therefore failed to show that he understood his fiduciary obligation owed to the
class, and (2) “he was terminated for manipulating Service Power to indicate that he
was working when, in fact he was not,” showing a “lack of credibility.”
The trial court also found that common issues did not predominate. It stated that
the parties disputed what tasks were required to be performed before the beginning of
the shift, that Farmers‟s evidence showed that it did not always deny requests for
overtime to complete some tasks and that plaintiffs therefore had “not demonstrated that
defendant has a classwide policy of refusing to pay overtime.” The court stated,
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“Whether a particular class member would be approved for overtime to complete first
contact tasks creates individualized questions that must be addressed before it can be
determined that defendant did not compensate the class member for off-the-clock
work.”
The trial court stated further that whether the putative class members had time to
complete the required tasks before the first appointment of the day also involved
individualized inquiries and numerous variables including, “1) when a particular
assignment was posted to Service Power; 2) how busy the class member was on the day
the assignment was posted; 3) whether the amount of time spent on first assignment
tasks was de minimus; 4) whether the class member requested overtime to perform first
contact tasks; 5) the first appointment time assigned to a class member as compared to
the start of their shift; and 6) commute time.” It stated that these individualized
inquiries compelled the conclusion that common questions did not predominate. The
court also stated that the lack of commonality meant that a class action was not
a superior method for resolving the dispute.
The trial court stated with respect to the motion to strike the amended motion for
class certification that Code of Civil Procedure section 437 was inapplicable because the
motion was not a pleading. The court concluded, however, that there was no legal basis
for the proposed amendment and therefore granted the motion to strike.
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Plaintiffs timely appealed the order denying the motion for class certification and
the striking of their amended class certification motion.2
CONTENTIONS
Plaintiffs contend (1) common issues of law and fact predominate, primarily with
respect to the existence of a uniform policy denying compensation for legally
compensable work performed prior to the beginning of the shift; (2) a class action is
a superior means to conduct this litigation; (3) Jones is an adequate class representative;
and (4) the striking of plaintiffs‟ amended class certification motion was error.
DISCUSSION
1. Standard of Review
We review an order granting or denying class certification for abuse of
discretion. (Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 326-327
(Sav-On).) A trial court is afforded great discretion in ruling on class certification.
Such a ruling generally will not be disturbed on appeal unless it is (1) not supported by
substantial evidence, (2) based on improper criteria, or (3) based on erroneous legal
assumptions. (Fireside Bank v. Superior Court (2007) 40 Cal.4th 1069, 1089 (Fireside
Bank).)
“Under this standard, an order based upon improper criteria or incorrect
assumptions calls for reversal „ “even though there may be substantial evidence to
2
An order effectively terminating class claims while allowing individual claims to
proceed is appealable under the “death knell” doctrine. (In re Baycol Cases I & II
(2011) 51 Cal.4th 751, 757-759.)
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support the court‟s order.” ‟ [Citations.] Accordingly, we must examine the trial
court‟s reasons for denying class certification. „Any valid pertinent reason stated will
be sufficient to uphold the order.‟ [Citation.]” (Linder v. Thrifty Oil Co. (2000)
23 Cal.4th 429, 436.)
2. Class Certification Requirements
A party moving for class certification must show “(1) [] a sufficiently numerous,
ascertainable class, (2) [] a well-defined community of interest, and (3) that certification
will provide substantial benefits to litigants and the courts, i.e., that proceeding as
a class is superior to other methods. [Citations.] In turn, the „community of interest
requirement embodies three factors: (1) predominant common questions of law or fact;
(2) class representatives with claims or defenses typical of the class; and (3) class
representatives who can adequately represent the class.‟ [Citation.]” (Fireside Bank,
supra, 40 Cal.4th at p. 1089.)
“The certification question is „essentially a procedural one that does not ask
whether an action is legally or factually meritorious.‟ [Citation.] A trial court ruling on
a certification motion determines „whether . . . the issues which may be jointly tried,
when compared with those requiring separate adjudication, are so numerous or
substantial that the maintenance of a class action would be advantageous to the judicial
process and to the litigants.‟ [Citations.]” (Sav-On, supra, 34 Cal.4th at p. 326.) The
focus in a certification dispute is on whether common or individual questions are likely
to arise in the action, rather than on the merits of the case. (Id. at p. 327.)
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“The „ultimate question‟ the element of predominance presents is whether „the
issues which may be jointly tried, when compared with those requiring separate
adjudication, are so numerous or substantial that the maintenance of a class action
would be advantageous to the judicial process and to the litigants.‟ [Citations.] The
answer hinges on „whether the theory of recovery advanced by the proponents of
certification is, as an analytical matter, likely to prove amenable to class treatment.‟
[Citation.] A court must examine the allegations of the complaint and supporting
declarations [citation] and consider whether the legal and factual issues they present are
such that their resolution in a single class proceeding would be both desirable and
feasible. As a general rule if the defendant‟s liability can be determined by facts
common to all members of the class, a class will be certified even if the members must
individually prove their damages.‟ [Citations.]” (Brinker Restaurant Corp. v. Superior
Court (2012) 53 Cal.4th 1004, 1021-1022, fn. omitted.)
Thus, a class may be certified even if class members must individually prove
their right to recover damages and the amount of damages. But common issues do not
predominate if such individual issues are numerous and substantial compared to the
common issues. (City of San Jose v. Superior Court (1974) 12 Cal.3d 447, 459; Arenas
v. El Torito Restaurants, Inc. (2010) 183 Cal.App.4th 723, 732; Acree v. General
Motors Acceptance Corp. (2001) 92 Cal.App.4th 385, 396.)
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3. The Trial Court Properly Decided that Common Issues
Do Not Predominate
Plaintiffs‟ theory of recovery is that a uniform policy applicable to all putative
class members denied them compensation for work performed at home before the
beginning of their scheduled shifts. The existence of such a policy is a factual question
that is common to all class members and is amenable to class treatment. 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.
Plaintiffs contend the trial court decided that common issues did not predominate
based in part on the existence of a factual dispute as to whether Farmers had a uniform
policy denying compensation for legally compensable work. They argue that the court
improperly focused on the merits and applied improper criteria in this regard. We
disagree. We believe that the court referred to the factual dispute as to the existence of
a uniform policy not as a reason to deny certification, but instead to explain why it is
necessary to decide numerous individual issues relating to each employee‟s right to
recover. Regardless of whether it is true that the existence of such a factual dispute
makes it necessary to decide the individual issues identified by the trial court, as
suggested by the trial court, or whether those individual issues must be addressed even
if there were no factual dispute regarding the existence of a uniform policy, we
conclude that the trial court did not improperly focus on the merits in this regard.
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The trial court stated that whether a particular class member would have been
approved for overtime if he or she had requested it and whether a class member had
time to complete the required tasks before his or her first appointment of the day were
individual issues. The court also enumerated several other individual issues, including,
“1) when a particular assignment was posted to Service Power; 2) how busy the class
member was on the day the assignment was posted; 3) whether the amount of time spent
on first assignment tasks was de minimus; 4) whether the class member requested
overtime to perform first contact tasks; 5) the first appointment time assigned to a class
member as compared to the start of their shift; and 6) commute time.”
Whether these individual issues are so numerous and substantial compared to the
common issues regarding a uniform policy that the common issues do not predominate
is a question within the trial court‟s discretion. Plaintiffs have not shown an absence of
substantial evidence to support the trial court‟s decision or that the decision is based on
improper criteria or erroneous legal assumptions. We therefore conclude that Plaintiffs
have shown no abuse of discretion in the trial court‟s decision that common issues do
not predominate. The trial court properly denied class certification on this basis.
In light of our conclusion, Plaintiffs‟ contentions that the trial court‟s superiority
analysis was flawed and that Jones is an adequate class representative are moot.
4. Plaintiffs Have Shown No Prejudicial Error in the Striking of
Their Amended Class Certification Motion
Plaintiffs‟ amended class certification motion differed from the original motion
in that they sought to certify a class of APD claims representatives who used either
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ServicePower or another program, known as Pathways, to obtain their work
assignments. They contend the striking of their amended motion was error, but they do
not argue that their proposed amendment to the class definition would affect the
predominance analysis in any material way. Plaintiffs therefore have failed to show any
prejudice, as required for a reversal. (Cal. Const., art. VI, § 13; Code Civ. Proc., § 475;
Cassim v. Allstate Ins. Co. (2004) 33 Cal.4th 780, 800.)
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DISPOSITION
The order denying the class certification motion and striking the amended class
certification motion is affirmed. Farmers is entitled to recover its costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
CROSKEY, J.
WE CONCUR:
KLEIN, P. J.
ALDRICH, J.
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