Caruso v. Gordon Tullett Logistics CA3

Filed 1/18/22 Caruso v. Gordon Tullett Logistics CA3
NOT TO BE PUBLISHED
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 This opinion has not been certified for publication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
THIRD APPELLATE DISTRICT
(Yolo)
----
PHILIP CARUSO, C089375
Plaintiff and Appellant, (Super. Ct. No. CVCV-18-
0545)
v.
ORDER MODIFYING
GORDON TULLETT LOGISTICS, LLC, OPINION AND DENYING
REHEARING
Defendant and Appellant.
[NO CHANGE IN
JUDGMENT]
THE COURT:
It is ordered that the opinion filed in this case on December 17, 2021, be modified
as follows:
On page three, Discussion part I, first full paragraph, remove the last two
sentences, and replace them with the following sentences: “The reporter’s transcript
includes only the trial court’s statement that it would grant the motion for reasons set
forth in GTL’s motion in limine. GTL argued in its motion in limine that review of the
wage order was de novo under section 98.2 and therefore evidence regarding the Labor
Commissioner’s proceedings and order in favor of Caruso were irrelevant, prejudicial,
and would result in undue consumption of time. Caruso contends the exclusion of Wage
Order No. 9-2001 made it impossible to present his case and establish the validity of his
wage claim.” The modified paragraph will now read:
Caruso contends the trial court erred in granting GTL’s motion in limine to
exclude Wage Order No. 9-2001. The reporter’s transcript includes only the trial court’s
1
statement that it would grant the motion for reasons set forth in GTL’s motion in limine.
GTL argued in its motion in limine that review of the wage order was de novo under
section 98.2 and therefore evidence regarding the Labor Commissioner’s proceedings and
order in favor of Caruso were irrelevant, prejudicial, and would result in undue
consumption of time. Caruso contends the exclusion of Wage Order No. 9-2001 made it
impossible to present his case and establish the validity of his wage claim.
On page three, Discussion part I, remove the third full paragraph beginning with
“We agree with GTL” and replace it with the following paragraphs including the
insertion of new footnote 2 and the renumbering of subsequent footnotes:
We disagree that it was impossible for Caruso to present his case in the trial de
novo. Under section 98.2, Caruso was entitled to present all the evidence that led the
Labor Commissioner to issue an order in his favor, as well as “entirely new
evidence . . . .” (Eicher v. Advanced Business Integrators, Inc. (2007) 151 Cal.App.4th
1363, 1381.) On the other hand, the “findings of the Labor Commissioner [were] entitled
to no weight whatsoever . . . .” (Sales Dimensions v. Superior Court (1979) 90
Cal.App.3d 757, 763.) Under section 98.2, “[r]eview is accorded not to the decision of
the commissioner, but to the underlying facts on which depends the merits of the
dispute.” (Ibid.; see Hernandez v. Mendoza (1988) 199 Cal.App.3d 721, 725.) Under
these standards, no purpose could be served by introduction of Wage Order No. 9-2001
but to convey the Labor Commissioner’s findings and decision to the trier of fact, which
were of no consequence in the trial de novo. The trial court did not abuse its discretion in
excluding evidence regarding Wage Order No. 9-2001.
“Moreover, even where evidence is improperly excluded, the error is not
reversible unless ‘ “it is reasonably probable a result more favorable to the appellant
would have been reached absent the error. [Citations.]” [Citation.]’ [Citations.]”
(Tudor Ranches, Inc. v. State Compensation Insurance Fund (1998) 65 Cal.App.4th
1422, 1431-1432; see Agam v. Gavra (2015) 236 Cal.App.4th 91, 110, fn. 6.) Caruso’s
2
trial brief argued that “Section 2(E) of the Order defines ‘employ’ as to ‘engage, suffer or
permit to work.’ Section 2(G) of the Order defines ‘employer’ as ‘any person as defined
in Section 18 of the Labor Code, who directly or indirectly, or through an agent or any
other person, employs or exercises control over the wages, hours, or working conditions
of any person.” But introduction of the definitions of “employ” and “employer” in Wage
Order 9-2001 would not have altered the outcome of the trial. The parties agreed that the
test for whether Caruso was an employee or an independent contractor was set forth in
S.G. Borello & Sons, Inc. v. Dept. of Industrial Relations (1989) 48 Cal.3d 341 (Borello),
which identified multiple factors to be considered. 1 Caruso devoted the lion’s share of
his trial brief to argument that applying those factors weighed in his favor and created a
presumption of employment that GTL could not overcome.
At trial, the trial court instructed the jury with CACI 3704, which sets forth the
factors of the Borello test in cases where the existence of employee status is disputed.
Caruso objected to GTL’s proposed version of CACI 3704, which required him to prove
that he was GTL’s employee. The trial court instructed the jury with Caruso’s version
placing the burden on GTL to prove that Caruso was not its employee. Under established
appellate standards, we are required to presume the jury followed the trial
court’s instructions in the absence of contrary evidence. (Cassim v. Allstate Ins.
Co. (2004) 33 Cal.4th 780, 803-804.) In closing argument, Caruso’s counsel referenced
1 Borello described a six-factor test: “Besides the ‘right to control the work,’ the factors
include (1) the alleged employee’s opportunity for profit or loss depending on his
managerial skill; (2) the alleged employee’s investment in equipment or materials
required for his task, or his employment of helpers; (3) whether the service rendered
requires a special skill; (4) the degree of permanence of the working relationship; and
(5) whether the service rendered is an integral part of the alleged employer’s business.”
(Borello, supra, 48 Cal.3d at pp. 354-355.) The court also referred to additional factors
derived from the Restatement Second of Agency. (Id. at p. 351.) The court concluded
that “all are logically pertinent to the inherently difficult determination” whether an
individual is an employee or independent contractor. (Id. at p. 355.)
3
CACI 3704 and argued “the first and most significant thing is that the defendant, the
company, has to prove that Mr. Caruso was not his employee,” and then argued each
factor at length. GTL’s counsel argued the factors favored GTL’s position.
Instructed by the trial court and told by counsel for the parties in closing to
consider the Borello factors in determining whether Caruso was GTL’s employee, the
jury found he was not. On this record, even if Wage Order No. 2001-9 had been admitted
as an exhibit, it would not have changed the jury’s verdict.
This modification does not change the judgment.
The petition for rehearing is denied.
FOR THE COURT:
/S/
HULL, Acting P. J.
/S/
MAURO, J.
/S/
MURRAY, J.
4
Filed 12/17/21 Caruso v. Gordon Tullett Logistics CA3 (unmodified opinion)
NOT TO BE PUBLISHED
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
THIRD APPELLATE DISTRICT
(Yolo)
----
PHILIP CARUSO,
Plaintiff and Appellant, C089375
v. (Super. Ct. No. CVCV-18-
0545)
GORDON TULLETT LOGISTICS, LLC,
Defendant and Appellant.
Truck driver Philip Caruso filed a claim with the Labor Commissioner’s office
against trucking company Gordon Tullett Logistics, LLC (GTL) for unpaid wages and
other amounts. A hearing officer awarded Caruso $84,441.68, but in an appeal to the
Yolo County Superior Court, a jury found that Caruso did not perform work for GTL and
was not an employee of GTL. Nevertheless, the trial court denied GTL’s request for
attorney’s fees and costs.
Caruso now contends the trial court erred in granting GTL’s motions in limine
precluding reference at trial to a transportation industry wage order and the hearing
1
officer’s award. GTL cross-appeals, challenging the trial court’s denial of its motion for
attorney’s fees and costs. We will affirm the judgment and order.
BACKGROUND
We limit our recitation of the background to the circumstances relevant to the
contentions on appeal. (See Franklin Mint Co. v. Manatt, Phelps & Phillips, LLP (2010)
184 Cal.App.4th 313, 321; San Pasqual Band of Mission Indians v. State of California
(2015) 241 Cal.App.4th 746, 750.)
Caruso filed a claim against GTL with the Labor Commissioner’s office for
unpaid wages and pay, reimbursement of unauthorized deductions, unreimbursed
business expenses, and a penalty under Labor Code section 203. 2 The hearing officer
designated by the Labor Commissioner awarded Caruso $84,441.68. GTL appealed to
the Yolo County Superior Court under section 98.2, subdivision (a), which allows for a
trial de novo in the superior court. (Post v. Palo/Haklar & Associates (2000) 23 Cal.4th
942, 948.) The Labor Commissioner appointed an employee, David Cross, to represent
Caruso in the appeal.
A jury trial was scheduled and the trial court granted GTL’s motion in limine to
preclude Caruso from referring to the hearing officer’s order and Industrial Welfare
Commission Order No. 9-2001 Regulating Wages, Hours and Working Conditions in the
Transportation Industry (Wage Order No. 9-2001). After three days of witness
testimony, jury instructions and closing argument, the jury found that Caruso did not
perform work for GTL and was not an employee of GTL.
2 Labor Code section 203, subdivision (a) provides in relevant part that if an employer
willfully fails to pay in accordance with enumerated sections of the Labor Code “any
wages of an employee who is discharged or who quits, the wages of the employee shall
continue as a penalty from the due date thereof at the same rate until paid or until an
action therefor is commenced; but the wages shall not continue for more than 30 days.”
Undesignated statutory references are to the Labor Code.
2
GTL moved in the trial court for $121,566.38 in attorney’s fees and $8,631.45
in costs under section 218.5 and Code of Civil Procedure section 128.5. The trial court
denied the motion, concluding that section 218.5 and Code of Civil Procedure
section 128.5 were not applicable.
Caruso filed a notice of appeal from the judgment and GTL filed a notice of
appeal from the order denying its motion for attorney’s fees and costs.
DISCUSSION
I
Caruso contends the trial court erred in granting GTL’s motion in limine to
exclude Wage Order No. 9-2001. The reporter’s transcript includes only the trial court’s
statement that it would grant the motion “for reasons set forth in defendant’s motion in
limine” without indicating what those reasons were. Caruso did not include GTL’s
motion, or any opposition Caruso may have filed, in the record on appeal.
We review the trial court’s grant or denial of a motion in limine for abuse of
discretion. (Piedra v. Dugan (2004) 123 Cal.App.4th 1483, 1493.) “ ‘A trial court’s
exercise of discretion in admitting or excluding evidence . . . will not be disturbed except
on a showing the trial court exercised its discretion in an arbitrary, capricious, or patently
absurd manner that resulted in a manifest miscarriage of justice . . . .’ [Citation.]” (San
Lorenzo Valley Community Advocates for Responsible Education v. San Lorenzo Valley
Unified School Dist. (2006) 139 Cal.App.4th 1356, 1419.)
We agree with GTL that Caruso forfeited this issue on appeal. (Hotels Nevada,
LLC v. L.A. Pacific Center, Inc. (2012) 203 Cal.App.4th 336, 348.) “ ‘It is the duty of an
appellant to provide an adequate record to the court establishing error. Failure to provide
an adequate record on an issue requires that the issue be resolved against appellant.
[Citation.]’ [Citation.] This principle stems from the well-established rule of appellate
review that a judgment or order is presumed correct and the appellant has the burden of
demonstrating prejudicial error. [Citations.] By failing to provide an adequate record,
3
appellant cannot meet his burden to show error and we must resolve any challenge to the
order against him. [Citation.]” (Ibid.) Without the motion, any opposition, or oral
argument on the record, “we cannot review the basis of the court’s decision.”
(Hernandez v. California Hospital Medical Center (2000) 78 Cal.App.4th 498, 502;
see also Ballard v. Uribe (1986) 41 Cal.3d 564, 574; Denham v. Superior Court (1970)
2 Cal.3d 557, 564.)
II
Caruso next contends the trial court did not correctly interpret the de novo
standard in Labor Code section 98.2 and erred in preventing him from referencing the
hearing officer’s order.
Although denoted an “appeal,” unlike a conventional appeal in a civil action, an
appeal under section 98.2 is de novo and allows for a new trial. (Post, supra, 23 Cal.4th
at pp. 947-948.) The decision of the hearing officer is not entitled to any weight. (Id. at
948.) The trial court judgment is subject to a conventional appeal to an appropriate
appellate court, where review is of the facts presented to the trial court, which may
include entirely new evidence. (Ibid.)
“Unlike an appeal in a civil action, the appeal of the commissioner’s decision to
the superior court under section 98.2, subdivision (a) nullifies the [commissioner’s]
decision, and the superior court conducts a new trial of the wage dispute. [Citation.]
‘The trial court “hears the matter, not as an appellate court, but as a court of original
jurisdiction, with full power to hear and determine [the wage claim] as if it had never
been before the labor commissioner.” ’ [Citation.]” (Arias v. Kardoulias (2012)
207 Cal.App.4th 1429, 1435.)
Moreover, a California employment law treatise advises that “[e]vidence of
matters that are legally irrelevant should be challenged by motion in limine if their
mention during trial may create a negative impression of the employer,” including
evidence “that the California Labor Commissioner awarded the plaintiff unpaid wages in
4
an underlying administrative action.” (Chin et al., Cal. Practice Guide: Employment
Litigation (The Rutter Group 2020) ¶¶ 19:916, 19:918, citing Petrosyan v. Prince Corp.
(2013) 223 Cal.App.4th 587, 590-591.)
We conclude the trial court did not misinterpret the de novo standard or abuse its
discretion in granting the motion in limine to exclude evidence of the hearing officer’s
order, which was legally irrelevant at the new trial under section 98.2.
We do not read the trial court’s in limine ruling as precluding Caruso from
referencing, as he contends, “labor laws and Mr. Caruso’s evidence presented at the
Labor Commissioner level.” Caruso was free to present any admissible evidence at trial
that he introduced in the Labor Commissioner proceedings, as well as new evidence that
he did not present in the underlying proceeding. But it was the province of the trial court
to instruct the jury on applicable law, including labor law, and the trial court did so on the
central issue of Caruso’s status as an employee or independent contractor. (See, e.g.,
Summers v. A.L. Gilbert Co. (1999) 69 Cal.App.4th 1155, 1185 [opinions of a lawyer
testifying as an expert on issues of law “were inadmissible because they usurped the
responsibility of the court to instruct the jury on the applicable law”].)
III
GTL contends the trial court erred in denying its motion for attorney’s fees under
section 218.5. We disagree.
Section 218.5, subdivision (a) provides in relevant part: “In any action brought for
the nonpayment of wages, fringe benefits, or health and welfare or pension fund
contributions, the court shall award reasonable attorney’s fees and costs to the prevailing
party if any party to the action requests attorney’s fees and costs upon the initiation of the
action. However, if the prevailing party in the court action is not an employee, attorney’s
fees and costs shall be awarded pursuant to this section only if the court finds that the
employee brought the court action in bad faith.”
5
“In general, a prevailing party may recover attorney’s fees only when a statute
or an agreement of the parties provides for fee-shifting. [Citation.] Labor Code
section 218.5 requires the awarding of attorney’s fees to the prevailing party ‘[i]n any
action brought for the nonpayment of wages, fringe benefits, or health and welfare or
pension fund contributions.’ This provision awards fees to the prevailing party whether it
is the employee or the employer; it is a two-way fee-shifting provision.” (Kirby v.
Immoos Fire Protection, Inc. (2012) 53 Cal.4th 1244, 1248.)
“Although section 218.5[, subdivision] (a) is a two-way fee-shifting statute
[citation], it has the potential to become a one-way or unilateral fee-shifting provision
if . . . the trial court finds a plaintiff did not bring the wage claim in bad faith. Courts
have uniformly recognized that such unilateral fee-shifting statutes ‘reflect a considered
legislative judgment that prevailing defendants should not receive fees.’ [Citation.]”
(Dane Elec Corp., USA v. Bodokh (2019) 35 Cal.App.5th 761, 773 (Dane Elec).)
“The sentence in section 218.5[, subdivision] (a) permitting a prevailing
nonemployee to recover attorney fees only if the trial court finds the wage claim was
brought in bad faith was added by Senate Bill No. 462 (2013-2014 Reg. Sess.).
(Stats. 2013, ch. 142, § 1; see Historical and Statutory Notes, 44 West’s Ann. Lab. Code
(2019 supp.) foll. § 218.5, p. 204.)” (Dane Elec, supra, 35 Cal.App.5th at p. 773.)
“The analysis by the Assembly Committee on the Judiciary sets forth the following
policy for the legislation: ‘This bill would clarify the existing two-way fee[-]shifting
provision of section 218.5 by expressly providing that where the prevailing party is a
non-employee (e.g., the employer), fees are to be awarded upon a judicial finding that
the employee brought the action in bad faith. The reason for a higher standard of course
is that wage laws reflect a fundamental policy of the state, the vindication of which is
largely left to employees. The premise of this bill is that the great expense and
unpredictability of exposure to attorney’s fees liability is likely to chill the pursuit of
potentially valid claims by employees of limited means, contrary to the important policy
6
objectives of the statutory scheme.’ (Assem. Com. on Judiciary, Analysis of Sen. Bill
No. 462 (2013-2014 Reg. Sess.) July 1, 2013, p. 3.)” (Dane Elec, at pp. 773-774.)
Thus, under section 218.5, a nonemployee is entitled to recover its attorney’s fees
and costs only where the nonemployee is the prevailing party in a court action brought by
an employee in bad faith. Such a situation might arise, for example, where a
nonemployee defendant prevailed before the Labor Commissioner and the employee
sought a trial de novo reiterating frivolous claims that were unsuccessful in the
underlying action. But here, the trial court denied the request for attorney’s fees by
stating: “While it could be argued the plaintiff’s case may not have been the strongest,
that does not mean it was brought for an improper motive. This is particularly true
where, as here, [Caruso] prevailed in the underlying administrative matter.”
GTL contends that, even though the company is a nonemployee, no showing of
bad faith was required because the jury found that Caruso was not an employee, therefore
the second sentence of section 218.5, subdivision (a), does not apply. We conclude,
however, that GTL’s proposed interpretation would frustrate the intent of the Legislature.
The purpose of the 2013 amendment to the statute was to remove an obstacle to the
pursuit of wage claims by limiting the circumstances under which a prevailing
nonemployee would recover attorney’s fees and costs. (Dane Elec, supra,
35 Cal.App.5th at pp. 773-774.) The jury’s ultimate determination that Caruso was not a
GTL employee did not render inapplicable the requirement that GTL show Caruso
brought the action in bad faith.
Finally, GTL asserts that “[e]ven if it is assumed, arguendo, that GTL is required
to establish bad faith on the part of Caruso in connection with his claim (notwithstanding
the absence of an employer-employee relationship), the record supports such a finding as
against Caruso and his counsel with the Division of Labor.” GTL has not shown bad
faith.
7
We review the court’s decision that Caruso and the Labor Commissioner did not
act in bad faith for abuse of discretion. (Cruz, supra, 57 Cal.App.5th at p. 243.)
“However, to the extent that a trial court’s ruling is based on factual determinations, we
review the record for substantial evidence. [Citation.]” (Ibid.)
GTL highlights as evidence a response to a request for admission GTL
propounded to Caruso after GTL appealed the hearing officer’s order. GTL characterizes
Caruso’s admission as follows: “Caruso’s understanding in entering into the contractor
agreement was that he was a self-employed owner-operator (independent
contractor) . . . .” (Italics, bold omitted.) The request, however, asked Caruso to “Admit
that YOUR understanding in entering into the CONTRACTOR AGREEMENT was that
YOU were performing work as a self-employed independent owner/operator.” Caruso’s
response was “Admit; however, now I know that is not correct.”
Caruso thus indicated that his thinking on this issue had changed. This is
unsurprising given, for example, the complexity of the test for independent contractor
status under S.G. Borello & Sons, Inc. v. Dept. of Industrial Relations (1989) 48 Cal.3d
341, 351, which was utilized in this case by the parties, the Labor Commissioner, and the
trial court in instructing the jury.
In fact, the California Supreme Court in Dynamex Operations W. v. Superior
Court (2018) 4 Cal.5th 903 (Dynamex), recently adopted a simpler “ABC” test. (Id. at
pp. 916-917.)3 In People v. Uber Technologies, Inc. (2020) 56 Cal.App.5th 266, the
3 “Under this test, a worker is properly considered an independent contractor to whom a
wage order does not apply only if the hiring entity establishes: (A) that the worker is free
from the control and direction of the hirer in connection with the performance of the
work, both under the contract for the performance of such work and in fact; (B) that the
worker performs work that is outside the usual course of the hiring entity’s business; and
(C) that the worker is customarily engaged in an independently established trade,
occupation, or business of the same nature as the work performed for the hiring entity.”
(Dynamex, supra, 4 Cal.5th at pp. 916-917.)
8
court commented that “[c]ompared to the six-factor, fact-bound Borello test for
independent contractor status -- which can be very difficult for plaintiffs to meet at an
early stage of litigation, short of a full-blown trial -- the Dynamex court ‘create[d] a
simpler, clearer test for determining whether the worker is an employee or an
independent contractor,’ one that presumes a worker hired by an entity is an employee
and places the burden on the hirer to establish that the worker is an independent
contractor.” (Id. at pp. 301-302, quoting Dynamex, supra, 4 Cal.5th at p. 951, fn. 20.)
Under the circumstances, Caruso’s changed position on the employee-versus-
independent-contractor issue hardly evinces bad faith. 4
The remainder of GTL’s evidence of bad faith is (1) Caruso’s claim unsupported
by evidence that he earned $50.48 an hour and had worked 2080 hours for GTL, and
(2) that “[i]n what was almost certainly an effort to further slant the Labor
Commissioner’s proceedings in his favor, Plaintiff then falsely reported an insurance
claim against Defendant with the CHP.” These items, even if accepted as described by
GTL, are not sufficient to support a determination that the trial court abused its discretion
in determining that Caruso did not act in bad faith. (Cruz, supra, 57 Cal.App.5th at
p. 233 [“ ‘The standard “asks in substance whether the ruling in question ‘falls outside
the bounds of reason’ under the applicable law and the relevant facts.” [Citation.]’
[Citation.] ‘ “ ‘The burden is on the party complaining to establish an abuse of
discretion, and unless a clear case of abuse is shown and unless there has been a
miscarriage of justice[,] a reviewing court will not substitute its opinion and thereby
divest the trial court of its discretionary power.’ ” ’ [Citation.]”].)
4 We express no opinion on whether the trial court should have instructed the jury based
on the ABC test or whether a jury so instructed would have rendered a different verdict.
(See Garcia, supra, 28 Cal.App.5th at p. 572.)
9
We conclude the trial court did not abuse its discretion in denying GTL’s motion
for attorney’s fees and costs under section 218.5.
DISPOSITION
The judgment on a jury verdict and the order denying GTL attorney’s fees and
costs are affirmed. The parties shall bear their own costs on appeal.
/S/
MAURO, J.
We concur:
/S/
HULL, Acting P. J.
/S/
MURRAY, J.
10