Stone v. U.S. Security Associates CA2/5

Filed 3/14/23 Stone v. U.S. Security Associates CA2/5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
ROBERT STONE et al., B318986
Plaintiffs and Appellants, (Los Angeles County
Super. Ct. No. BC604257)
v.
U.S. SECURITY ASSOCIATES,
INC.,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of
Los Angeles County, Yvette M. Palazuelos, Judge. Affirmed.
The Dion-Kindem Law Firm, Peter R. Dion-Kindem; The
Blanchard Law Group and Lonnie C. Blanchard III for Plaintiffs
and Appellants.
Hunton Andrews Kurth, Jason P. Brown, Robert T.
Quackenboss, Trevor S. Cox and Cameron L. Davis for Defendant
and Respondent.
——————————
Appellants Robert Stone and Abraham Aguayo
appeal from a judgment entered in favor of Respondent
U.S. Security Associates, Inc. (USSA) granting USSA’s
separate motions for summary adjudication on the putative
class action complaint alleging a single cause of action for a
violation of the Fair Credit Reporting Act (FCRA; 15 U.S.C.
§ 1681 et seq.). The complaint alleged that USSA violated
the FCRA by failing to use a separate disclosure form when
it procured a consumer report on Stone, Aguayo, and other
putative class members during the employment hiring
process.
USSA filed a motion for summary adjudication
against Stone on the ground that he had released his FCRA
claim against USSA when he settled a separate case
against his former employer, Universal Protection Services
(UPS), a corporate affiliate of USSA. On appeal, Stone
argues the trial court erred in granting the motion,
asserting USSA did not present admissible evidence to
prove the requisite corporate relationship between UPS
and USSA, as necessary to establish that the release of his
claims against UPS also released his claim against USSA.
USSA also filed a motion for summary adjudication
against Aguayo on the grounds that he was precluded from
serving as a named class representative and his individual
and class claims were barred by the statute of limitations
and statute of repose governing FCRA claims. On appeal,
Aguayo argues the trial court erred in granting the motion
because his claim was timely filed based on (1) a date
established by agreement of the parties and prior court
2
order and (2) the principles of equitable tolling or the
relation back doctrine.
As we shall explain, neither Stone’s nor Aguayo’s
arguments have merit. USSA carried its burden on its
respective defenses to Stone’s and Aguayo’s claims. USSA
demonstrated it was entitled to judgment as a matter of
law, and neither Stone nor Aguayo presented a triable
issue of material fact warranting a trial. Thus, the trial
court properly granted USSA’s motions, and we affirm the
judgment.
FACTS AND PROCEDURAL BACKGROUND
A USSA is a private security company that operates
approximately 160 branches across the country and
employs over 50,000 people. USSA presented evidence that
in July 2018, it was purchased by another security
company, Allied Universal, which was created in 2016 by
the merger of two security companies, Allied Barton
Security Services and UPS.
In 2013, UPS hired Stone as a security guard and
post commander in Los Angeles. He was terminated in
early 2014. In February 2014, Stone applied to USSA for a
position as a security guard. During the employment
hiring process, USSA conducted a background check on
Stone and obtained consumer reports on him.
3
A. Stone’s California Class Actions
1. California Labor Code Claims
Against UPS
In February 2015, Stone submitted a demand for
arbitration with the American Arbitration Association
against UPS (AAA case). Among his claims, Stone alleged
violations of California’s wage and hour laws, individually
and on behalf of other putative class members. Stone
sought unpaid wages, compensatory damages, restitution
and disgorgement, and legal fees. In December 2018, Stone
entered into a settlement agreement to resolve the AAA
case claims.
2. Fair Credit Reporting Class Action
Against USSA
On December 15, 2015, Stone filed a class action
complaint against USSA (now before us) alleging that
USSA violated the FCRA because the company failed to use
a separate disclosure form when procuring the consumer
report on him and other putative class members during
their employment hiring process (disclosure claim). Stone
sought statutory damages, punitive damages, and attorney
fees (Stone’s FCRA case). USSA filed an answer to the
complaint.
B. Proceedings in Federal Court
In January 2016, USSA filed a notice of removal of
Stone’s FCRA case to the United States District Court for
the Central District of California. At the parties’ request,
the district court subsequently transferred the FCRA claim
4
to the United States District Court for the Northern
District of Georgia.
1. The Consolidation of Stone’s FCRA
Class Action with Michael DeCaro’s
FCRA Class Action
Stone’s federal FCRA putative class action was
consolidated with another putative class action against
USSA filed by Michael DeCaro. DeCaro was a former
USSA employee who, on June 3, 2015, filed a putative class
action suit against USSA in the United States District
Court for the Middle District of Florida.1 Like Stone,
DeCaro had alleged that USSA violated the FCRA by
failing to make the required disclosure before procuring a
consumer report on him. DeCaro’s complaint also
contained a second putative class action claim, alleging
that USSA fired him in April 2015 based on the
information in the consumer report (adverse action claim).
The Georgia district court ordered Stone and DeCaro
to file a consolidated complaint. In July 2016, they filed a
consolidated complaint that included the disclosure claim
and the adverse action claim on behalf of themselves and a
nationwide class of plaintiffs as to whom USSA, within five
years of the complaint, had procured a consumer report for
employment purposes or had taken adverse employment
action against based on the information contained in the
report (the federal case).
1 In early 2016, DeCaro’s case was transferred to the
district court in Georgia.
5
2. USSA’s Motion to Dismiss
On May 3, 2017, USSA filed a motion to dismiss the
consolidated class action claims that arose “more than two
years before the filing of Plaintiffs’ original complaints.”
USSA argued that dismissal was appropriate because
extending the class to include claims beyond title 15 United
States Code section 1681p’s (hereafter section 1681p) two-
year statute of limitations “would require discovery as to
individual issues with respect to the applicability of the
discovery rule to each putative class member,” thus making
a class action “unsustainable.” USSA’s proposed order
granting the motion contained the following proposed
language on the dates that commenced the two-year statute
of limitation: “the Court hereby dismisses with prejudice
any claims that extend beyond two-years from the date the
original complaints were filed (beyond June 3, 2015 [the
date DeCaro filed his original complaint] for Adverse Action
Class claims and December 15, 2015 [the date Stone filed
his original complaint] for Improper Disclosure and
Authorization Class claims).”
In their response, Stone and DeCaro “agree[d] not to
challenge the two-year versus five-year look back period
argument Defendant raised in its Motion.” Stone and
DeCaro stated they “take no issue with limiting both
classes in this case [the consolidated action] to two years
within the filing of the first-filed complaint (meaning not
the consolidated complaint, but the first filed of the two
6
state court complaints that had been [filed] prior to
removal and consolidation) through the present.”2
A federal magistrate judge prepared a
recommendation that recited the parties’ respective
positions and recommended that the district court judge
grant the motion. The district court judge adopted the
magistrate judge’s recommendation and dismissed
“[p]laintiffs’ class claims that seek to extend the FCRA
statute of limitations to five years.” The district court did
not rule on whether the date DeCaro filed his original
complaint, June 3, 2015, or the date Stone filed his original
complaint, December 15, 2015, commenced the running of
section 1681p’s two-year statute of limitation on the
disclosure claims.
3. USSA Motion for Summary
Judgment
Stone and DeCaro moved for class certification.
USSA filed a motion for summary judgment, arguing that
the federal courts did not have subject-matter jurisdiction
over the disclosure claim. USSA argued Stone and DeCaro
lacked standing because they could not show a concrete
injury sufficient to warrant the exercise of federal subject
matter jurisdiction.
The magistrate judge recommended granting the
motion on DeCaro’s disclosure claim and denying the
2 Stone’sand DeCaro’s position on the date of
commencement of the two-year statute of limitations was also
included in the joint preliminary report and discovery plan.
7
certification of DeCaro’s adverse action class.3 The
magistrate judge also recommended that Stone’s FCRA
disclosure claim be remanded to the Los Angeles Superior
Court. On September 25, 2019, the district court judge
adopted the magistrate’s recommendation, denied Stone’s
motion to certify the class and remanded Stone’s disclosure
claim to the Los Angeles Superior Court.4
C. Resumption of the Original Action (Case
No. BC604257) in the Superior Court of
Los Angeles County.
After that Stone revived the original complaint,
which had been filed in December 2015 with Stone as the
sole class representative, in the Superior Court. In
January 2020, the superior court granted USSA leave to
supplement its answer to allege the affirmative defense of
release. USSA averred release because in December 2018,
while Stone’s FCRA case against USSA was pending in
district court, he settled his wage and hour claims against
UPS. And as a condition for receiving a “Class
3 After the magistrate judge issued the recommendation,
DeCaro moved to amend his claims, but then DeCaro settled with
USSA. The district court judge’s order states, the “Court does not
address the Magistrate Judge’s recommendations about claims
that solely relate to or depend on DeCaro and denies the motion
to amend as moot.”
4In describing Stone’s disclosure claim, the district court’s
order acknowledged Stone’s original class action suit against
USSA was filed in the superior court in December 2015.
8
Representative Enhancement Payment,” in the case
against UPS, Stone executed a separate settlement
agreement and release in which he agreed to release UPS
and “each of its past, present and future . . . related
companies/corporations” and “affiliated organizations” from
“any and all claims, known and unknown, under federal,
state and/or local law.” USSA alleged the release in the
UPS matter released all claims against USSA, including
the claims asserted in Stone’s FCRA case, because UPS and
USSA were related companies and corporate affiliates.
Stone then filed a motion for leave to file a first
amended complaint to add two new named class
representatives “so that this action can proceed” without
Stone. Stone sought to add Aguayo5 and Derryck Dawson6
as named putative class representatives. The motion for
leave attached a proposed first amended complaint,
including a version of that complaint showing the
modifications made from Stone’s original complaint filed in
December 2015. According to Stone’s counsel’s declaration
supporting the motion to amend, Aguayo was employed
around the same time as Stone and, like Stone, could assert
5In the fall of 2013, Aguayo applied for a security position
at USSA and was hired by the company. The proposed first
amended complaint alleged that during the hiring process, USSA
obtained a consumer report on him.
6 Dawson is not a party to this appeal.
9
a disclosure claim against USSA.7 USSA opposed the
motion to amend the original complaint arguing Aguayo
could not serve as a class representative or assert an
individual disclosure action against USSA because his
claims were time-barred. USSA pointed out that the
statute of limitations on Aguayo’s disclosure claim
commenced in November 2013 and, thus, expired more
than two years before Stone filed his original complaint in
December 2015.
In its order granting Stone leave to amend, the trial
court specifically declined to rule on the statute of
limitation issue. On August 19, 2020, Stone filed the first
amended complaint, adding Aguayo and Dawson as class
representatives. Like the original complaint in Stone’s
FCRA case, the amended complaint alleged only a single
claim for violation of the FCRA and alleged that USSA
obtained the consumer report on Stone in December 2015.8
1. Summary Adjudication as to Stone.
USSA filed a motion for summary adjudication on the
ground that Stone released his claim against USSA in
December 2018 when he settled his claims in the AAA case
7 Although the record before this court does not disclose the
date Aguayo discovered the alleged FCRA violation, it is
uncontroverted that the FCRA violation occurred on November 5,
2013, the date USSA procured his consumer report.
8 The amended complaint did not include any factual
allegations relating to the newly added named class
representatives or incorporate DeCaro’s claims.
10
against UPS and its related corporations and affiliates,
which included USSA. Stone opposed the motion, objecting
to USSA’s evidence and asserting USSA had failed to
present admissible evidence that USSA and UPS were
under “common control” by Allied Universal. The trial
court granted USSA’s motion for summary adjudication to
Stone, overruling Stone’s evidentiary objections.
2. Summary Adjudication as to Aguayo.
USSA also filed a motion for summary adjudication
and summary judgment as to Aguayo. USSA argued that
summary adjudication was proper on Aguayo’s individual
claim because Aguayo was not a putative class member and
could not serve as a class representative based on the two-
year statute of limitations and the five-year statute of
repose governing the FCRA claims in section 1681p. USSA
also asserted Aguayo was judicially and collaterally
estopped from expanding the temporal scope of the putative
class to include individuals like him, whose FCRA
violations occurred more than two years before
December 15, 2015—the date Stone filed his FCRA claim in
the state court.
Aguayo opposed the motion, arguing his claim was
timely because in the federal case, the district court had
established that time periods in section 1681p would be
measured from June 3, 2015—DeCaro’s filing date, not
Stone’s filing the date. Aguayo also argued that the
doctrines of equitable tolling and relation back applied to
FCRA’s statute of repose, and thus the five-year statute of
repose did not bar his claim.
11
The trial court granted USSA’s motion for summary
adjudication. The court ruled Aguayo was judicially and
collaterally estopped from asserting that June 3, 2015,
rather than December 15, 2015, was the controlling date to
determine the timeliness of the disclosure claim. The trial
court found that the district court’s order did not clarify
which date determined the class period. However, the
litigation conduct after remand reflected an
acknowledgment that Stone’s filing date governed the
determination of the class, and Aguayo was estopped from
claiming otherwise. The trial court also concluded that the
FCRA’s five-year statute of repose was not subject to
equitable tolling or the relation-back doctrine. Thus,
Aguayo’s claim was barred by the statute of repose. In
rejecting the application of the relation back doctrine, the
trial found that Stone’s disclosure claim, not DeCaro’s
disclosure claim, was remanded to the trial court and thus
the timeliness of Aguayo’s claims would be evaluated using
Stone’s December 15, 2015, filing date. And based on that
date, Aguayo’s alleged FCRA violation, which occurred on
November 5, 2013, was time-barred. Finally, the trial court
found that because Aguayo was not a class member, he
could not serve as the class representative.9
9 The trial court granted summary adjudication as to
Aguayo but denied the USSA’s motion for summary judgment.
The court ruled that, although it was too late for any additional
class representative to be added, the class action could proceed
pending the outcome of an arbitration (previously compelled by
the trial court) involving USSA and Dawson. However, after
12
On February 16, 2022, the trial court entered
judgment for USSA. Stone and Aguayo timely appealed the
judgment.
DISCUSSION
A. Standard of Review
A court may grant a motion for summary judgment or
summary adjudication “only when ‘all the papers submitted
show that there is no triable issue as to any material fact
and that the moving party is entitled to a judgment as a
matter of law.’ ” (Husman v. Toyota Motor Credit Corp.
(2017) 12 Cal.App.5th 1168, 1179; Soria v. Univision Radio
Los Angeles, Inc. (2016) 5 Cal.App.5th 570, 582; see Code
Civ. Proc., § 437c, subd. (c).) A defendant moving for
summary judgment has the burden of showing the court
that the plaintiff has not established, and cannot
reasonably expect to establish, the elements of the cause of
action. (Ennabe v. Manosa (2014) 58 Cal.4th 697, 705;
accord, Mattei v. Corporate Management Solutions, Inc.
(2020) 52 Cal.App.5th 116, 122.)
Where, as here, a defendant moves for summary
adjudication on a cause of action for which the plaintiff has
the burden of proof at trial, the defendant “must present
evidence that either ‘conclusively negate[s] an element of
the plaintiff’s cause of action’ or ‘show[s] that the plaintiff
does not possess, and cannot reasonably obtain,’ evidence
Dawson’s claims were settled in December 2021, the trial court
dismissed the claims against USSA with prejudice.
13
necessary to establish at least one element of the cause of
action. [Citation.] Only after the defendant carries that
initial burden does the burden shift to the plaintiff ‘to show
that a triable issue of one or more material facts exists as
to the cause of action.’ ” (Luebke v. Automobile Club of
Southern California (2020) 59 Cal.App.5th 694, 702–703;
see Code Civ. Proc., § 437c, subd. (p)(2); Aguilar v. Atlantic
Richfield Co. (2001) 25 Cal.4th 826, 853–854.) “There is a
triable issue of material fact if, and only if, the evidence
would allow a reasonable trier of fact to find the underlying
fact in favor of the party opposing the motion in accordance
with the applicable standard of proof.” (Aguilar, at p. 850;
accord, Welborne v. Ryman-Carroll Foundation (2018)
22 Cal.App.5th 719, 724.)
“We review a grant of summary judgment de novo
and decide independently whether the facts not subject to
triable dispute warrant judgment for the moving party as a
matter of law.” (Mattei v. Corporate Management
Solutions, Inc., supra, 52 Cal.App.5th at p. 122; see Regents
of University of California v. Superior Court (2018) 4
Cal.5th 607, 618.) “We need not defer to the trial court and
are not bound by the reasons for [its] summary judgment
ruling; we review the ruling of the trial court, not its
rationale.” (Knapp v. Doherty (2004) 123 Cal.App.4th 76,
85.) “ ‘In performing our de novo review, we must view the
evidence in a light favorable to plaintiff as the losing party
[citation], liberally construing [the plaintiff’s] evidentiary
submission while strictly scrutinizing [defendant’s] own
showing, and resolving any evidentiary doubts or
ambiguities in plaintiff’s favor.’ ” (United Parcel Service
14
Wage & Hour Cases (2010) 190 Cal.App.4th 1001, 1009;
accord, Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th
at p. 843.)
B. The Trial Court Properly Granted
Summary Adjudication for USSA on
Stone’s Claim.
USSA based its motion for summary adjudication on
Stone’s FCRA disclosure claim on the ground that the
release Stone executed in December 2018 when he settled
his AAA case against UPS barred his claim in this action.
As a condition for receiving a “Class Representative
Enhancement Payment” in the AAA case, Stone executed a
separate settlement agreement and release, agreeing to
release “any and all claims, known and unknown, under
federal, state and/or local law” against UPS and “each of its
past, present and future . . . related
companies/corporations” and “affiliated companies” (defined
as a company/corporation and/or partnership that is,
directly or indirectly, under common control with UPS or
any of its parents). The release also included UPS and
“affiliated organizations (meaning companies that are less
than 50% owned by [UPS] or any of its parents),
including . . . [Allied Universal].” USSA argued the release
in the AAA case governed the claims in this action because
USSA was a corporate affiliate of UPS, and USSA and UPS
were under common control of the same corporate parent,
Allied Universal.
USSA supported its motion with Stone’s discovery
responses, the declaration of witnesses, exhibits, including
15
the settlement agreement and release, and various exhibits
showing the corporate relationships among USSA, UPS,
and Allied Universal. Specifically, USSA submitted the
declaration of Matthew Lambach, the associate counsel for
Allied Universal. Lambach declared that, as legal counsel
at Allied Universal, he had access to the legal and
corporate records of Allied Universal and USSA and its
related entities. Lambach testified under penalty of
perjury that he had personal knowledge of corporate
structure and mergers and acquisitions of Allied Universal,
USSA, and UPS. He stated that beginning in mid-2018
UPS and USSA were related companies and corporate
affiliates under the common control of Allied Universal.
Lambach specifically described the mergers of UPS with
other entities to form Allied Universal in 2016 and Allied
Universal’s July 2018 acquisition of USSA. Lambach
further testified that exhibits 1 and 2 were true and correct
copies of the certificates of merger filed with the Secretary
of State of the State of Delaware showing the mergers of
the corporate entities (Allied Universal and USSA), and
that these documents were maintained in the usual course
of Allied Universal’s business. Lambach also declared that
exhibits 3 through 5 were true and correct copies of tables
and an organizational chart showing the corporate
ownership and structure of USSA, UPS, and Allied
Universal, all maintained in the usual course of business.
In his opposition, Stone conceded he executed the
release in the AAA case, and the release was effective and
legally valid. Moreover, he did not argue that the
settlement agreement was unenforceable or did not cover
16
the claims asserted in this case. Instead, Stone asserted
USSA failed to submit admissible evidence to establish it
was under “common control” with UPS. He specifically
objected that Lambach lacked personal knowledge of the
facts contained in his declaration. Stone asserted that
Lambach’s statements about Allied Universal’s corporate
structure were inadmissible legal conclusions. He objected
that the exhibits contained hearsay to which no hearsay
exception applied. And specifically complained that
exhibits 3, 4, and 5 to the Lambach Declaration because
they “appear to have been created for purposes of this
litigation.”
The trial court found that as a matter of law, USSA
demonstrated through admissible evidence that it had a
complete defense to Stone’s FCRA claim based on the
release in the AAA case. The court determined Stone failed
to raise a triable issue of fact and overruled all of Stone’s
evidentiary objections to USSA’s evidence, concluding that
“the Corporations Code and Defendant’s corporate
ownership structure confirm that [USSA] and [UPS] are
owned entirely by Allied Universal and are under common
control and are affiliated entities.”
Before this court, Stone repeats the arguments he
asserted in the trial court and argues the court erred when
it overruled his evidentiary objections to Lambach’s
declaration and the exhibits. He also asserts USSA did not
establish it was under common control with UPS as a
matter of law.
17
1. The Trial Court Properly Overruled
Stone’s Evidentiary Objections.
As to the trial court’s rulings on the evidentiary
objections, a split of authority exists on whether the de
novo standard of review or the abuse of discretion review
standard applies. (See Pipitone v. Williams (2016)
244 Cal.App.4th 1437, 1451 [acknowledging split in
authority and concluding de novo standard of review
applied to evidentiary rulings “determined on the papers
and based on questions of law such as hearsay”].) The
California Supreme Court has not decided whether a trial
court’s evidentiary rulings on a motion for summary
judgment are reviewed de novo or for an abuse of
discretion. (See Reid v. Google, Inc. (2010) 50 Cal.4th 512,
535 [declining to decide issue].)10 However, we need not
decide which review standard governs because here, under
either standard, the trial court did not err.
10 We note that cases considering this question and
applying the abuse of discretion standard after Reid v. Google,
Inc., supra, 50 Cal.4th 512 have been published. by the First
Appellate District, Second Appellate District, Third Appellate
District, Fourth Appellate District (Division One), Fifth Appellate
District, and Sixth Appellate District. (See, e.g., LAOSD Asbestos
Cases (2023) 87 Cal.App.5th 939, 946; Schmidt v. Citibank, N.A.
(2018) 28 Cal.App.5th 1109, 1118; Butte Fire Cases (2018)
24 Cal.App.5th 1150, 1169; Duarte v. Pacific Specialty Ins. Co.
(2017) 13 Cal.App.5th 45, 52; O'Neal v. Stanislaus County
Employees' Retirement Assn. (2017) 8 Cal.App.5th 1184, 1198;
Ryder v. Lightstorm Entertainment, Inc. (2016) 246 Cal.App.4th
1064, 1072; Jones v. Wachovia Bank (2014) 230 Cal.App.4th 935,
951.)
18
Lambach’s declaration established his personal
knowledge of the corporate structure and relationships
among USSA, UPS, and Allied Universal. The evidence in
his declaration also served to authenticate the exhibits and
establish the business records exception to the hearsay
rule.
First, Lambach established his personal knowledge of
the matters set forth in his declaration through his
testimony about his role in the company as the associate
counsel for Allied Universal. (Evid. Code, § 702, subd. (b)
[“witness’ personal knowledge of a matter may be shown by
any otherwise admissible evidence, including his own
testimony”].) In his declaration, Lambach testified that he
had access to the legal and corporate records of Allied
Universal and USSA and its related entities, and that he
had personal knowledge of corporate structure and mergers
and acquisitions of Allied Universal, USSA, and UPS. The
court was entitled to accept these assertions of personal
knowledge. (See Butte Fire Cases, supra, 24 Cal.App.5th at
p. 1169 [holding statements that facts based on personal
knowledge of employer’s operations are sufficient to satisfy
personal knowledge requirement]; cf. Stuart v. UNUM Life
Insurance (9th Cir. 2000) 217 F.3d 1145, 1154–1155
[reversing determination that declarant lacked personal
knowledge where declarant served as company’s vice
president and former member of human resources].)
Neither in the trial court nor here has Stone offered legal or
evidentiary support for his assertion that Lambach lacked
personal knowledge of his own testimony. (See, e.g., All
Towing Services LLC v. City of Orange (2013)
19
220 Cal.App.4th 946, 954 [a party “cannot avoid summary
judgment by asserting facts based on mere speculation and
conjecture, but instead must produce admissible evidence
raising a triable issue of fact”].)
Second, Lambach averred the exhibits attached to his
declaration were true and correct copies of records
maintained by Allied Universal in the ordinary course of its
business. The trial court could reasonably conclude that
the documents attached to the challenged declarations were
sufficiently authenticated and admissible as business
records. (See People ex rel. Owen v. Media One Direct, LLC
(2013) 213 Cal.App.4th 1480, 1484 [finding authentication
adequate where declarant averred that she reviewed files
relating to matter and attached documents were true and
correct copies of pertinent correspondence]; Jazayeri v. Mao
(2009) 174 Cal.App.4th 301, 322 [“The witness need not
have been present at every transaction to establish the
business records exception; he or she need only be familiar
with the procedures followed”].) We reach the same
conclusion under a de novo standard of review.
Third, Lambach’s declaration established that the
exhibits attached to the declaration as either non-hearsay
or subject to a hearsay exception. As the trial court
properly observed, exhibits 1 and 2 were admissible
nonhearsay as official records and official writings. (See
Evid. Code, § 1280.) Here, the trial court took judicial
notice of the Delaware Secretary of State’s official stamp on
the documents, which it found sufficient independent
evidence that the records were prepared in such a manner
20
as to assure their trustworthiness. We agree, and the court
did not err in its treatment of this evidence.
Lambach’s declaration also adequately established
the foundation for exhibits 3 to 5 as business records within
the meaning of Evidence Code section 1271. Under the
business record exception to the hearsay rule, “[e]vidence of
a writing made as a record of an act, condition, or event is
not made inadmissible by the . . . rule when offered to prove
the act, condition, or event if: [¶] (a) The writing was
made in the regular course of a business; [¶] (b) The
writing was made at or near the time of the act, condition,
or event; [¶] (c) The custodian or other qualified witness
testifies to its identity and the mode of its preparation;
[and] [¶] (d) The sources of information and method and
time of preparation were such as to indicate its
trustworthiness.” (Evid. Code, § 1271, subds. (a)-(d).)
Lambach stated that exhibits 3, 4, and 5, which
depict USSA’s corporate family ownership structure, were
compiled from information maintained in the usual course
of business. (See Conservatorship of S.A. (2018)
25 Cal.App.5th 438, 448 [identification of records as
documents “submitted with declaration” is sufficient to
satisfy identification requirement of business record
exception]; see also Butte Fire Cases, supra, 24 Cal.App.5th
at pp. 1169–1170 [upholding conclusion that documents
were business records where declarants testified such were
true, correct, and maintained in ordinary course of
business].)
The records show USSA’s corporate structure as of
December 12, 2018, the date on which Stone settled his
21
claim against UPS; according to Lambach, that structure is
identical to the corporate structure when the records were
prepared (i.e., in March 2020 for exhibits 3 and 4 and in
November 2018 for exhibit 5). In addition, given his role in
Allied Universal and his familiarity with the various
corporate entities’ mergers, structure, and relationships,
Lambach was qualified to testify about the documents.
(See Conservatorship of S.A., supra, 25 Cal.App.5th at
pp. 447–448 [declaration of administrative assistant
concerning medical records was sufficient because business
record exception requires only that witness be familiar with
preparation procedures].) Stone presented no evidence
indicating otherwise. Contrary to Stone’s contention, the
business record exception has no personal knowledge
requirement. (Unifund CCR, LLC v. Dear (2015)
243 Cal.App.4th Supp. 1, 8 (Unifund) [qualified witness
need not be custodian, person who created record, or one
with personal knowledge in order for business record to be
admissible under hearsay exception].)
Moreover, the criteria for establishing that a
document is subject to the business records exception to the
hearsay rule may be inferred from the circumstances.
(Unifund CCR, LLC v. Dear, supra, 243 Cal.App.4th Supp.
at p. 8 [criteria for establishing that document is subject to
business records exception to hearsay rule may be inferred
from circumstances].)
In reaching this conclusion, we reject Stone’s effort to
undermine the application of the business record exception
to exhibits 3, 4, and 5, based on his view that the exhibits
appear to have been created for purposes of this litigation.
22
Stone offers no evidence or cognizable argument in support
of his view. (See People ex rel. Owen v. Media One Direct,
LLC, supra, 213 Cal.App.4th at p. 1485 [speculative
assertion that document was prepared for litigation was
insufficient to place document outside business record
exception].)
USSA submitted substantial credible evidence that
Lambach was a qualified witness with the knowledge and
competence to establish the authenticity of such records for
the purposes of the business records hearsay exception.11
Furthermore, Lambach’s statements describing Allied
Universal’s corporate structure are factual assertions, not
legal conclusions. Stone did not establish any legal basis to
disregard or controvert USSA’s evidence.
2. USSA Demonstrated, as a Matter of
Law, USSA and UPS Were Affiliated
Companies and Under the Common
Control of Allied Universal.
Lastly, Stone argues that USSA failed to establish
that it was under common control with Allied Universal as
a matter of law. We disagree.
11 If Stone had concerns about the Lambach’s personal
knowledge and competence, or the trustworthiness of the
exhibits, he had an opportunity to challenge and test that
evidence before he responded to the motion for summary
adjudication. Stone had four months to prepare the opposition to
the motion during which he could have sought additional
discovery from USSA to test the veracity of Lambach’s
declaration and the exhibits attached to it.
23
Although the release does not define the term
common control, the Corporations Code provides guidance
on common control. In corporate ownership, “ ‘control’ ”
means the direct or indirect possession “of the power to
direct or cause the direction of the management and
policies of a corporation.” (Corp. Code, § 160, subd. (a).)
“[C]ontrol exists even where one entity merely has
potential rather than actual influence over another.”
(Everhealth Foundation, Inc. v. Department of Health
Services (1985) 168 Cal.App.3d 708, 715.) In addition, a
“corporation is an ‘affiliate’ of, or a corporation is ‘affiliated’
with, another specified corporation if it directly, or
indirectly through one or more intermediaries, controls, is
controlled by or is under common control with the other
specified corporation.” (Corp. Code, § 150.6.) As used in
the release, and considering the circumstances in which it
was executed, two business entities are under “common
control” when a third entity has the potential or actual
authority to direct both their management and policies.
Here Lambach’s declaration relates that USSA and
Universal are under the common control of Allied
Universal. In addition to the exhibits, his statements
provided the necessary evidentiary support for USSA’s
argument that it and USP are under Allied Universal’s
common control for the purpose of the release. Stone
submits no alternative meaning of “common control” nor
controverts the evidence presented in Lambach’s
declaration.
In any event, Lambach’s declaration established that
USSA and Universal are also corporate affiliates, within
24
the meaning of the release. The trial court also held that
Stone’s release applied to companies affiliated with UPS.
Before this court, Stone has not challenged the court’s
determination.
Accordingly, given the evidence showing the
corporate relationships among USSA, UPS, and Allied
Universal, the trial court properly granted summary
adjudication for USSA on Stone’s FCRA claim.
C. The Court Properly Granted USSA’s
Motion for Summary Adjudication on
Aguayo’s FCRA Claim.
In its motion for summary adjudication on Aguayo’s
FCRA claim, USSA argued that plaintiffs and their class
counsel should be judicially and collaterally estopped from
expanding the temporal scope of the putative class to
include Aguayo’s claim based on parties’ agreement in the
federal case and the district court order that the putative
class on the disclosure claim would include only those
individuals whose FCRA violations occurred after
December 15, 2013. USSA argued that because Aguayo’s
FCRA violation occurred on November 5, 2013, he was
excluded from the putative class. Alternatively, USSA
argued that Aguayo’s individual and class claims were
barred by the five-year statute of repose in section 1681p
because the statute of repose commenced running on his
FCRA claim on November 5, 2013, when USSA obtained
the consumer report on him, and thus extinguished his
FCRA claim in 2018, almost two years before Aguayo was
added as a party to this case. For the same reason, USSA
25
asserted Aguayo could not serve as the name class
representative in the action.
Aguayo opposed the motion arguing that neither
judicial nor collateral estoppel applied because he was not a
part of the federal case and that, in any event, the parties
in the federal case agreed, and the district court
determined that the disclosure claim would include those
individuals whose FCRA violations occurred after June 3,
2013, two years before the date on which DeCaro filed his
claim. Aguayo argued that the two-year statute of
limitation did not bar his claim because it accrued on
November 5, 2013, within two years of when DeCaro filed
his action. Aguayo also asserted the five-year statute of
repose did not extinguish his claims or preclude him from
serving as the named class representative because the
statute of repose was equitably tolled as of DeCaro’s filing
date or because his claim would relate back to the date that
DeCaro filed his action.
In granting the motion for summary adjudication, the
trial court agreed with USSA’s position that Aguayo was
barred from asserting the action based on the doctrines of
judicial estoppel and collateral estoppel. The court found
Aguayo conducted the litigation after remand based on
Stone’s filing date of December 15, 2015, and could not
relitigate the class cutoff date. In addition, the court also
found Aguayo’s claim (filed almost eight years after the
alleged FCRA violation) was barred by the five-year statute
of repose in section 1681p. The court further determined
the statute of repose precluded Stone from serving as the
class representative. The court ruled that neither equitable
26
tolling nor the relation back doctrine applied to statutes of
repose and, even if they did, the date to which they would
apply was Stone’s filing date of December 15, 2015, not
DeCaro’s filing date. The court found that because only
Stone’s disclosure claim (and not DeCaro’s claim) was
remanded to the state court, Stone’s filing date governed
the timeframes in section 1681p.
Before this court, Aguayo assails the court’s order,
reasserting the same arguments he made in his opposition
to the motion in the trial court. As we explain, the court
properly granted summary adjudication for USSA.
1. Section 1681p
Section 1681p sets forth the statute of limitation and
repose governing claims alleging FCRA violations. The
statute establishes that an enforcement action must be
brought not later than the earlier of (1) two years “ ‘after
the date of discovery [or constructive discovery] by the
plaintiff of the violation that is the basis for such liability’ ”
(Drew v. Equifax Info. Servs., LLC (9th Cir. 2012) 690 F.3d
1100, 1109) or (2) five years “ ‘after the date on which the
violation that is the basis for such liability occurs’ ” (Drew,
at p. 1109; see, e.g., Blake v. TransUnion LLC (E.D.Mich.
Jan. 16, 2019, No. 18-10406) 2019 U.S.Dist. Lexis 7371, at
*5 [observing § 1681p(1) is a statute of limitations and
§ 1681p(2) is a statute of repose]). Thus, under the
statute’s language, in no event may a plaintiff bring an
FCRA enforcement action more than five years after the
date the violation occurs. A violation occurs when a
defendant procures a consumer report for the plaintiff.
27
(See Del Toro v. Centene Corp. (N.D.Cal. Oct. 14, 2020,
No. 19-cv-05163-LHK) 2020 U.S.Dist. Lexis 191368, at *10;
Ruiz v. Shamrock Foods Co. (C.D.Cal. Aug. 22, 2018, 2:17-
cv-06017-SVW-AFM) 2018 U.S.Dist. Lexis 148929, at *17,
fn. 6.)
2. Application of Section 1681p to
Aguayo’s Claims
It is undisputed that USSA obtained the consumer
report on Aguayo on November 5, 2013, and that the
alleged FCRA violation occurred on that date. It is also
uncontroverted Aguayo was added as a named class
plaintiff to this case on August 19, 2020, well beyond the
expiration of both the two-year statute of limitations and
the five-year statute of repose in section 1681p.
The application of the two-year statute of limitations
to Aguayo’s individual action and class claim depends on
whether the operative date for the limitations period in
section 1681p is DeCaro’s filing date of June 3, 2015, or
Stone’s filing date of December 15, 2015. If the operative
date is June 3, 2015, the two-year statute of limitations
does not bar Aguayo’s individual and class claims because
the violation occurred on November 5, 2013, less than two
years before DeCaro filed his original complaint. (See
American Pipe & Construction Co. v. Utah (1974) 414 U.S.
538, 550 [timely class action commences action for all
members of class]; Becker v. McMillin Construction Co.
(1991) 226 Cal.App.3d 1493, 1501 [class action tolled
statute of limitation on claims of individual homeowners
who would have been members of purported class alleging
28
construction defects at residences in home development].)
However, if the operative date is Stone’s filing date of
December 15, 2015, then Aguayo’s claims are untimely
under section 1681p’s two-year statute of limitations.
a. Stone’s December 15, 2015,
Filing Date Is the Operative
Date for Section 1681p.
Aguayo argues DeCaro’s filing date controls the
timeliness of the claims based on the parties’ agreement in
the federal case and the district court’s order on the motion
to dismiss, which Aguayo asserts established the class
cutoff date. USSA disagrees, maintaining the parties and
district court adopted Stone’s filing date as the cutoff for
the class FCRA disclosure claims in the federal case.
On this point, the record in the federal case relating
to the motion to dismiss is unclear. As the trial court
observed, the record in the federal case discloses that the
parties asserted different positions on which filing date
should control the disclosure claim. The magistrate judge’s
recommendation, which the district court judge adopted,
explained that plaintiffs advocated for the DeCaro filing
date and defendant advocated for the Stone filing date, but
the magistrate did not recommend the adoption of one date
or the other. Further, nothing in the district court’s order
designated which of the two filing dates—June 3, 2015, or
December 15, 2015—would govern the disclosure claim.12
12 Even the parties’ joint preliminary report and discovery
plan filed in the federal case does not illuminate the issue—it
29
Likewise, nothing in the consolidated complaint discloses
whether DeCaro’s filing date or Stone’s filing date was
meant to govern the application of the two-year statute of
limitations on the consolidated disclosure claim.
However, the federal court’s subsequent order on the
motion for summary judgment, remanding Stone’s
disclosure claim to the state court, reflects the district court
remanded only Stone’s disclosure claim to the California
State court. When the district court ruled on USSA’s
motion for summary judgment, DeCaro was no longer a
party in the case, because DeCaro settled his claims
against USSA while the magistrate judge’s ruling on the
motion to dismiss was pending review by the district court
judge. Further, in the order remanding Stone’s disclosure
claim, the district court judge referenced Stone’s filing date
of December 2015, not DeCaro’s filing date. Thus, we agree
with the trial court’s interpretation of the federal court’s
order as remanding only Stone’s disclosure claim (with its
original filing date of December 15, 2015) to the California
state court.
Moreover, irrespective of which filing date governed
the application of statute of limitations on the consolidated
complaint’s disclosure claim in the federal court, when
Stone resumed his case in the superior court, he revived his
original state court complaint. After that, when Stone
sought to amend his original state court complaint to add
Aguayo as the class representative, he did not include any
merely described the position Stone and DeCaro took on the
operative date for the claims.
30
reference to DeCaro’s disclosure claim, its filing date, or
otherwise seek to conform the allegations of disclosure
claim in the state court complaint with the disclosure claim
in consolidated complaint. Furthermore, when USSA’s
opposed the motion to amend the complaint, arguing that
Stone could not add Aguayo as a named plaintiff because
the two-statute of limitations expired on Aguayo’s claim,
Stone did not assert the DeCaro’s filing date governed the
disclosure claim in the state court complaint. As the trial
court observed in the order granting summary
adjudication, before filing the opposition to the motion,
Stone and Aguayo conducted this litigation, including
requests seeking to discover the identity of additional class
members, as if Stone’s December 15, 2015, filing date
governed claims in the case. Given the record before us, we
conclude USSA demonstrated as a matter of law that
December 15, 2015 determines the application of the
section 1681p two-year statute of limitation.
b. Aguayo’s Individual and Class
Claims Are Untimely Under
Section 1681p.
Because Stone’s filing date establishes the two-year
statute of limitation timeframe under section 1681p for
FCRA violations in this case, we agree with the trial court
that Aguayo’s individual FCRA claim is time-barred.
In any event, even assuming Aguayo’s claim was not
time-barred because DeCaro’s filing date governed the
application of the two-year statute of limitation in section
1681p, we conclude the trial court properly granted the
31
motion for summary adjudication based on the five-year
statute of repose in section 1681p. The statute of repose
extinguished Aguayo’s claim in November 2018, almost two
years before Aguayo was added as a party to this case. In
reaching this conclusion, we reject Aguayo’s assertion that
equitable tolling and the relation back doctrines would
apply to halt the statute of repose. We join the majority of
courts which have determined that absent an express
statutory exception, equitable tolling does not apply to a
statute of repose. (See, e.g., Cal. Pub. Employees’ Ret. Sys.
v. ANZ Sec., Inc. (June 26, 2017, No. 16-373) __ U.S. __
[137 S.Ct. 2042, 2051] (CalPERS) [“Court repeatedly has
stated in broad terms that statutes of repose are not subject
to equitable tolling”]; CTS Corp. v. Waldburger (2014) 573
U.S. 1, 9 [“Statutes of limitations, but not statutes of
repose, are subject to equitable tolling”]; Balam-Chuc v.
Mukasey (9th Cir. 2008) 574 F.3d 1044, 1048 [“ ‘Statutes of
repose are not subject to equitable tolling’ ”]; PGA West
Residential Assn., Inc. v. Hulven Internat., Inc. (2017)
14 Cal.App.5th 156, 178 [“[U]nlike a procedural statute of
limitations, substantive statutes of repose are generally not
subject to statutory or equitable tolling”].)
Courts have also refused to apply equitable tolling to
the statute of repose in class action cases like this one,
where the class action was amended to add a new named
class representative after the statute of repose had
extinguished the proposed new class representative’s claim.
(See De Vito v. Liquid Holdings Grp., Inc. (D.N.J. Dec. 31,
2018, Civ. No. 15-6969(KM)(JBC)) 2018 U.S.Dist. Lexis
217963, at *40 [refusing to toll statute of repose to allow
32
plaintiffs to add new named class plaintiff beyond statute
of repose period] (De Vito); Leber v. Citigroup 401(k) Plan
Inv. Comm. (S.D.N.Y. 2017) 323 F.R.D. 145,153–154 [time-
barred from raising any individual claims at time of entry
into case and not yet member of certified class, should not
have been permitted to serve as lead plaintiff].)13
Similarly, courts have uniformly refused to apply the
relation back doctrine to statutes of repose. (See, e.g.,
Miguel v. Country Funding Corp. (9th Cir. 2002) 309 F.3d
13 We observe that none of the cases Aguayo relies upon to
support his equitable tolling argument assist him. He cites to
American Pipe & Construction v. Utah, supra, 414 U.S. 538, but
its pronouncements about equitable tolling in the context for
class action intervenors apply only to statutes of limitation, not to
statues of repose. (See CalPERS, supra, __ U.S. __ [137 S.Ct. at
pp. 2052–2053]; Police & Fire Retirement System v. IndyMac
MBS, Inc. (2nd Cir. 2013) 721 F.3d 95, 106.) Equally unavailing
is Aguayo’s reliance on In re Cobalt Int'l Energy, Inc. Secs. Litig.
(S.D.Tex. Aug. 23, 2017, No. CV H-14-3428) 2017 U.S.Dist. Lexis
134495 and In re SunEdison, Inc. Securities Litigation (S.D.N.Y.
2019) 329 F.R.D. 124, 145–146 both of which concerned the effect
of statutes of repose on class certification. The courts in Cobalt
and SunEdison determined that the statute of repose did not bar
class certification, where the class action was timely filed by a
named plaintiff, but the class was not certified until after the
statute of repose ran on the individual claims of the unnamed
class members. (Cobalt, at *11–12; SunEdison, at pp. 145–146.)
This case is different. The application of statutes of repose in the
context of class certification of is not at issue here. Instead, this
case concerns a party who was added as a named class plaintiff
after the statute of repose extinguished the plaintiff’s individual
claim. Thus, neither Cobalt nor SunEdison controls the
application of statute of repose here.
33
1161, 1164–1165 [relation-back doctrine did not extend
court’s jurisdiction beyond statute of repose], disapproved
on another ground in Hoang v. Bank of America, N.A. (9th
Cir. 2018) 910 F.3d 1096; In re Lehman Bros. Securities
(S.D.N.Y. 2011) 800 F.Supp.2d 477, 483 [relation-back
doctrine does not apply to statutes of repose argument];
Harris v. OSI Financial Services, Inc. (N.D.Ill. 2009)
595 F.Supp.2d 885, 898 [statutes of repose are not subject
to equitable extensions, including the relation-back
doctrine]; see also De Vito, supra, 2018 U.S.Dist. Lexis
217963, at *63 [“[R]elation-back is in tension with the
principle that a statute of repose is a rigid and essential
limitation on the scope of the cause of action itself”].)
Accordingly, neither equitable tolling nor the relation
back doctrine applied, and the five-year statute of repose in
section 1681p bars Aguayo’s individual FCRA claim.
c. Aguayo Cannot Serve as the
Named Class Representative.
Finally, because Aguayo’s individual claim is
untimely under section 1681p, he is also ineligible to serve
as the class representative in the case. Generally, a
“plaintiff may not maintain an action on behalf of a class
against a specific defendant if the plaintiff is unable to
assert an individual cause of action against that
defendant.” (Haas v. Pittsburgh National Bank (3rd Cir.
1975) 526 F.2d 1083, 1096, fn. 18.) “Unless at least one
named Plaintiff can state a claim for relief under each
count Plaintiffs do not have standing to bring claims as
34
part of a putative class action.” (In re Flonase Antitrust
Litigation (E.D.Pa. 2009) 610 F.Supp.2d 409, 413.)
In view of the foregoing, the trial court properly
granted summary adjudication for USSA on Aguayo’s
claims.
DISPOSITION
The judgment is affirmed. U.S. Security Associates,
Inc. is awarded its costs on appeal.
NOT TO BE PUBLISHED.
MOOR, J.
We concur:
BAKER, Acting P. J.
KIM, J.
35