Case Name: Catalina Esoc v. Joseph “Jasper” Baniqued
Case No.: 16CV302317

I. Background
This case brought by Catalina Esoc (“Plaintiff”) against Joseph “Jasper” Baniqued (“Defendant”) arises from Defendant’s purported noncompliance with Labor Code provisions while he employed Plaintiff as a nanny and home cleaner.

According to the allegations of the complaint, Plaintiff routinely worked more than eight hours per day for Defendant, but Defendant did not pay Plaintiff for all the hours she worked in violation of the labor code. (Id. at ¶¶ 11-14.) Defendant also failed to comply with various other Labor Code provisions. (Id. at ¶¶ 15-18.) For example, Defendant did not provide Plaintiff with timely and accurate wage and hour statements, did not provide meal and rest breaks, and classified Plaintiff as an independent contractor despite knowing she was an employee. (Id. at ¶¶ 15-18, 24, 27.)

The complaint alleges causes of action for: (1) unfair business practices; (2) failure to pay earned wages; (3) failure to pay minimum wage; (4) failure to pay overtime; (5) failure to pay wages in a timely manner; (6) liquidated damages for failure to pay minimum wages; (7) failure to pay meal and rest period compensation; (8) failure to provide accurate itemized wage statements and employee records; (9) injunctive relief for violations of Labor Code and Business and Professions Code; (10) declaratory relief for violations of Labor Code and Business and Professions Code.

Currently before the Court is Defendant’s demurrer to the complaint as a whole and each cause of action on the ground of failure to state sufficient facts to constitute a cause of action. (See Code Civ. Proc., § 430.10, subd. (e).)
II. Request for Judicial Notice
In support of his demurrer, Defendant requests Defendant requests judicial notice of the following: (1) an order from the Division of Labor Standards Enforcement, and (2) a judgment entered in Santa Clara Superior Court Case No. 16CV299757.

The request for judicial notice (“RJN”) is made pursuant to Evidence Code section 452, which permits judicial notice of various records (Evid. Code § 452.) With respect to the Division of Labor Standards Enforcement order, Evidence Code sections 452, subdivision (c) permits judicial notice of “[o]fficial acts of the legislative, executive, and judicial departments of the United States and of any state of the United States.” (Evid. Code, § 452, subd. (c).) This includes administrative agency records. (Associated Builders and Contractors, Inc. v. San Francisco Airports Com. (1999) 21 Cal.4th 352, 375; Church v. Jamison (2006) 143 Cal.App.4th 1568, 1579 [taking judicial notice of a Division of Labor Standards Enforcement manual and opinion letter].) Therefore, the order is a proper subject for judicial notice.

With respect to the judgment, Evidence Code section 452, subdivision (d) allows judicial notice of court records. (Evid. Code, § 452, subd. (d).) Thus, the judgment is a proper subject for judicial notice.

Accordingly, the request for judicial notice is GRANTED.
III. Merits of the Demurrer
Defendant asserts this entire action is barred by the doctrine of res judicata. Defendant’s res judicata argument is predicated on a prior Division of Labor Standards Enforcement action, wherein Plaintiff successfully advanced similar allegations against Darlyn Velasco and obtained a judgment against her.

“If all of the facts necessary to show that an action is barred by res judicata are within the complaint or subject to judicial notice, a trial court may properly sustain a general demurrer.” (Planning and Conservation League v. Castaic Lake Water Agency (2009) 180 Cal.App.4th 210, 225.) “The doctrine of res judicata precludes the relitigation of certain matters which have been resolved in a prior proceeding under certain circumstances. … The doctrine has two aspects. It applies to both a previously litigated cause of action, referred to as claim preclusion, and to an issue necessarily decided in a prior action, referred to as issue preclusion.” (Brinton v. Bankers Pension Services, Inc. (1999) 76 Cal.App.4th 550, 556, internal citations omitted.)

Defendant demurs based upon issue preclusion. Lucido v. Superior Court (1990) 51 Cal.3d 335, 341 (“Lucido”) sets forth a five part test for issue preclusion. “First, the issue sought to be precluded from relitigation must be identical to that decided in a former proceeding. Second, this issue must have been actually litigated in the former proceeding. Third, it must have been necessarily decided in the former proceeding. Fourth, the decision in the former proceeding must be final and on the merits. Finally, the party against whom preclusion is sought must be the same as, or in privity with, the party to the former proceeding.” (Ibid., internal citations omitted.) Issue preclusion may apply not only to judicial decisions, but also “to the final decisions of administrative agencies acting in a judicial or quasi-judicial capacity.” (Murray v. Alaska Airlines, Inc. (2010) 50 Cal.4th 860, 867; see also George v. California Unemployment Ins. Appeals Bd. (2009) 179 Cal.App.4th 1475, 1485-1487 [listing several cases where an adverse ruling in an administrative hearing or quasi-judicial adjudication resulted in issue preclusion].)

Before addressing each element of issue preclusion, the Court notes that Plaintiff appears to misunderstand that Defendant relies upon issue preclusion. Plaintiff’s arguments are predicated on standards applicable to claim preclusion, not issue preclusion. For instance, Plaintiff places great weight on the requirement for claim preclusion that both parties be the same as the prior suit or in privity with a prior party. (See DKN Holdings LLC v. Faerber, supra, 61 Cal.4th at 824–825.) Plaintiff’s arguments are inapt insomuch as they do not address issue preclusion.

Turning to the elements of issue preclusion, there can be no dispute that the fourth and fifth elements are met. As to the fourth, a Division of Labor Standards Enforcement actions are considered decisions on the merits, and issue preclusion can be based upon one. (See Noble v. Draper (2008) 160 Cal.App.4th 1, 11–12; Lab. Code § 92.8, subds. (d)-(e).) The fifth element requires the party against whom issue preclusion is asserted be the same or in privity with a party from the prior proceeding. (Lucido, supra, 51 Cal.3d at 341.) Plaintiff, the party against whom issue preclusion is asserted, was a party in the prior administrative proceeding. As for the first, second, and third element, those are not obviously present.
With regard to the first element of identical issue, Defendant contends all the issues in the instant case are identical to, and were decided in, the prior Division of Labor Standards Enforcement action. Defendant does not connect the RJN or the prior action to the present case by discussing any specific identical issue. Rather, Defendant makes blanket assertions regarding the similarities between the two disputes. For instance, Defendant states “Plaintiff’s issues against Defendant Baniqued are identical to the issues which the Court has already adjudicated in the previous DLSE Action.” (Dem., p, 8:1-2.) Absent a statement that focuses Defendant’s issue preclusion claim to one or more particular identical issue(s), the Court is unable to conduct a thorough analysis. The failure of the Defendant to identify a specific issue also prevents the Court from assessing the second or third elements, i.e. whether the issue was actually litigated, and necessarily decided.

In place of discussing how any particular issue in the instant action is identical to an issue decided in the prior action, Defendant argues the facts underlying the prior action are the same as those underlying this one. The order attached to the RJN indicates that action involved very similar allegations to those before this Court, and was based upon the same facts, except that the defendant was Darlyn Velasco. In the prior action Plaintiff alleged nonpayment of ordinary and overtime wages, failure to provide meal and rest periods, and failure to provide employment records. (RJN, Exhibit A, p. 1-2, ¶¶ 1-9.) Plaintiff prevailed on most of the issues, and Darlyn Velasco was ordered to pay her $132,118.03. (Id., at pp. 10:19-26, 11:3.)

Mere shared facts are not enough to support a demurrer based upon issue preclusion. (See DKN Holdings LLC v. Faerber (2015) 61 Cal.4th 813, 826-7.) Plaintiff cites to DKN Holdings LLC v. Faerber, which provides an instructive set of facts for assessing whether identical facts are sufficient to support a demurrer on the basis of res judicata. (See Id., 826-7.) In that case, DKN Holdings entered into a lease with three people; Roy Caputo, Wade Faerber, and Matthew Neel. Litigation ensued involving breach of the lease, and DKN Holdings was awarded a judgment against Caputo. (Id. at 813.) Before the final decision, DKN Holdings sued the remaining two persons, Wade Faerber, and Matthew Neel. (Id. at 814.) The two subsequent defendants had not been parties to the lawsuit against Caputo, and asserted on demurrer that the suit violated the rule against splitting a cause of action. (Ibid.) The trial court sustained the demurrer without leave to amend. (Ibid.) The Court of Appeal affirmed the ruling based on res judicata. (Id. at 823.) The Court of Appeal reasoned “once ‘a final judgment on the merits has been rendered in one action against a joint and several obligor, res judicata will bar the assertion of identical claims against other joint and several obligors, in a subsequent action, by parties bound by the judgment in the prior action.’” (Ibid.) The California Supreme Court summarized the Court of Appeals ruling as “a final judgment against one obligor precludes the injured party from pursuing redress from any other obligor, even though the obligation is nominally joint and several.” (Id. at 823.)

The California Supreme Court disagreed with the Court of Appeal, and rejected the argument that either claim or issue preclusion prevented a subsequent suit against a co-obligor. (DKN Holdings LLC v. Faerber, supra 61 Cal.4th at 819, 827.) The court highlighted how an issue preclusion analysis must deal with specific issues, and does not generally prevent a plaintiff from seeking redress against a co-obligor. (Ibid.) “Issue preclusion … can indeed bind DKN to the resolution of issues decided in the Caputo action. For example, Faerber may raise issue preclusion as a shield to prevent relitigation of the rent due, or other losses caused by breach of the lease. DKN has apparently had a full and fair opportunity to litigate the extent of those damages … But issue preclusion cannot be used to prohibit DKN from seeking redress from a different obligor just because it has prevailed against a different party in the first suit.” (Id. at 827, internal citations omitted.)

DKN Holdings LLC v. Faerber is very similar to the instant case. In DKN Holdings LLC v. Faerber, the facts underlying the first and second lawsuit were identical. (See DKN Holdings LLC v. Faerber, supra 61 Cal.4th at 819.) The same plaintiff was seeking redress for the same facts, but from a different defendant. (Ibid.) The California Supreme Court ruled that while issue preclusion might apply to some specific issues decided in the previous case, it did not prevent the entire suit. (See Id. at 819, 827.)

Applying the law discussed above to the instant case, Plaintiff may be precluded from litigating identical specific issues a second time. For example, Plaintiff would be precluded from raising issues litigated and lost in the previous Division of Labor Standards Enforcement action. (See DKN Holdings LLC v. Faerber, supra, 61 Cal.4th at 819.) However, Defendant does not present any arguments regarding such specific identical issues.

Since Defendant has not shown any particular issue in the two cases is identical, he also fails to establish that the second and third elements of issue preclusion, i.e. that the particular issue was actually litigated, and that it was necessarily decided. (See Lucido, supra, 51 Cal.3d at 341.)

Defendant presents the previous successful action, the shared facts, and issue preclusion generally, as if these three points will support a demurrer to the instant action. DKN Holdings LLC v. Faerber rejected this line of reasoning. Defendant does not identify or discuss specific identical issues that were decided by the prior litigation. Thus, he does not establish that the complaint is necessarily defective due to issue preclusion. Accordingly, the demurrer to each cause of action and the complaint as a whole is OVERRULED.

The Court shall prepare the Order.