Case Name: Caraway v. Giles
Case No.: 17CV320199

Defendant Patrick R. Giles (“Defendant” or “Giles”) demurs to the first amended complaint (“FAC”) filed by plaintiff Douglas R. Caraway (“Plaintiff” or “Caraway”).

I. Factual and Procedural Background

This is an action to recover money purportedly owed by Defendant Giles to Plaintiff Caraway. According to the allegations of the FAC, Caraway, an experienced production engineer, was hired to supply sound, video and other associated services for a convention held by the Knanaya Catholic Congress of North America (“KCCNA”) in July 2006. (FAC, ¶ 5.) Under an undisclosed collective bargaining agreement, the venue hosting the convention, the San Jose Convention Center, required KCCNA to utilize union labor. (Id.) Caraway therefore arranged with Giles to supply union labor with the express understanding from Giles that only KCCNA or its representatives would be liable for labor costs. (Id., ¶ 6.) By the end of the convention, the total cost of sound, video and labor totaled approximately $43,000. (Id.)

At the close of the convention, KCCNA denied any liability to Plaintiff and Defendant and instead fully paid its representative, Biju Varghese (“Varghese”) (who hired Plaintiff) who then absconded with the money to Texas. (FAC, ¶ 7.) To this day, Plaintiff has never been paid for his services for KCCNA at Varghese’s behest. (Id.)

Plaintiff filed a lawsuit against Varghese and others in this Court to recover the money he was owed. (FAC, ¶ 8.) After a bench trial, on February 3, 2009, the Court (Hon. Zepeda) announced its tentative decision, ordering Varghese to pay Plaintiff $30,743. (Id., ¶ 9.) This was significantly less than the amount initially claimed, with the Court finding much of Defendant’s testimony to lack credibility. (Id.) In particular, the Court ruled that the unpaid invoices from Plaintiff were reasonable but the amounts charged by Defendant and the union were not. (Id.) The tentative order was never challenged and Defendant never made any effort to intervene. (Id.)

On June 27, 2008, Defendant Giles filed a claim against Plaintiff with the California Department of Industrial Relations Division of Labor Standards Enforcement (“DLSE”) alleging that Plaintiff Caraway personally owed him for the labor he provided at the KCCNA convention. (FAC, ¶ 10.) Giles assured Caraway not to worry about the DLSE claim, reiterating their understanding that he would get paid only when Caraway got paid. (Id.) Based on these assurances, Caraway did not obtain counsel, believing that Giles would not seek money from him until he personally received payment. (Id.)

On April 23, 2010, more than a year after this Court issued its decision in Caraway’s action against Varghese and others, the DLSE hearing officer issued his decision in Giles’ claim, ordering Caraway to pay Giles $18,725.74. (FAC, ¶ 11.) This amount included wages for labor expended by Giles that this Court ruled in the action filed by Caraway were not credible. (FAC, ¶ 11.)

After receiving the DLSE decision, Giles engaged defendant Doe 1 to collect. (FAC, ¶ 12.) Over the ensuing years, Doe 1 has repeatedly contacted and harassed Caraway. (Id.) Doe 1 also recorded a lien on Caraway’s home. (Id.) When Caraway sold his home in April 2017, at the close of escrow Giles and/or Doe 1 submitted a claim for and received $30,405.39. (Id.) Caraway alleges that this money rightfully belongs to him and seeks to recover it.

Based on the foregoing allegations, Plaintiff Caraway filed the FAC on March 8, 2018 asserting the following causes of action: (1) For Money (against all defendants); and (2) Unjust Enrichment (against all defendants). On April 9, 2018, Giles filed the instant demurrer to the FAC on the grounds of failure to state facts sufficient to constitute a cause of action and uncertainty. (Code Civ. Proc., § 430.10, subds. (e) and (f).) Caraway opposes the motion.

II. Analysis

A. Procedural Deficiencies

As an initial procedural matter, Giles maintains in his reply that Caraway’s opposition suffers from several procedural deficiencies based upon which the Court may reject the document. First, Giles asserts that the copy of the opposition that he received was neither signed nor accompanied by a proof of service. Second, Giles contends that he was not timely served with the opposition papers.

With regard to the first argument, there is no statute or rule of court which provides that a copy of the proof of service must be served with the opposing papers. While it is recommended that a proof of service accompany the opposition, the only mandate regarding the proof of service is that it be filed at least five court days before hearing on the matter. (See Cal. Rules of Court, rule 3.1300(c).) There is also no statute or rule of court of which the Court is aware that requires that the opposition papers served on a party be signed.

As for the second argument, papers opposing a motion must be filed and served at least 9 court days before the time for hearing, unless the court permits a shorter time. (Code Civ. Proc., § 1005, subd. (b); Cal. Rules of Court, rule 3.1300, subd. (a).) All opposing papers must be served by personal delivery, fax, electronically, express mail, or other means consistent with Code of Civil Procedure sections 1010- 1013 (the service of notice statutes) and “reasonably calculated to ensure delivery … not later than the close of the next business day” after the papers are filed with the court. (Code Civ. Proc., § 1005, subd. (c).) Here, Giles explains that the opposition was not received in the office of his counsel until May 14, 2018, three days after the opposition was filed in this court on May 11, 2018, and thus not in compliance with Code of Civil Procedure section 1005, subdivision (c).
The court ultimately retains the discretion overlook procedural deficiencies such as the foregoing. (See, e.g., Ca. Rules of Court, rule 3.1300(d).) Here, in the interests of judicial economy and the policy of deciding matters on the merits, the Court exercises this discretion and will consider the substance of Plaintiff’s opposition papers.

B. Substantive Merits

In demurring to the FAC filed by Plaintiff, defendant Giles makes the following arguments: (1) Plaintiff’s entire action is barred by res judicata and/or collateral estoppel; (2) the time to appeal the judgment collected via the lien on the home sold by Caraway in April 2017 has passed; (3) the first cause of action “for money” is vague and fails to state a cause of action; (4) the second cause of action for unjust enrichment is vague and fails to state a cause of action recognized in California; and (5) Plaintiff’s FAC is a de facto untimely appeal of the Labor Commissioner’s order and entitles Giles to an award of attorney’s fees.

1. Res Judicata/Collateral Estoppel

Giles first contends that his demurrer should be sustained because with the instant action Plaintiff impermissibly seeks to re-adjudicate claims and issues already determined in a prior proceeding- particularly the administrative proceeding before the DLSE.

In its most succinct and narrow form, res judicata is described as a doctrine which “precludes parties or their privies from relitigating a cause of action [finally resolved in a prior proceeding].” (Vandenberg v. Superior Court (1999) 21 Cal.4th 815, 828 [internal citations and quotations omitted].) “But res judicata also includes a broader principle, commonly termed collateral estoppel, under which an issue necessarily decided in [prior] litigation [may be] conclusively determined as [against] the parties [thereto] or their privies … in a subsequent lawsuit on a different cause of action.” (Id. [internal citations and quotations omitted].) “Thus, res judicata does not merely bar relitigation of identical claims or causes of action. Instead, in its collateral estoppel aspect, the doctrine may also preclude a party to prior litigation from redisputing issues therein decided against him, even when those issues bear on different claims raised in a later case. Moreover, because the estoppel need not be mutual, it is not necessary that the earlier and later proceedings involve the identical parties or their privies. Only the party against whom the doctrine is invoked must be bound by the prior proceeding.” (Vandenberg v. Superior Court, 21 Cal.4th at 828 [internal citations and quotations omitted] [emphasis in original].)

Traditionally, the doctrine of collateral estoppel applies only if the following threshold requirements are met: (1) the issue sought to be precluded from relitigation must be identical to that decided in a former proceeding; (2) the issue must have been actually litigated in the former proceeding; (3) it must have been necessarily decided in the former proceeding; (4) the decision in the former proceeding must be final and on the merits; and (5) the party against whom the preclusion is sought must be the same as, or in privity with, the party to the former proceeding. (Lucido v. Superior Court (1990) 51 Cal.3d 335, 341.) The party asserting collateral estoppel bears the burden of establishing these requirements. (See, e.g., Vella v. Hudgins (1977) 20 Cal.3d 251, 257.)

Defendant insists that each of foregoing requirements is met in this case. First, Giles explains, Plaintiff’s action directly attacks the propriety of his entitlement to money for wages owed that was taken from escrow to satisfy the judgment Giles obtained after the DLSE proceeding. The issue of whether or not he, Giles, was owed wages from Caraway for work performed at the KCCNA convention in July 2006 was previously adjudicated in the DLSE administrative proceeding filed by him in June 2008. Second, the issue was actually litigated, he explains, with the Labor Commissioner holding an administrative hearing on his unpaid wages claims against Caraway pursuant to Labor Code section 98 (“Section 98”), subdivision (a), during which Caraway was provided with an opportunity to present evidence concerning the amounts owed, if any, to Giles. Third, he continues, the issue was necessarily decided, with the DLSE proceeding resulting in the issuance of an award by the Labor Commissioner in Giles favor and against Caraway in the amount of $18,725.74. (See Case No. 2011-1-CV-212190, Giles v. MBGS/Caraway Audio, et al.)

Fourth, Giles contends that the decision in the DLSE proceeding was final and on the merits, coming after the Section 98 hearing. As a general matter, within 10 days after the service of notice by the Labor Commissioner of an order, decision or award in an administrative proceeding, the parties may seek review by filing an appeal to the justice, municipal, or superior court, in accordance with the appropriate rules of jurisdiction, where the appeal may be heard de novo. (Lab. Code, § 98.2, subd. (a).) There is no indication that Caraway ever filed an appeal of the DLSE award issued on September 23, 2011 in this Court or any other. After the award was issued, a request that the clerk enter judgment in conformity with the DLSE award was filed in this Court, and judgment was ultimately entered on October 31, 2011. The latest a party may file an appeal from a judgment is 180 days after judgment is entered. (Cal. Rules of Court, rule 8.104(a)(1)(C).) Thus, as Giles maintains, the latest Plaintiff could have filed an appeal of the judgment was April 30, 2012. No such appeal was ever filed. Further, Plaintiff can no longer avoid the judgment under Code of Civil Procedure section 473 by claiming mistake, surprise or neglect as the time to do so expired on May 1, 2012. (See Code Civ. Proc., § 473, subd. (b) [stating that an application for relief from judgment based on mistake, inadvertence, surprise or excusable neglect must be made within six months after judgment was taken].) Finally, Giles asserts, the final requirement is met because the party against whom the preclusion is being sought, Caraway, was a party to the DLSE proceeding.

Based on the foregoing, it appears to the Court that all of the requirements for application of collateral estoppel to the issues in this action are met. It is indisputable that a DLSE proceeding to which Caraway and Giles were both parties occurred and concluded, and that res judicata and collateral estoppel have specific application to Labor Commissioner decisions on wage claims under Section 98 by virtue of Labor Code section 98.2, which gives the administrative order the force of a final, binding judgment in the event (as was the case here) the losing party does not seek judicial review of the administrative order. (Noble v. Draper (2008) 160 Cal.App.4th 1, 12.) Though the claims in the instant action by Caraway are not described as wage claims, the amounts at issue represent the amount of wages he was held to owe Giles for labor services rendered in the DLSE proceeding.

In his opposition, Caraway argues that under the “latter judgment rule,” the Court’s judgment in the action filed by him against Varghese and others in 2009 prevails over the DLSE award. Plaintiff is referring to the rule which provides that “[w]hen in two actions [in different jurisdictions] inconsistent final judgments are rendered, it is the later, not the earlier, judgment that is accorded preclusive effect in a third action under the rules of res judicata.” (Rest.2d Judgments (1982) § 15.) The rationale for this rule is that only in the second proceeding did the parties have the opportunity to litigate the binding effect of the first ruling. (In re Marriage of Hanley (1988) 199 Cal.App.3d 1109, 1118.) Once this determination is made, it is controlling in all future proceedings.

However, Giles was not a party to the action that Caraway is referring to, Case No. 2006-1-CV-075692, Caraway v. Knanaya Catholic Congress, initially filed in December 2006, which resulted in a judgment in his favor on May 2, 2011. Caraway argues that Giles’ wage claims were included within his in that action, but offers no evidence which demonstrates that this is the case, e.g. a copy of the judgment or statement of decision. Caraway also does not address the issue of his failure to appeal the DLSE order which was reduced to judgment in the Court on October 31, 2011. The time for making any arguments attacking the propriety of this later judgment has long since passed. Further, the judgment resulting from the DLSE hearing happened after judgment was entered in Case No. 2006-1-CV-075692. Thus, even if Giles was a party to Caraway v. Knanaya Catholic Congress, it is not clear how the rule cited by Caraway would be helpful to him.

Ultimately, the Court finds that Giles has established that all of the requirements for collateral estoppel have been met. The issue of how much money Caraway was obligated to pay Giles has already been adjudicated and thus the instant action by Caraway challenging the propriety of that determination is barred. Consequently, the Court need not address Defendant’s remaining arguments in support of his demurrer. Defendant’s demurrer to the FAC is SUSTAINED WITHOUT LEAVE TO AMEND.

2. Attorney’s Fees

Giles additionally argues that Plaintiff’s FAC is a “de facto untimely appeal” of the Labor Commissioner’s order after the Section 98 proceeding and therefore he is entitled to recover attorney’s fees pursuant to Labor Code section 98.2, which provides, in pertinent part that:

If the party seeking review by filing an appeal [of an order, decision or award by the Labor Commissioner] to the superior court is unsuccessful in the appeal, the court shall determine the costs and reasonable attorney’s fees incurred by the other parties to the appeal, and assess that amount as a cost upon the party filing the appeal.

(Lab. Code, § 98.2, subd. (c).)

The Court declines to award Defendant such fees as he offers no authority for the proposition that the Court may properly treat Caraway’s FAC as a “de facto untimely appeal” of the DLSE order.