Case Name: David Giang vs Billy-K Printing et al
Case No.: 18CV321359

This action is on a judgment issued following a Labor Commissioner Administration Hearing in which the Labor Commissioner found in favor of the Plaintiff in this case, David Giang (“Plaintiff”), against Defendant Billy-K Printing, Inc. (“Billy-K”). Neither party appealed from or challenged the Labor Commissioner decision, and the Labor Commissioner decision became a judgment in this case on January 3, 2018.

In the Labor Commission proceeding, Plaintiff filed actions against both Defendant Billy-K Printing and its owner, Khiem Nguyen (“Nguyen”). Plaintiff argued that Nguyen was liable for his wage and Labor Code penalty claims on an alter ego theory. After two days of hearings, the Labor Commissioner found that Billy-K was liable to Plaintiff for wages and penalties in the amount of $43,169.00. However, the Labor Commissioner found, based on evidence at the hearing, that Nguyen was not liable to Plaintiff on an alter ego basis. The Labor Commissioner specifically stated that the “finding is there was not such unity of interest and ownership that the separate personalities of the corporation and the individual no longer existed, and Defendant Nguyen is accordingly dismissed as a named defendant.”

Despite this specific finding, Plaintiff now moves to add Nguyen as an additional judgment debtor on an alter ego basis.

Amending a judgment to add alter ego judgment debtors “is an equitable procedure based on a theory that the Court is not amending the judgment to add a new defendant but is merely inserting the correct name of the real defendant. (NEC Electronics Inc. v. Hurt (1989) 208 Cal.App.3d 772, 778 (NEC), citing CCP Section 187.)

To prevail on a motion to add judgment debtors, the judgment creditor must establish three things:

1) the party to be added as judgment debtor had control of the underlying litigation and was virtually represented in the proceeding;

2) there is such a unity of interest and ownership that the separate personalities of the entity and owners no longer exist and

3) an inequitable result will follow.

It is true that Nguyen was involved in and directly participated in the Labor Commission hearings. However, so was Plaintiff. Even though it was Plaintiff who specifically asked the Labor Commissioner to rule on whether Nguyen was the alter ego of Billy-K and hold him responsible for the wage claims, Plaintiff now argues that the Labor Commissioner had no jurisdiction to make that decision because it is equitable in nature, and asks this Court to make a contrary finding.

Plaintiff has cited no authority that supports the argument that the Labor Commissioner has no jurisdiction to decide alter ego issues presented to it. Only one of Plaintiff’s cases relates to the jurisdiction of the Labor Commissioner (Noble v. Draper (2008) 160 Cal.App.4th 1), and all that Noble stands for is that the Labor Commissioner has no authority to determine fraud or other types of tort claims. The only other case cited that even mentions Labor Commission proceedings, Happy Nails & Spa of Fashion Valley, L.P. v. Su, is not a published opinion, and it was improper for Plaintiff to cite to this case. (Rules of Court, Rule 8.1115(a).)

As argued by Plaintiff, the Labor Commissioner has jurisdiction to decide claims for wages, penalties and other demands for compensation. As the claims brought by Plaintiff in the Labor Commission sought wages, penalties and other demands for compensation against Nguyen based on an alter ego theory, the Labor Commission had jurisdiction over the alter ego issue to decide if Nguyen was liable for Plaintiff’s wage and Labor Code claims. None of the authorities cited by Plaintiff explicitly address this issue.

As noted above, Plaintiff did not appeal any aspect of the Labor Commissioner findings and order, including the finding the Nguyen was not liable as the alter ego of Billy-K. As conceded by Plaintiff in his reply, an order of the Labor Commission, even one that Nguyen is not liable as the alter ego of Billy-K, is final and binding. (Labor Code § 98.2(d).)

The Court finds that Plaintiff is bound by the order of the Labor Commissioner that he specifically requested, and presented evidence on. The Court finds that it would be inequitable to find that Nguyen is the alter ego of Billy-K on the facts presented here, and the order to add Khiem Nguyen as an additional judgment debtor is DENIED.