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Baker v. Pac. Oaks Educ. Corp.

California Court of Appeals, Second District, Third Division
Jan 25, 2024
317 Cal. Rptr. 3d 613 (Cal. Ct. App. 2024)

Opinion

B320814

01-25-2024

Matteo BAKER, a Minor, etc., et al., Plaintiffs and Appellants, v. PACIFIC OAKS EDUCATION CORPORATION, Defendant and Appellant.

Shenoi Koes, Allan A. Shenoi, Pasadena, Daniel J. Koes, and Benjamin Caryan, for Plaintiffs and Appellants. Alston & Bird, Terance A. Gonsalves and Jesse Steinbach, Los Angeles, for Defendant and Appellant.


APPEAL from an order of the Superior Court of Los Angeles County, Maren E. Nelson, Judge. Affirmed. (Los Angeles County Super. Ct. No. GC050404)

Shenoi Koes, Allan A. Shenoi, Pasadena, Daniel J. Koes, and Benjamin Caryan, for Plaintiffs and Appellants.

Alston & Bird, Terance A. Gonsalves and Jesse Steinbach, Los Angeles, for Defendant and Appellant.

ADAMS, J.

Plaintiffs, as individuals and on behalf of a class of parents, sued Defendant Pacific Oaks Children’s School (Pacific Oaks or the school), alleging the school failed to comply with child care facility licensing requirements. Pacific Oaks’s license set a capacity limit of 77 children in the school’s preschool programs. Plaintiffs allege Pacific Oaks enrolled more children than the license allowed, violating section 101161, subdivision (a) of title 22 of the California Code of Regulations. Although plaintiffs asserted class claims under the False Advertising Law (Bus. & Prof. Code, § 17500 et seq.), multiple prongs of the Unfair Competition Law (UCL) (Bus. & Prof. Code, § 17200 et seq.), and for common law fraud, a bench trial proceeded only on the class UCL claim based on alleged unlawful conduct.

The named plaintiffs are Matteo Baker, a minor child, by and through his guardian ad litem Mark Baker; Leo Valadez, a minor child, by and through his guardian ad litem Sharal Churchill; Mark Baker; Yesika Baker; the Estate of Sharal Churchill; and Karen Keen (collectively plaintiffs).

All further undesignated regulatory references are to title 22 of the California Code of Regulations.

The trial court rejected plaintiffs’ argument that enrollment numbers exceeding the capacity limit in the license established a violation of section 101161, subdivision (a). Instead, the court concluded plaintiffs could prove a violation only by showing more than 77 children were in attendance at the school at any one time during the class period. Plaintiffs challenge this ruling on appeal, as well as several pre-trial rulings, orders regarding class certification, evidentiary rulings during trial, and the court’s other substantive rulings on questions of law.

In the published portion of this opinion, we conclude that under the circumstances of this case, attendance, not enrollment, was the correct measure of "capacity." In the remainder of the opinion, we affirm the trial court’s challenged orders regarding the class definition, discovery, standing, and the court’s evidentiary rulings. FACTUAL AND PROCEDURAL BACKGROUND

Pacific Oaks provides early childhood education to children and families at a campus in Pasadena. The school’s programs include "part-time classes in the morning or afternoon as well as full day childcare programs for families working outside their home." Part-time programs take place during morning or afternoon intervals in different yards on school grounds.

DSS License and Plaintiffs' Original Complaint

In March 1996, the Department of Social Services (DSS) issued a license to "Pacific Oaks College & Children’s Programs to operate and maintain a Day Care Center" (the DSS license). The license provided: "Licensee prefers to serve children 2-5, M-F 8:00 – 6:00 p.m. Limitations in capacity per fire clearance are as follows: Boat Class– 16, Bamboo Class– 15, La Loma– 26, Peppers– 23." The license set a "total capacity" of 77. DSS also issued a license permitting "Pacific Oaks College & Children’s Programs to operate and maintain a school-age [day care] center," with a total capacity of 24. At some point, Pacific Oaks requested that DSS cancel the license for the school-age day care program, stating that the program had "not been in use for 10 years plus." It is not clear from the record if DSS canceled the license.

Health and Safety Code section 1596.81, subdivision (a) authorizes the DSS to issue rules or regulations necessary to carry out the California Child Day Care Facilities Act. (Health & Saf. Code, § 1596.70 et seq.) The DSS, through its Community Care Licensing Division (CCLD), is also responsible for issuing licenses to day care and other child care facilities, monitoring compliance, and administering corrective action for violations of licensing laws and regulations. (See Health & Saf. Code, § 1596.816.)

In October 2012, Matteo Baker sued Pacific Oaks; the then Executive Director, Jane Rosenberg; and an individual teacher. The complaint alleged that due to the defendants’ negligence and failure to properly supervise Matteo, he wandered alone into a playground and suffered a "neardeath" incident that left him with severe and ongoing psychological injuries. The complaint asserted causes of action for negligence and statutory and regulatory violations.

In July 2013, Pacific Oaks applied to increase the preschool programs’ capacity under the DSS license to 140. DSS denied the application, indicating Pacific Oaks failed "to provide satisfactory evidence that [it could] meet or conform to licensing requirements." DSS stated Pacific Oaks had "demonstrated the inability to comply with statutes and/or regulations, as evidenced on visits dated 08/2/11, 8/18/11, 5/23/13, and 6/7/13" and listed "some of the regulatory issues and statutes which were not complied with" as "conduct inimical," "reporting requirements," "neglect lack of care and supervision," and "personal rights." The denial letter concluded Pacific Oaks could "only operate with the capacity of 77 preschool age children that [was] noted on [its] current license."

DSS cited the following regulations in its letter: section 101229, subdivision (a)(1); section 101223, subdivision (a)(2); section 101212, subdivision (a)(1)(B); and section 101206, subdivision (a)(1)(e). The first two provisions concern supervision and "personal rights," and do not mention capacity. Neither the current Code of Regulations, nor the code in effect in 2013, appears to include a section 101212, subdivision (a)(1)(B) or section 101206, subdivision (a)(1)(e).

In August 2013, Pacific Oaks’s then Executive Director, Jayanti Tambe, wrote an e-mail informing parents that in May 2013, "the Children’s School administration was notified by the Department of Social Services Community Care Licensing Division (CCLD) that our license did not reflect the actual number of students on campus. An application to request an increase in the license to accommodate our total planned student population was submitted for review." The message further notified parents that because DSS had denied Pacific Oaks’s application, the school would "not be able to provide a space for [their] child(ren)" for the 2013–2014 school year. The record does not indicate which families received the e-mail.

In October 2013, Pacific Oaks again applied to increase the preschool programs’ license capacity to 140. DSS granted the application in April 2014.

The Class Action Claims

In August 2014, plaintiffs filed the operative second amended complaint, adding two causes of action that were asserted on behalf of a putative class. Plaintiffs alleged Pacific Oaks was, among other things, "not properly licensed for the number of children it had accepted or would accept, but … was operating at overcapacity and in violation of its existing license," and the school had knowingly concealed this information from plaintiffs and class members. Plaintiffs also claimed Pacific Oaks falsely advertised that it had " ‘state-of-the-art’ " play yards and facilities.

The first cause of action asserted a common law fraud claim, alleging that had class members known Pacific Oaks was operating in violation of the DSS license, with facilities that were not truly "state-of-the-art," they would not have selected Pacific Oaks or paid tuition. The second cause of action asserted claims of unfair competition and false advertising under Business and Professions Code sections 17200 and 17500. The complaint alleged that "[b]ut for the unfair competition and false advertising alleged … Plaintiffs and the members of the Class would not have paid tuition to Pacific Oaks because there were numerous comparable, alternative, tuition-free child care centers or public schools that were actually operating within capacity of their licenses, and providing students with a safe environment that were available" at the time plaintiffs’ and class members’ children attended Pacific Oaks. Plaintiffs requested class certification, damages, and restitution. In November 2014, the trial court stayed the individual negligence claims.

In June 2018, the trial court certified a "class consisting of parents and guardians of students who attended Pacific Oaks School and paid tuition during the period January 1, 2007 through August 31, 2013, to proceed as to the UCL and [false advertising law] claims premised on illegal or fraudulent conduct only." The court denied certification of plaintiffs’ common law fraud class claim, finding each class member’s actual reliance would require an individualized inquiry and individualized proof.

In December 2019, the trial court partially granted Pacific Oaks’s motion to decertify the class. The court decertified the false advertising law claim and the UCL claim based on a fraud by misrepresentation theory. The court allowed the class UCL claims based on fraud by omission and unlawful conduct to proceed. However, the court found the class definition was overbroad because it included parents and guardians of children who were enrolled in Pacific Oaks programs the DSS license did not cover, including Pacific Oaks’s Infant/Toddler/Parent program (infant/toddler program) and the School Age Child Care program (school age program). The court redefined the class, limiting it to " ‘[p]arents and guardians of former Pacific Oaks[ ] students who paid tuition from January 1, 2007 through August 2013 and whose students were enrolled in any "Pre-School Program" offered by Pacific Oaks during that time period.’ "

In February 2020, the parties filed motions for summary adjudication. Plaintiffs sought summary adjudication of the UCL class claims for unlawful and fraudulent conduct. They argued the record established Pacific Oaks violated the DSS license capacity limit because it was undisputed that the school enrolled more than 77 students each year during the class period.

The court denied plaintiffs’ motion in September 2020. The court found the regulations governing child care facilities did not support plaintiffs’ theory that Pacific Oaks’s aggregate annual enrollment of more than 77 children violated the DSS license capacity limit. The court rejected plaintiffs’ argument that the term "capacity," as used in the regulations, meant the number of children enrolled at the facility. The court further concluded plaintiffs’ proposed definition of capacity was inconsistent with the plain language of section 101179, subdivision (a), which defines capacity as "the maximum number of children that can be cared for at any given time." The court reasoned that whether capacity was exceeded "depend[ed] upon the time of measurement," which was "consistent with Pacific Oaks’ operations," including "different programs which different students attend at different times."

The trial court granted summary adjudication of plaintiffs’ individual and class UCL claims based on fraud by omission and the false advertising law claims. The sole remaining class claim was the UCL cause of action based on alleged unlawful conduct. The court bifurcated trial to allow the UCL class claim to proceed first to a February 2021 bench trial.

Plaintiffs filed a petition for writ of mandate in this court challenging the trial court's order denying summary’ adjudication in their favor. (Baker et al. v. Superior Court of Los Angeles County et al. (Oct. 15, 2020, B307819).) We denied the petition.

Plaintiffs had not indicated during discovery or the litigation of pre-trial motions that they would seek to offer evidence of Pacific Oaks’s daily attendance to prove their case. However, prior to the start of trial, and in light of the trial court’s ruling that enrollment numbers would not establish a violation of the DSS license, plaintiffs sought to obtain Pacific Oaks’s records of daily attendance or "daily enrollment" by serving a notice to attend trial and bring documents on Pacific Oaks’s custodian of records. Litigation ensued over the notice to attend and related motions to compel and quash. Eventually, on the first day of trial, the trial court ordered Pacific Oaks to produce "current rosters" and daily attendance records.

Trial of the Class Claim

The trial was conducted remotely. The court heard witness testimony over four days in February 2021. After the parties conditionally rested, the trial court set a schedule for further briefing on the admissibility of documentary evidence and submission of the parties’ closing briefs. In April 2021, the trial court ailed on the admissibility of the challenged documentary evidence. In August 2021, the court held a further hearing on evidentiary issues and the parties gave their closing arguments. In November 2021, the trial court issued a proposed statement of decision and, in April 2022, a final statement of decision.

At trial, plaintiffs offered the testimony of several witnesses, including two former Pacific Oaks executive directors. Jane Rosenberg was Pacific Oaks’s Executive Director from 1999 to 2013. Rosenberg was not involved in the application process for the DSS license. She testified that DSS did not suspend or revoke Pacific Oaks’s license for any reason during the class period. She also testified that it "was never the case" that every child in the school was in attendance every day. She explained, "You never have a hundred percent of your students in attendance on a given day. It just doesn’t happen." Rosenberg indicated Pacific Oaks did not have a separate license for the infant/toddler program "because there was an adult accompanying every child the entire time the child was in the program."

Rosenberg testified that "the only way you would know for certain on a given day at a given time how many children are there would be to refer to the sign-in sheets. Parents were required to sign their children in, when they dropped them off to school each morning, and sign them out at the end of the day when they picked them up. [¶] So if you looked at a sign-in sheet for a particular day, you would know exactly how many children were on campus at a given time." According to Rosenberg, no one at Pacific Oaks checked the sheets to see how many children were present at a time "because we handle that by making sure that the way we scheduled the programs, that they would only have a certain amount of children, that we could limit the children on the campus by the way we scheduled the various programs." Teachers gave the completed sign-in and sign-out sheets (sign-in sheets) to Rosenberg’s administrative assistant at the end of every month. Pacific Oaks "always had attendance records" available to calculate the number of students on campus.

DSS conducted unannounced site visits at Pacific Oaks to ensure the facilities were safe for children. Rosenberg testified DSS made one such visit in May 2013, in response to a complaint. During the visits, DSS conducted "a census count of how many children were present on the campus at that time" and wrote the results in a "facility evaluation report." Six DSS facility evaluation reports from visits occurring during the class period were admitted into evidence. Each report listed a census count below the licensed capacity of 77. Rosenberg denied that Pacific Oaks ever provided care to more children than the DSS license allowed during her tenure.

The testimony of Pat McComas, the Executive Director of Pacific Oaks from March 2014 to July 2016, was more contradictory. Plaintiffs offered McComas’s statements from an earlier deposition and declarations Pacific Oaks submitted in support of pre-trial motions. When asked at her deposition whether it was her understanding that when Pacific Oaks applied to increase its capacity from 77 to 140, it "was aware that it needed to make that change to have its existing operation comply with DSS requirements," McComas answered, "I would assume so, yes." However, when describing the license capacity limit at her deposition, McComas testified, "the 77 means at one time. So that was the facility’s limit. But there could be additional children there in the afternoon." When plaintiffs’ counsel asked McComas about aggregate enrollment numbers, McComas testified the numbers "would include our infant/toddler program, which is not included in our licensing." She also testified some students were "counted twice" in the aggregate number because "[t]here’s a morning program and there’s also an afternoon program called [School Age Child Care] … for an after-school care program." Yet, she appeared to concede that in August 2013, Pacific Oaks was operating "in excess of its capacity."

In a 2016 declaration, McComas attested, "While it is true the school was (unintentionally) operating in excess of its capacity, there is no evidence that student safety and well-being was impacted." However, in a 2020 declaration, McComas at- tested that the statement in her 2016 declaration about overcapacity was based on plaintiffs’ counsel’s instruction during her deposition that "overcapacity" meant more students enrolled than stated on the school’s license and made no distinction between students enrolled and students in attendance. McComas testified at trial that she was not sure if she "was referring to enrollment or attendance" in her 2016 declaration, but that between her deposition and her 2016 declaration nothing had changed her own understanding that "capacity" meant "at any one time."

At trial, McComas testified that during her deposition, "it was not at all clear that we ha[d] an agreed-upon definition of what we were using about capacity. [¶] I said what I thought. You [Plaintiffs’ counsel] said what you thought, but we did not have a stated, shared, agreed-upon definition. [¶] Sorry. So it was confusing to me, honestly." She indicated she did not review any attendance records before her deposition and had not been asked to do so. She also reaffirmed statements from her 2020 declaration that plaintiffs’ counsel did not ask her about attendance on any given day during her deposition.

McComas admitted she did not become Executive Director until 2014 and therefore had no personal knowledge of what had occurred at Pacific Oaks between 2007 and 2013. However, according to McComas, DSS did not require Pacific Oaks to meet any conditions before it approved the increase in capacity in April 2014.

Plaintiffs asked the court to admit sign-in sheets Pacific Oaks had located for the 2009-2013 school years. Following briefing on the admissibility of the documents, the trial court found "the sign-in sheets admissible as party admissions as to the number of children expected in each program on the date specified on the sign in sheets. The signatures and sign in/out times are not admissible." The court ordered Pacific Oaks to produce the records within five days of the order.

Pacific Oaks gathered the sign-in sheets in response to the notice to attend trial and bring documents. The custodian of records testified at trial. However, because the trial was conducted remotely, plaintiffs did not have physical access to the documents at trial. Pacific Oaks further argued plaintiffs were not entitled to a copy of the records until the court admitted them into evidence.

In June 2021, plaintiffs submitted their closing trial brief, which included a declaration from plaintiffs’ counsel, Allan A. Shenoi (Shenoi Declaration). Shenoi attested that exhibits A and B to the declaration "offer[ed] a general compilation of [the] 6,510" sign-in sheets Pacific Oaks produced. The compilations consisted of charts noting the number of students listed on each sign-in sheet by hour for each Pacific Oaks preschool program. Pacific Oaks moved to exclude the Shenoi Declaration. In August 2021, the court granted Pacific Oaks’s motion, finding: 1) the declaration was hearsay without exception, and therefore not admissible under the secondary evidence rule; 2) Shenoi was acting as an advocate-witness through the declaration, in violation of the rules of professional conduct; and 3) the declaration was untimely offered after the close of evidence.

Statement of Decision

In April 2022, following the issuance of a proposed statement of decision and submission of the parties’ objections, the trial court issued its final statement of decision. The court found plaintiffs failed to prove their UCL class claim.

The court rejected plaintiffs’ objection to the exclusion of the infant/toddler program and the school age program from the class and denied plaintiffs’ request for reinstate- ment of the prior class definition. The court reasoned that redefining the class after trial would violate absent class members’ procedural and substantive due process rights. The court further concluded neither excluded program was subject to the same licensing requirements as the preschool programs.

In their closing brief, plaintiffs asked the court to draw a negative inference against Pacific Oaks based on its failure to produce rosters kept pursuant to Health and Safety Code section 1596.841. The court denied the request. Although Pacific Oaks had not produced the rosters, the court concluded no adverse inference was appropriate since, as defined by statute, the rosters would not contain "the kind of information that would assist Plaintiffs in establishing their claims."

Health and Safety Code section 1596.841 requires a child day care facility to "maintain a current roster of children who are provided care in the facility. The roster shall include the name, address, and daytime telephone number of the child’s parent or guardian, and the name and telephone number of the child’s physician."

The trial court again rejected plaintiffs’ argument that capacity was synonymous with enrollment. Instead, the court concluded, as it had in ruling on plaintiffs’ motion for summary adjudication, that capacity "speaks to the number of children that may attend at a given time." The statement of decision then addressed each aspect of plaintiffs’ evidence and concluded they failed to establish their "children (or any others) attended a particular program which was at overcapacity when the children were in that particular program."

The court noted McComas’s deposition testimony defined capacity by the number of children present at the facility " ‘at one time.’ " It also found credible McComas’s trial testimony that she and plaintiffs’ counsel did not have a common understanding of the term "capacity" during her deposition. It afforded little weight to McComas’s statement in her 2016 declaration that the school was operating over the capacity limit. The court reasoned McComas had no personal knowledge of events at Pacific Oaks before she became Executive Director in 2014 and she did not review any attendance records before attesting the school was overcapacity.

The trial court also concluded plaintiffs did not establish that Rosenberg had knowledge of any capacity violation during her tenure. The court found Tambe’s August 2013 e-mail was admissible as "an admission by Pacific Oaks as to what parents were told," but excluded as inadmissible hearsay the e-mail’s statement that DSS told "an unidentified member" of the administration about the licensing issue. The trial court noted that "[a]lthough Tambe appeared on Plaintiffs’ witness list, she was not called by Plaintiffs at trial nor was any deposition testimony from her provided. Likewise, no witness from DSS was called. Although DSS’s records were subpoenaed there is no indication that DSS cited Pacific Oaks for a violation of its capacity license, sought to revoke its license, referred it to either civil or criminal authorities, or imposed any civil penalty upon it."

As for the sign-in sheets, the court reiterated that plaintiffs’ summaries attached to the Shenoi Declaration were "based on a methodology that is not set forth in the record and [on] testimony that was excluded." The court noted the sign-in sheets for the 2009-2010 school year appeared to indicate that over 77 children were expected to attend the morning programs during that year. The court indicated this permitted an inference that more students may have attended than the license allowed in the 2009 to 2010 morning preschool pro- grams. Yet, the court concluded that even if that inference were drawn, the evidence did not show plaintiffs "had any cognizable injury, as they did not attend Pacific Oaks in 2009–2010."

The trial court reasoned that without evidence that plaintiffs’ children attended Pacific Oaks at a time when the DSS license was violated, plaintiffs could not establish standing under Business and Professions Code section 17204. Further, as to absent class members whose children were enrolled in the morning program in the 2009-2010 school year, there was no showing as to what those class members would have done had they known of any capacity violation. The court further noted plaintiffs had not established the alleged capacity violation impaired student safety, or that the children received anything other than the education Pacific Oaks had promised, thus the requested remedy of a full tuition refund would not be equitable.

[1] The court deferred entry of judgment in favor of Pacific Oaks until after plaintiffs’ individual claims were tried. Plaintiffs timely appealed from the court’s order.

The trial court’s findings and order in favor of Pacific Oaks is a final determination of the merits of plaintiffs’ UCL class claim for unlawful conduct and it terminated all class action litigation. (Estate of Lock (1981) 122 Cal.App.3d 892, 896, 176 Cal.Rptr. 358 [a memorandum of decision is an appealable order when its "substance or effect" is a final determination on the merits].) The order is therefore appealable under the death knell exception to the one final judgment rule. (Cf. Kight v. CashCall, Inc. (2011) 200 Cal.App.4th 1377, 1386, fn. 2, 133 Cal.Rptr.3d 450.)

DISCUSSION

I. The Trial Court Correctly Concluded that "Capacity" Under the DSS License Limited the Number of Children Permitted to be Present at Any One Time, Not Aggregate Enrollment

[2, 3] The UCL prohibits "any unlawful, unfair or fraudulent business act or practice …. " (Bus. & Prof. Code, § 17200.) "An unlawful business practice under section 17200 is ‘ "an act or practice, committed pursuant to business activity, that is at the same time forbidden by law. [Citation.]" ’ [Citation.]" (Progressive West Ins. Co. v. Superior Court (2005) 135 Cal. App.4th 263, 287, 37 Cal.Rptr.3d 434.) "By proscribing ‘any unlawful’ business practice, ‘section 17200 "borrows" violations of other laws and treats them as unlawful practices’ that the [UCL] makes independently actionable." (Cel–Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180, 83 Cal.Rptr.2d 548, 973 P.2d 527.)

Plaintiffs sought to establish that Pacific Oaks engaged in unlawful conduct by operating in violation of the capacity limit set forth in the DSS license. They rely on section 101161, subdivision (a), which provides; "A licensee shall not operate a child care center beyond the conditions and limitations specified on the license, including the capacity limitation."

During the class period, Pacific Oaks’s DSS license capacity limitation was 77 children. Throughout the litigation, plaintiffs argued the aggregate enrollment data for the class period demonstrated that Pacific Oaks enrolled more than 77 children in each of the years at issue. Plaintiffs contend the term "capacity limitation" in section 101161, subdivision (a), refers to enrolled children, irrespective of how many children might be physically present at the facility at any particular time.

The trial court rejected plaintiffs’ interpretation of the regulation and the term "capacity." The court concluded aggregate enrollment data would not establish that Pacific Oaks violated the capacity limitation. Instead, the court found plaintiffs were required to show Pacific Oaks had over 77 children in attendance, not merely enrolled, to prove the school violated the DSS license.

On appeal, plaintiffs continue to argue that enrollment numbers exceeding the DSS license capacity limit were sufficient to establish Pacific Oaks operated in violation of the license. Neither the plain language of the relevant regulations nor any other legal authorities support their argument.

A. Standard of review

[4, 5] " ‘ "The interpretation of a regulation, like the interpretation of a statute, is, of course, a question of law." ’ " (Manriquez v. Gourley (2003) 105 Cal.App.4th 1227, 1234, 130 Cal.Rptr.2d 209 (Manriquez).) We review questions of law de novo.

[6–10] When no reported California decision or administrative interpretation of a regulation exists, courts "interpret the regulation in accordance with applicable rules of statutory construction." (Manriquez, supra, 105 Cal.App.4th at p. 1235, 130 Cal.Rptr.2d 209; Butts v. Board of Trustees of California State, University (2014) 225 Cal.App.4th 825, 835, 170 Cal. Rptr.3d 604 (Butts).) "We give the regulatory language its plain, commonsense meaning. If possible, we must accord meaning to every word and phrase in the regulation, and we must read regulations as a whole so that all of the parts are given effect." (Butts, at p. 835, 170 Cal.Rptr.3d 604.) "When the agency’s intent cannot be discerned directly from the language of the regulation, we may look to a variety of extrinsic aids, including the purpose of the regulation, the legislative history, public policy, and the regulatory scheme of which the regulation is a part. [Citation.] Whenever possible, we will interpret the regulation to make it workable and reasonable." (Manriquez, at p. 1235, 130 Cal.Rptr.2d 209.)

B. The meaning of capacity

[11] We begin our analysis with the plain text of the regulations. As noted above, section 101161, subdivision (a), prohibits a licensee from operating a child care center beyond the conditions specified in the license, including the "capacity limitation." Section 101152, subdivision (c)(2), defines " ‘capacity’ " as "the maximum number of children authorized to be provided care and supervision at any one time in any licensed child care center." Section 101179, subdivision (a) similarly provides that "[a] license shall be issued for a specific capacity, which shall be the maximum number of children that can be cared for at any given time."

Both section 101152, subdivision (c)(2) and section 101179, subdivision (a), use phrases indicating "capacity" includes a temporal element, and both refer to the maximum number of children a child care center can provide care for at once. A child care center can only provide care and supervision to children who are physically present at the center’s facility. The phrase "at any one time," in its ordinary usage, means at a given moment in time, as does "at any given time." Under the plain language of the regulation, "capacity" is an upper limit on the number of children who may be physically present at a child care facility while under the facility’s care and supervision.

Here, the parties disputed whether determining if Pacific Oaks exceeded "the maximum number of children that can be cared for at any given time" was properly measured by the number of children en- rolled at the school, or by the number of children actually in attendance at any one time. Plaintiffs argue the only relevant number is the number of children who were enrolled, irrespective of how many children were actually attending—physically present—at the school. Yet, at least in this case, the enrollment numbers did not represent the number of children simultaneously present, or expected to be present, and under Pacific Oaks’s care and supervision. Pacific Oaks’s total "enrollment" therefore does not align with the regulations’ definition of "capacity." The trial court properly rejected plaintiffs’ argument as inconsistent with the plain language of the relevant regulations. Plaintiffs’ interpretation is also inconsistent with other regulatory provisions and with the legislative purpose and intent of the authorizing statute.

For example, section 101179 instructs DSS to determine "capacity" by considering several factors, including the fire clearance; the licensee’s ability to comply with applicable laws and regulations; the physical features of the center, including available space; and the number of available staff. (§ 101179, subd. (b)(1)–(4).) The regulatory focus on the physical features of a child care facility indicates "capacity" functions as an upper limit on the number of children the facility can physically accommodate at a time. When, as in this case, all enrolled children are not expected to be present at the same time at the facility, aggregate enrollment numbers do not assist in determining whether the facility has sufficient physical space, or whether it can maintain required teacher-student ratios.

Measuring capacity by counting the children in attendance is also consistent with the statute authorizing the regulations, the California Child Day Care Facilities Act. (Health & Saf. Code, § 1596.70 et seq.) The express legislative intent of the statute includes ensuring "a quality childcare environment" and the well-being of children of working parents by regulating the quality of child care facilities. (Health & Saf. Code, § 1596.72, subds. (b), (e), (f).) The Legislature also found "California has a tremendous shortage of regulated childcare, and only a small fraction of families who need childcare have it." (Id., subd. (f).) Yet, plaintiffs’ interpretation of the regulations would restrict, rather than expand, the amount of potentially available child care. For example, using plaintiffs’ analysis, if a facility with a capacity limitation of 20 provides care to one group of 15 children in the morning, and another group of 15 children in the afternoon, with no overlapping times when all 30 children are present, the facility would still violate its license by having a total enrollment of 30 children. This interpretation of "capacity" would be inimical to the statute’s purpose of promoting "the development and expansion of regulated childcare." (Health & Saf. Code, § 1596.73, subd. (f).)

[12] We acknowledge that under some circumstances, enrollment numbers and attendance numbers might be functionally the same, or similar enough that enrollment numbers could provide circumstantial evidence or an inference of the number of children actually in attendance at any one time. In this case, however, the evidence established that the enrollment numbers in question were not a reliable proxy for how many children were physically present at Pacific Oaks at any given time. The enrollment numbers plaintiffs sought to rely upon were aggregate numbers that did not take into account the timing of different programs. The evidence affirmatively established that all enrolled children were not on campus at the same time. Instead, in any given class, some children attended only in the morning, some only in the afternoon, some all day. The enrollment numbers plaintiffs relied upon did not reflect these differences in attendance. Those numbers alone were therefore insufficient to establish a violation of the DSS license capacity limit.

Plaintiffs’ citations to statutes and regulations defining "capacity" based on enrollment do not undermine this conclusion. Plaintiffs contend that if the phrase "at any one time" in section 101152, subdivision (c)(2) refers to children in attendance, the term "enrollment" in Health and Safety Code sections 1596.807 and 1596.862 would have to be replaced with "attendance." We fail to see the connection between section 101152, a regulation that uses neither the term attendance nor the term enrollment, and entirely unrelated provisions of the Health and Safety Code. Plaintiffs offer no reasoning to explain their contention. Similarly, Health and Safety Code section 1596.803 lists application fees for the issuance of a child day care facility license and sets forth a graduated fee schedule that increases based on the capacity of the center. Nothing about the provision "anchors capacity to enrollment," because otherwise "the annual fee would fluctuate day to day, and hour to hour," as plaintiffs claim. The regulations define capacity as the maximum number of children allowed at a facility. That an application fee is based on that maximum allowable number does not indicate "capacity" means the number of children allowed to enroll in the aggregate, rather than the number of children allowed to attend at any given time.

Health and Safety Code section 1596.807 concerns DSS’s ability to allow an extended daycare program to serve additional children at a school site, so long as the additional children are "currently enrolled in a school," and the number of additional children "does not exceed 15 percent of the total enrollment in the extended daycare program. In no case shall the enrollment of the extended daycare program exceed the enrollment during the regular schoolday." Plaintiffs also refer to Health and Safety Code section 1596.862, which concerns written requests for "enrollment or retention of a nonminor student at a schoolage child care center."

Plaintiffs have provided no legal authority that supports their argument. Their reliance on Scott v. Phoenix Schools, Inc. (2009) 175 Cal.App.4th 702, 96 Cal.Rptr.3d 159 (Scott), is unavailing. In Scott, a former preschool director sued her employer for wrongful termination in violation of public policy after she informed the parents of a prospective student that the school did not have space for their child. (Id. at p. 705, 96 Cal.Rptr.3d 159.) The plaintiff "asserted she was terminated for refusing to violate California Code of Regulations, title 22, section 101216.3," which establishes teacher-child ratios at child care centers. (Id. at p. 709, 96 Cal. Rptr.3d 159.) After a jury found in the plaintiff’s favor, the school appealed.

Section 101216.3, subdivision (a) requires "a ratio of one teacher visually observing and supervising no more than 12 children in attendance," except as otherwise provided in the regulation.

The Court of Appeal found substantial evidence supported the conclusion that enrolling the child would have violated the regulation. (Scott, supra, 175 Cal.App.4th at p. 709, 96 Cal.Rptr.3d 159.) In its analysis, the court summarized data in class rosters that reflected the number of students "scheduled to attend" the particular classroom in which the parents sought to enroll their child. (Id. at p. 710, 96 Cal. Rptr.3d 159.) The number fluctuated, sometimes requiring two qualified teachers under the regulation, and sometimes requiring a teacher and an aide. (Ibid.) The court noted that if the prospective parents sought to enroll their child on certain specific days of the week, "the attendance of the … child would have violated the staffing ratios." (Ibid.) Although the evidence was inconclusive regarding both the days the prospective parents wanted their child to attend and the number of teachers or aides available to staff the classroom in which the child would be enrolled, the court concluded it was reasonable to infer enrolling the child would lead to a violation of the regulation based on witness testimony that "the class was already operating at times in violation of the staffing ratios, and that the school was short-staffed …." (Id. at p. 711, 96 Cal.Rptr.3d 159.)

Thus, the Scott court’s analysis of a potential violation was not based on enrollment alone, but instead a combination of enrollment numbers and evidence showing when enrolled students were "scheduled to attend." (Scott, supra, 175 Cal.App.4th at p. 710, 96 Cal.Rptr.3d 159.) That combined evidence indicated that on some days, enough enrolled children were scheduled to attend that adding one more child would cause the school to violate the teacher-child ratios the regulation required. (Ibid.) In this analysis, the court used attendance as a touchstone, as it was the attendance of the child, once enrolled, that would have led to a violation.

Plaintiffs ignore the role of attendance in Scott and instead focus on the court’s rejection of the employer’s argument that "it had no notice that enrolling too many children could lead to liability because the regulation is tied to attendance rather than enrollment." (Scott, supra, 175 Cal.App.4th at p. 714, 96 Cal.Rptr.3d 159.) The court reasoned the employer "could legitimately assume that if the [parents] enrolled their daughter, they intended for her to attend." (Id. at pp. 714–715, 96 Cal.Rptr.3d 159.) Therefore, "if the school forced its employees to enroll more children than the school could legitimately accept because of staffing requirements, that may be seen as requiring the employees to violate the regulation." (Id. at p. 715, 96 Cal.Rptr.3d 159.)

Plaintiffs urge us to read this portion of Scott as establishing a rule that under the child care center licensing regulations, enrollment is the equivalent of attendance in determining capacity. As an initial matter, we note that Scott did not concern capacity or sections 101152, subdivision (c)(2); 101161, subdivision (a); or 101179, subdivision (a). The alleged violation of teacher-child ratios—the basis for the Scott plaintiff’s wrongful termination claim—is not at issue in this case. That difference aside, however, the Scott court’s discussion of enrollment and attendance is inapplicable for more fundamental reasons. The Scott court considered enrollment on a single classroom level, and the use of that specific enrollment data as an indication of attendance. This was reasonable, in part, because the evidence established that at least on some days, the number of enrolled children scheduled to attend would require two teachers, rather than the teacher and aide who were assigned to the classroom on those days. Given the number of personnel available, the facility could reliably assume that adding one more child would prevent it from complying with teacher-child ratios on those days in particular. Further, on some days, all enrolled children were scheduled to attend.

In contrast, here plaintiffs argued only that the aggregate annual enrollment numbers established a capacity violation, irrespective of actual anticipated attendance, which varied based on the classroom, the time of day, and the day of the week. There was no evidence that all enrolled children were ever expected to be under Pacific Oaks’s care and supervision at the campus at the same time. Rather than offering admissible evidence of enrollment numbers that could reasonably approximate the relevant attendance of children as in Scott, plaintiffs merely argued capacity under the license and enrollment were one and the same. The Scott court’s reasoning using enrollment as a measure of expected attendance is therefore not applicable in this case.

To the extent plaintiffs eventually pivoted and argued a narrower set of enrollment numbers would establish a violation, they failed to provide admissible evidence to support their claim, as discussed more fully below.

Los Angeles International Charter High School v. Los Angeles Unified School District (2012) 209 Cal.App.4th 1348, 147 Cal. Rptr.3d 757 (Charter), which plaintiffs also cite, is even less relevant. Charter concerned a school district’s compliance with regulations in title 5 of the California Code of Regulations governing charter schools. The court found the enrollment data for one campus was sufficient to show the district properly considered "capacity" under a regulation requiring it to determine whether public school facilities could accommodate charter students. (Id. at p. 1359, 147 Cal.Rptr.3d 757.) Whether enrollment or attendance was the appropriate measure of capacity was not at issue, nor is there any reasoning or analysis to suggest any holding in the case would be persuasive in analyzing compliance with a child care center license. Cases are not authority for propositions not considered. (People v. Ault (2004) 33 Cal.4th 1250, 1268, fn. 10, 17 Cal.Rptr.3d 302, 95 P.3d 523.)

We thus reject plaintiffs’ strained and unsupported interpretation of section 101161, subdivision (a). Section 101179, subdivision (a) and section 101152, subdivision (c)(2) offer an unambiguous definition of capacity that can only be reasonably understood as setting an upper limit on the number of children who may physically be present at a center’s premises at one time, and therefore under the facility’s care and supervision. That number is reflected in attendance. While in some cases the same number may be equivalent to enrollment, that was not the case here. The enrollment data plaintiffs relied upon did not reflect attendance, or, in other words, did not reflect the number of children physically present at Pacific Oaks at any given time. Plaintiffs never proffered admissible evidence of enrollment similar to the evidence at issue in Scott. The trial court properly concluded plaintiffs could not prove a violation of section 101161, subdivision (a) using Pacific Oaks’s annual aggregate enrollment data alone.

II.–VI.

See footnote *, ante.

DISPOSITION

The trial court’s order is affirmed. Pacific Oaks to recover its costs on appeal.

We concur:

LAVIN, Acting P. J.

EGERTON, J.


Summaries of

Baker v. Pac. Oaks Educ. Corp.

California Court of Appeals, Second District, Third Division
Jan 25, 2024
317 Cal. Rptr. 3d 613 (Cal. Ct. App. 2024)
Case details for

Baker v. Pac. Oaks Educ. Corp.

Case Details

Full title:MATEO BAKER, a Minor, etc., et al., Plaintiffs and Appellants, v. PACIFIC…

Court:California Court of Appeals, Second District, Third Division

Date published: Jan 25, 2024

Citations

317 Cal. Rptr. 3d 613 (Cal. Ct. App. 2024)