Opinion
H044502
12-20-2018
VEENA RAMACHANDRAN, Plaintiff and Appellant, v. BLUE STAR INFOTECH AMERICA, INC., Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Santa Clara County Super. Ct. No. 1-16-CV-294989)
In 2016, Veena Ramachandran sued her former employer alleging she was wrongfully terminated in 2001. The trial court entered a judgment of dismissal against Ramachandran after sustaining a demurrer on statute of limitations grounds without leave to amend. On appeal, Ramachandran argues she sufficiently alleged that the limitations period was equitably tolled for more than 14 years while her administrative action was pending before the Division of Labor Standards Enforcement (DLSE) and during an ensuing enforcement action brought by the Labor Commissioner against the employer. We disagree and affirm.
I. FACTUAL AND PROCEDURAL BACKGROUND
Blue Star Infotech America, Inc. (Blue Star), a business engaged in software sales, employed Ramachandran as a sales manager from December 1999 until approximately September 5, 2001. Blue Star paid Ramachandran sales commissions as part of her compensation.
The Labor Commissioner is the Chief of the DLSE, a division in the Department of Industrial Relations. (Lab. Code, §§ 21, 79.) " '[I]f an employer fails to pay wages in the amount, time, or manner required by contract or statute, the employee may seek administrative relief by filing a wage claim with the [Labor Commissioner] or, in the alternative, may seek judicial relief by filing an ordinary civil action for breach of contract and/or for the wages prescribed by statute.' [Citation.] With respect to the first alternative, the Labor [C]ommissioner has broad authority to reject, investigate, adjudicate, or litigate (on behalf of the employee) depending on the nature of the employee's claim. [Citations.]" (Rebolledo v. Tilly's, Inc. (2014) 228 Cal.App.4th 900, 914.) An employee also may file a complaint with the Labor Commissioner if he or she has been discharged in retaliation for exercising rights protected by the Labor Code, in violation of section 98.6. (American Corporate Security, Inc. v. Su (2013) 220 Cal.App.4th 38, 43.)
All further statutory references are to the Labor Code unless otherwise indicated.
In late June 2001, Ramachandran filed a complaint with the Labor Commissioner alleging that Blue Star had underpaid her commissions during the 2000-2001 fiscal year ending March 31, 2001. The Labor Commissioner informed Blue Star of that claim (the Wage Claim) on or about July 17, 2001. Blue Star retaliated against Ramachandran for filing the Wage Claim by pressuring her into resigning and creating apparently legitimate grounds for her discharge. As part of that alleged retaliation campaign, Blue Star imposed a Revised Compensation Plan on Ramachandran. Ramachandran alleges one aspect of the Revised Compensation Plan—"the Bad Debt Formula"—was unlawful. She objected to that aspect of the Revised Compensation Plan. On September 5, 2001, Blue Star terminated Ramachandran's employment for the stated reason that she refused to accept the Revised Compensation Plan. Ramachandran alleges that, in fact, Blue Star terminated her employment in retaliation for her filing of the Wage Claim and her refusal to accept the Bad Debt Formula.
On September 10, 2001, Ramachandran filed a complaint with the Labor Commissioner alleging that Blue Star terminated her employment in retaliation for her filing of the Wage Claim. Blue Star responded to the complaint by letter dated December 6, 2001. Blue Star asserted that it had terminated Ramachandran's employment as a result of her refusal to accept the terms of the Revised Compensation Plan. On May 21, 2004, the Labor Commissioner found no violation of section 98.6 (i.e., no retaliatory discharge for exercise of Labor Code rights), concluding that Ramachandran was discharged for refusing to agree to the Revised Compensation Plan because it contained what she believed to be an unlawful forfeiture provision, but that her refusal did not constitute protected activity.
Ramachandran appealed to the Department of Industrial Relations on June 1, 2004. More than three years later, on August 6, 2007, the Director of the Department of Industrial Relations remanded the case "for further investigation and decision on whether [the Revised Compensation Plan] violated Section 221, and, if so, consideration of remedies . . . ." Seven more years passed before, on December 22, 2014, the DLSE determined that the Revised Compensation Plan did violate section 221 and that Ramachandran's objection to it was a protected activity under section 98.6. The DLSE ordered Blue Star to pay Ramachandran $78,012.50 in unpaid wages and commissions plus nearly $100,000 in interest. Blue Star lost its appeal of that order on June 2, 2015 but did not pay Ramachandran as ordered.
Section 221 makes it "unlawful for any employer to collect or receive from an employee any part of wages theretofore paid by said employer to said employee."
Four months later, on October 2, 2015, the Labor Commissioner filed a complaint against Blue Star in Santa Clara County Superior Court to enforce its order. Ramachandran was not a party to the lawsuit and, as her complaint in this case alleges, she "had no control or influence over the conduct of" that lawsuit. In late January 2016, the Labor Commissioner and Blue Star entered into a written settlement agreement, under which Blue Star would pay Ramachandran $45,000 in exchange for the dismissal of the enforcement action. Two days later, Ramachandran sought unsuccessfully to intervene. The action was dismissed on February 4, 2016. The following day, Ramachandran sought reconsideration of the denial of her motion to intervene. Her motion for reconsideration was denied on March 29, 2016.
Ramachandran filed this suit against Blue Star 42 days later, on May 10, 2016. The operative second amended complaint asserts a single cause of action for wrongful termination in violation of public policy based on Blue Star's alleged termination of Ramachandran's employment in retaliation for both her Wage Claim and her refusal to agree to the Revised Compensation Plan. Ramachandran further alleges that the statute of limitations on her claim was equitably tolled by the proceedings before the Labor Commissioner and the enforcement action. Blue Star demurred, arguing the complaint was untimely and failed to state a cause of action.
The complaint also names as a defendant Infogain Corporation, a company Ramachandran alleges "was and remains associated and in privity with BLUE STAR as its successor in interest and otherwise, and by reason of said association was and remains legally responsible for" Blue Star's alleged wrongful conduct.
The trial court sustained the demurrer without leave to amend in an order filed on December 15, 2016. The court reasoned that the administrative action before the DLSE did not equitably toll the statute of limitations on Ramachandran's wrongful termination claim, such that that claim was time-barred. Blue Star served a Notice of Entry of Judgment or Order on December 21, 2016. On February 6, 2017, Blue Star requested and obtained a dismissal with prejudice of Ramachandran's action. Ramachandran filed a notice of appeal on March 8, 2017.
II. DISCUSSION
A. The Appeal is Timely
Blue Star contends Ramachandran's appeal is untimely. In Blue Star's view, the December 21, 2016 Notice of Entry of Judgment or Order started the clock on Ramachandran's time to file a notice of appeal. It is true that, ordinarily, a party has 60 days from service of a notice of entry of judgment or a notice of entry of an appealable order to appeal. (Cal. Rules of Court, rule 8.104(a)(1)(B) ["a notice of appeal must be filed on or before the earliest of[¶] . . . [¶] 60 days after the party filing the notice of appeal . . . is served by a party with a document entitled 'Notice of Entry' of judgment or a filed-endorsed copy of the judgment, accompanied by proof of service"; id., rule 8.104(e) ["As used in (a) and (d), 'judgment' includes an appealable order if the appeal is from an appealable order"].) But "[a]n order sustaining a demurrer without leave to amend is not appealable . . . ." (Sisemore v. Master Financial, Inc. (2007) 151 Cal.App.4th 1386, 1396.) Accordingly, Blue Star's notice of entry did not trigger the 60-day period for filing a notice of appeal. Ramachandran properly waited to appeal until after the trial court entered a judgment of dismissal on February 6, 2017. (Ibid. ["an appeal is proper only after entry of a dismissal on" an order sustaining a demurrer without leave to amend].) Her notice of appeal, filed 30 days later, was timely.
B. The Trial Court Properly Sustained the Demurrer on Statute of Limitations Grounds
A wrongful termination in violation of public policy claim accrues at the time of discharge. (Romano v. Rockwell Internat. Inc. (1996) 14 Cal.4th 479, 501.) Because Ramachandran was discharged in 2001, the one-year statute of limitations set forth in Code of Civil Procedure former section 340 governs her claim. (Prue v. Brady Co./San Diego, Inc. (2015) 242 Cal.App.4th 1367, 1382 (Prue).) Ramachandran does not dispute that she filed her complaint more than one year after Blue Star terminated her employment and thus beyond the applicable one-year statute of limitations. Instead, she argues that the limitations period was tolled while she was pursuing her administrative claim with DLSE and during the Labor Commissioner's subsequent enforcement action.
Effective January 1, 2003, Code of Civil Procedure section 335.1 replaced Code of Civil Procedure former section 340; it provides a two-year statute of limitations for tort actions based on injuries to plaintiffs caused by the wrongful act or neglect of others. (Prue, supra, 242 Cal.App.4th at p. 1382.)
1. Standard of Review
We review an order sustaining a demurrer de novo, exercising our independent judgment as to whether a cause of action has been stated as a matter of law. (Moore v. Regents of University of California (1990) 51 Cal.3d 120, 125.) Because a demurrer tests only the legal sufficiency of the pleading, the facts alleged in the pleading are deemed to be true. (Berg & Berg Enterprises, LLC v. Boyle (2009) 178 Cal.App.4th 1020, 1034 (Berg & Berg Enterprises).) We will not, however, credit the allegations in the complaint where they are contradicted by facts that either are subject to judicial notice or are evident from exhibits attached to the pleading. (Hill v. Roll Internat. Corp. (2011) 195 Cal.App.4th 1295, 1300.)
We do not review the validity of the trial court's reasoning, and therefore will affirm its ruling if it was correct on any theory. (Berg & Berg Enterprises, supra, 178 Cal.App.4th at pp. 1034-1035.) Nor are we "limited to plaintiff[']s theory of recovery in testing the sufficiency of [its] complaint against a demurrer, but instead must determine if the factual allegations of the complaint are adequate to state a cause of action under any legal theory." (Barquis v. Merchants Collection Assn. (1972) 7 Cal.3d 94, 103.)
"Where a demurrer is sustained without leave to amend, [we] must determine whether there is a reasonable probability that the complaint could have been amended to cure the defect; if so, [we] will conclude that the trial court abused its discretion by denying the plaintiff leave to amend. [Citation.] The plaintiff bears the burden of establishing that [she] could have amended the complaint to cure the defect." (Berg & Berg Enterprises, supra, 178 Cal.App.4th at p. 1035.)
2. Equitable Tolling Principles
The equitable tolling doctrine " 'suspend[s] or extend[s] a statute of limitations as necessary to ensure fundamental practicality and fairness.' " (McDonald v. Antelope Valley Community College Dist. (2008) 45 Cal.4th 88, 99 (McDonald).) It is "a judicially created, nonstatutory doctrine . . . 'designed to prevent unjust and technical forfeitures of the right to a trial on the merits when the purpose of the statute of limitations—timely notice to the defendant of the plaintiff's claims—has been satisfied.' " (Ibid.) "Broadly speaking, the doctrine applies ' "[w]hen an injured person has several legal remedies and, reasonably and in good faith, pursues one." ' " (Id. at p. 100.) Therefore, equitable tolling applies where the plaintiff pursues an alternate administrative remedy before suing, even if exhaustion is not required such that the pursuit of the administrative remedy is voluntary. (Id. at p. 101.) Application of the equitable tolling doctrine discourages "duplicative filings" and relieves the "attendant burdens on plaintiffs, defendants, and the court system." (Id. at p. 102.)
Application of the equitable tolling doctrine requires a showing of three elements. (McDonald, supra, 45 Cal.4th at p. 102.) First, to satisfy the timely notice requirement, " ' "the first claim must have been filed within the statutory period" ' " and " ' "must alert the defendant in the second claim of the need to begin investigating the facts which form the basis for the second claim." ' " (Id. at p. 102, fn. 2.) Second, lack of prejudice to the defendant is required, meaning " ' "the facts of the two claims [must] be identical or at least so similar that the defendant's investigation of the first claim will put him in a position to fairly defend the second." ' " (Ibid.) Third, the plaintiff must have acted reasonably and in good faith. (Id. at p. 102.)
3. Ramachandran Fails to Allege Facts Showing Her Delay in Pursuing This Lawsuit was Reasonable and in Good Faith
Blue Star contends, and the trial court concluded, that the administrative proceeding before the DLSE did not toll the limitations period on Ramachandran's common law wrongful termination claim. For that position, Blue Star relies on Mathieu v. Norrell Corp. (2004) 115 Cal.App.4th 1174, 1190 (Mathieu), which held that administrative proceedings before the Department of Fair Employment and Housing (DFEH) did not equitably toll the limitations period on the plaintiff's common law claim for wrongful termination in violation of public policy. The Mathieu court relied on the fact that the plaintiff was not required to exhaust the administrative remedy she pursued in front of the DFEH before asserting her wrongful discharge claim, such that she could have pursued the two independent avenues for relief simultaneously.
In McDonald, decided after Mathieu, our Supreme Court reaffirmed the rule that "equitable tolling may extend even to the voluntary pursuit of alternate remedies," that is where exhaustion of the administrative remedy is not required prior to filing suit. (McDonald, supra, 45 Cal.4th at p. 101.) McDonald arguably casts doubt on Mathieu. But we need not assess Mathieu's on-going viability. Even assuming administrative proceedings before the DLSE can, as a matter of law, equitably toll the limitations period on a common law wrongful termination claim, Ramachandran fails to allege facts sufficient to show the doctrine applies here. Specifically, she fails to allege facts showing that she acted reasonably and in good faith.
In evaluating the third prerequisite to applying the doctrine of equitable tolling—good faith and reasonable conduct on the part of the plaintiff—courts consider "whether a plaintiff filed the second claim within a reasonable time after the period of tolling concluded." (Collier v. City of Pasadena (1983) 142 Cal.App.3d 917, 931; McDonald, supra, 45 Cal.4th at p. 102, fn. 2; Kolani v. Gluska (1998) 64 Cal.App.4th 402, 410 ["the leading cases finding an equitable tolling have involved short intervals between dismissal and refiling" ranging from three to about 30 days].) The plaintiff's diligence in pursuing the first claim also is relevant. (See Tannhauser v. Adams (1947) 31 Cal.2d 169, 177 [declining to apply equitable tolling doctrine where "[t]he first action brought by this plaintiff was not diligently pursued"].)
Here, Ramachandran filed this lawsuit more than 14 years after the alleged wrongful termination. The facts alleged indicate that Ramachandran diligently pursued her administrative claim and is not to blame for the inordinately protracted nature of the proceeding before the DLSE. Nevertheless, because nothing precluded Ramachandran from bringing this suit during the pendency of the DLSE proceeding, the fact that it dragged on for over a decade is relevant in determining the reasonableness of subsequent delays over which she had control.
Ramachandran filed this lawsuit more than 11 months after the administrative proceeding in the DLSE concluded. She contends it was reasonable for her to wait to sue until the Labor Commissioner sued to enforce the DLSE's determination and order. Given that it took the Labor Commissioner more than two-and-a-half years to issue an initial determination on Ramachandran's complaint and another seven years to issue a determination on remand, we strongly question the reasonableness of her decision to further delay filing suit in reliance on the Labor Commissioner.
Ramachandran filed this lawsuit 42 days after the denial of her motion for reconsideration of her motion to intervene in the enforcement action. She asserts that delay "was not unreasonably long." But she alleges no facts explaining why she reasonably needed six weeks to prepare and file a complaint that was premised on the same facts as was her administrative claim and that asserted theories raised in that proceeding. Ramachandran's reliance on Downs v. Department of Water & Power (1997) 58 Cal.App.4th 1093 (Downs) is misplaced. In that case, the plaintiff filed a charge of racial discrimination and harassment with the federal Equal Employment Opportunity Commission (EEOC) on March 15, 1993. (Id. at p. 1097.) Two-and-a-half years later, on September 29, 1995, the EEOC sent Downs a right to sue letter. (Id. at p. 1098.) He sued on December 28, 1995. (Ibid.) In concluding that the statute of limitations on the plaintiff's statutory claims was equitably tolled by the EEOC investigation, the court reasoned that "Downs reasonably awaited the outcome of the EEOC investigation and promptly filed his state law action within three months of receiving the right-to-sue letter from the EEOC." (Id. at p. 1102.) In the context of that case, which involved a two-and-a-half year long EEOC investigation, the three-month delay was reasonable. Here, Ramachandran's unexplained 42-day delay, which followed a 14-and-a-half year long administrative proceeding and enforcement action, was not reasonable.
Our Supreme Court has cautioned that "[t]he [equitable tolling] doctrine's application . . . should not substantially undermine the policy of prompt resolution of claims." (Addison v. State of California (1978) 21 Cal.3d 313, 321.) Applying it here, to a claim that accrued nearly two decades ago, would do just that. Therefore, we conclude that the trial court did not err in sustaining the demurrer on statute of limitations grounds. We need not reach Blue Star's alternative argument that the second amended complaint fails to state a cause of action.
C. The Trial Court Did Not Err in Denying Leave to Amend
Ramachandran fails to carry her burden to show there is a reasonable possibility that the defects in the second amended complaint can be cured by amendment. She does not contend she could amend the complaint to allege facts showing her delay in filing suit was reasonable. Therefore, we conclude the trial court did not abuse its discretion by denying her leave to amend.
III. DISPOSITION
The judgment is affirmed. Blue Star shall recover its costs on appeal.
/s/_________
ELIA, J. WE CONCUR: /s/_________
GREENWOOD, P. J. /s/_________
GROVER, J.