Christopher Levanoff vs. Socal Wings LLC

Motion to Bifurcate

Cal. Super. - 4th Dist.September 28, 2011

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CAROTHERS DiSANTE & FREUDENBERGER LLP A W N © © Nu a Wn CAROTHERS DISANTE & FREUDENBERGER LLP Timothy M. Freudenberger, State Bar No. 138257 tfreud@cdflaborlaw.com Amy S. Williams, State Bar No. 228853 awilliams@cdflaborlaw.com Nancy N. Lubrano, State Bar No. 263037 nlubrano@cdflaborlaw.com 2600 Michelson Drive, Suite 800 Irvine, California 92612 Telephone: (949) 622-1661 Facsimile: (949) 622-1669 Attorneys for Defendants ELECTRONICALLY FILED Superior Court of California, County of Orange 11/20/2017 at 04:57:00 PM Clerk of the Superior Court By Olga Lopez, Deputy Clerk MATTHEW DRAGAS; SOCAL WINGS LLC; SC WINGS BUENA PARK, LLC; SC WINGS ALISO VIEJO, LLC; SC WINGS MISSION VIEJO, LLC; SC WINGS BLOCK, LLC; DRAGAS HOMES, INC. SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF ORANGE CHRISTOPHER LEVANOFF; ALISON DIAZ; ANDREW GAXIOLA; JENNA STEED; ROES 1 through 25, inclusive, as individuals and on behalf of all similarly situated employees, Plaintiffs, Vs. SOCAL WINGS LLC; MATTHEW DRAGAS; (DOE 1) SC WINGS BUENA PARK, LLC; (DOE 2) SC WINGS ALISO VIEJO, LLC; (DOE 3) SC WINGS MISSION VIEJO, LLC; SC WINGS BLOCK, LLC (DOE 4) DRAGAS HOMES, INC., and DOES 6 through 50, inclusive, Defendants. wr ” Ne we r” N e a r e a r Ne a a a a a a a a ea at a at ea a ’ e t e n a ’ 1293935.1 Case No. 30-2011-00511808-CU-OE-CXC Assigned for All Purposes To: Judge: Glenda Sanders Dept: CX101 DEFENDANTS’ NOTICE OF MOTION AND MOTION TO BIFURCATE THE LIABILITY AND DAMAGES PHASES OF THE DUAL RATE JURY TRIAL; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF Date: Time: Dept: December 15, 2017 1:30 p.m. CX101 Action Filed: September 28, 2011 Trial Date: ~~ January 16, 2018 Defs’ Motion to Bifurcate SS OO RX 3 A N Wn 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TO PLAINTIFFS AND THEIR ATTORNEY OF RECORD: PLEASE TAKE NOTICE that on December 15, 2017 at 1:30 p.m., or as soon thereafter as this matter may be heard in Department CX101 of the above-entitled Court, located at 751 Santa Ana Boulevard, Santa Ana, CA 92701, Defendants MATTHEW DRAGAS; SOCAL WINGS LLC; SC WINGS BUENA PARK, LLC; SC WINGS ALISO VIEJO, LLC; SC WINGS MISSION VIEJO, LLC; SC WINGS BLOCK, LLC; DRAGAS HOMES, INC. (“Defendants”) will and hereby do move this Court for an order bifurcating the liability and damages phases of the dual rate trial in this action on the grounds that it promotes judicial economy and efficiency. This motion is made pursuant to California Code of Civil Procedure section 598 and 1048(b). Defendants specifically request that if a jury finds Defendants liable on the dual rate overtime claim, the issue of damages (including with regard to the derivative claim for wage statement violations and waiting time penalties), is decided in a separate trial pursuant to California Code of Civil Procedure sections 598 and 1048(b). See also Shade Foods, Inc. Innovative Products Sales & Marketing, 28 Cal. App. 4th 847, 911 (2000). This Motion is based on this Notice of Motion, the Memorandum of Points and Authorities, the Declaration of Nancy N. Lubrano, any reply papers filed with this motion, argument of Defendants’ counsel, and the complete file and records in this action. Dated: November 20, 2017 CAROTHERS DiSANTE & FREUDENBERGER LLP Timothy M. Freudenberger Amy S. Williams Nancy N. (“Niki”) LLC; SC WINGS MISSION VIEJO, K, LLC and DRAGAS HOMES, 1 Defs” Motion to Bifurcate = W N N O Y Wn 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CAROTHERS DiSANTE & FREUDENBERGER LLP MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION Plaintiffs Christopher Levanoff, Alison Diaz, Jenna Steed, and Andrew Gaxiola (“Plaintiffs”) filed this class action on behalf of themselves, and current and former employees who worked at any one of four Buffalo Wild Wings franchise locations in Orange County. Plaintiffs’ only remaining class claim is for the alleged recovery of unpaid overtime based on the theory that the method used by Defendants to calculate overtime when class members worked different jobs with different hourly rates during a workweek was unlawful (the “dual rate” theory). To facilitate economy of resources, Defendants MATTHEW DRAGAS; SOCAL WINGS LLC; SC WINGS BUENA PARK, LLC; SC WINGS ALISO VIEJO, LLC; SC WINGS MISSION VIEJO, LLC; SC WINGS BLOCK, LLC; DRAGAS HOMES, INC. (“Defendants”) request that the Court enter an order bifurcating jury trial into two phases: liability and damages. With bifurcation, trial would proceed first only as to class liability. Then, and only if liability is found in favor of Plaintiffs and the class, a second damages phase would commence to determine individual class member recovery of damages. Here, Plaintiffs estimated a five to six day trial noting that they do not intend to call all class | members. Defendants anticipate that the liability phase of the dual rate trial would be approximately two weeks. If the jury decides that Plaintiffs cannot establish class wide liability, it will be unnecessary to present any evidence on damages and penalties. However, if Plaintiffs prevail in the liability phase, the trial on damages will last months because Defendants must call the Plaintiffs and all class members allegedly underpaid by the dual rate issue (approximately 110) to establish that each individual class member should not be entitled to recover in the action. Defendants have alleged setoff as an affirmative defense in this action. Thus, Defendants are entitled to present evidence, for example, that the class member took a 45 minute meal break but recorded only 30 minutes and therefore was paid for 15 minutes of time that was not earned or due; or provided friends and family free or discounted food or drink which was not authorized and so caused a loss to Defendants; or was grossly negligent in allowing a customer to leave without paying which also caused a loss to Defendant - all of which would result in a complete offset of 2 Defs’ Motion to Bifurcate 1293935.1 © 0 a 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CAROTHERS DiSANTE & FREUDENBERGER LLP any potential damages. This extremely lengthy second phase of trial would be completely unnecessary if Plaintiffs fail to establish class wide liability on the underlying claim. II. LEGAL ARGUMENT This motion is based upon the judicial policy of efficiency and economy in jury trials, promoting convenience of witnesses, and the avoidance of unnecessary prejudice to a party. Pursuant to Code of Civil Procedure Section 598, this Court is authorized to bifurcate liability and damages when bifurcation facilitates trial of the issues. Section 598 provides as follows: [t]he court may, when the convenience of witnesses, the ends of justice, or the economy and efficiency of handling the litigation would be promoted thereby, on motion of a party, after notice and hearing, make an order, no later than the close of pretrial conference in cases in which such pretrial conference is to be held, or, in other cases, no later than 30 days before the trial date, that the trial of any issue or any part thereof shall precede the trial of any other issue or any part thereof in the case, except for special defenses which may be tried first pursuant to Sections 597 and 597.5. The court, on its own motion, may make such an order at any time. Section 598 was enacted at the joint recommendation of the State Bar and the Judicial Council. Committee on Administration of Justice Report, 38 State Bar J. 485, 507 (1963); Judicial Council of Cal. 19th Biennial Rep. pp. 32-33 (1963). The primary purpose of Section 598 is to permit the issue(s) of liability to be tried prior to the issue(s) of damages. A separate liability trial is considered desirable to avoid wasting court time in cases where the plaintiff loses on the liability issue. In addition, bifurcation affords a more logical presentation of the evidence, thus simplifying issues for the jury. Foreman & Clark Corp. v. Fallon, 3 Cal. 3d 875, fn. 8 (1971). The statutory provisions for severance and separate trials (Code Civ. Proc. §§ 598, 1048) are not limited to the separate trial of a “cause of action” but also authorize a separate trial of any “issue.” American Motorists Ins. Co. v. Superior Court, 68 Cal. App. 4th 864, 872 (1998). “The court, in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy, may order a separate trial of any cause of action ... or of any separate issue or of any number of causes of action or issues.” Cal. Code Civ. Proc. 1048(b). Indeed, California law permits Courts wide latitude to conduct separate trials with different juries to promote judicial economy. Shade Foods, Inc. Innovative Products Sales & Marketing, 28 Cal. App. 4th 847, 911 3 Defs’ Motion to Bifurcate 1293935.1 N O Y 0 10 11 12 13 14 15 16 17 18 19 20 21 2 23 24 25 26 27 28 CAROTHERS DiSANTE & FREUDENBERGER LLP (2000) (court has discretion whether or not to order different juries for separate trials in an action), citing Jordan v. Guerra, 23 Cal. 2d 469 (1943). A. The Bifurcation Of Liability and Damages To Promote Efficiency And Economy Is A Routine Practice In Class Litigation It is well established that damages in class actions should be tried separately only after common class issues have been - “The amount of an individual class member’s claim is not germane to the trial of the common issues, but should be separately proven after the common class issues have been tried. There is no quarrel with the idea that in the usual class action the common class issues can and should be tried first and then the amount of damages of each individual class member can or may be determined in a subsequent procedure or bifurcated trial.” See Spoon v. Superior Court, 130 Cal. App. 3d 735, 745 (1982) (emphasis added), citing Daar v. Yellow Cab Co., 67 Cal. 2d 695, 704 (1967); Alpine Mut. Water Co. v. Superior Court, 259 Cal. App.2d 45, 66 (1968). Indeed, the California Supreme Court recently recognized that Courts seeking to preserve efficiency and other benefits of class actions routinely fashion methods to manage individual questions, including bifurcation. Duran v. U.S. Bank Nat. Assn., 59 Cal. 4th 1, 57 (2014). ; The statutory provisions for severance and separate trials (Code Civ. Proc. §§ 598, 1048) are not limited to the separate trial of a “cause of action” but also authorize a separate trial of any “issue.” American Motorists Ins. Co. v. Superior Court, 68 Cal. App. 4th 864, 872 (1998). That bifurcation is routine in nature is evident from the dearth of judicial opinions discussing bifurcation as a disputed issue. Indeed, reported cases simply reference that the parties stipulated to bifurcation or that the court granted a motion for bifurcation by one of the parties. See Interinsurance Exchange v. Marquez, 116 Cal. App. 3d 652, 655 (1981) (stipulated bifurcation); Minnick v. Dept. of Corrections, 95 Cal. App. 3d 506, 513 (1979) (stipulated bifurcation); Dept. Industrial Relations v. UI Video Stores, Inc., 55 Cal. App. 4th 1084, 1097 (1997) (“Because issues of the calculation of damages apparently remain to be determined, it is not appropriate to grant summary judgment for appellant at this time. . . . The correct procedure below would have been a 4 Defs’ Motion to Bifurcate 1293935.1 Oo 0 9 NN n h s 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CAROTHERS DiSANTE & FREUDENBERGER LLP motion to bifurcate the issue of liability, which the parties could have tried upon the undisputed facts” (internal citations omitted).) In the absence of state court precedent, California courts have been urged to follow federal class action rules which regularly employ bifurcation as a standard pred in class litigation. La Sala v. American Savings & Loan Ass'n, 5 Cal. 3d 864, 872 (1971). Pursuant to Federal Rule of Civil Procedure 42(b), federal courts have discretion to order a separate trial of any issue or claim where it is convenient and not prejudicial. /d.; See also Davis & Co. v. Summa Corp., 751 F.2d 1507, 1517 (9th Cir. 1985). Federal courts routinely exercise their authority to bifurcate class actions. See e.g., Smith v. University of Washington Law School , 1 F.Supp. 1324, 1328 (W.D. Wash 1998) (Court grants the plaintiffs’ motion to bifurcate the trial into class liability and individual damage phases); Cupolo v. Bay Area Rapid Transit, 5 F. Supp. 2d. 1078, 1080 (N.D.Cal. 1997) (Court grants plaintiffs’ motion for summary adjudication and bifurcation). B. The Court Should Bifurcate Liability And Damages To Provide Efficiency, Economy And Fairness. Bifurcation is appropriate here to further the judicial interest in efficiency and economy. As discussed above, California courts have held that it is appropriate in class action cases to try the common class issues before determining damages. Here, Plaintiffs estimated a five to six day trial noting that they do not intend to call all class members. (October 30, 2017 Hearing Transcript - 37:17-38:2 attached as Exhibit A to the Declaration of Nancy N. Lubrano (“Lubrano Decl.”) filed concurrently herewith.) Defendants vehemently dispute Plaintiffs’ assertion that Defendants’ method of calculating overtime was unlawful. In any event, while Defendants will present contrary evidence to all aspects of Plaintiffs’ case, Defendants anticipate a much more significant evidentiary dispute in terms of volume of evidence and witnesses with respect to the damages portion of trial, if any. If class liability is found, class members will be required to individually prove up their damages. See, e.g., Duran, 59 Cal. 4th at 29 (“After a class has been certified, the court’s obligation to manage individual issues does not disappear. Once the issues common to the class have been tried, . . . each plaintiff must still by some means prove up his or her claim.”); Sav-on v. 5 Defs’ Motion to Bifurcate 1293935.1 N N nn B w 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CAROTHERS DiSANTE & FREUDENBERGER LLP Sup .Ct., 34 Cal. 4th 319, 334 (2004) (“We long ago recognized ‘that each class member might be required ultimately to justify an individual claim’ . . . . [despite class treatment]”). Likewise, Defendants are entitled “to contest each individual claim on any ground not resolved in the trial of common issues.” Duran, 59 Cal. 4th at 29. Thus, if Plaintiffs prevail on the liability phase of trial, Defendants must call all 110 class members allegedly underpaid based on the dual rate issue to establish that esihi individual class member is not entitled to recover in the action. This type of evidence must be presented to the jury on an individual basis. As the evidence will demonstrate, assuming liability is established, the alleged underpayment of overtime to any class member is, on average, less than $1.25 total per class member. Thus, Defendant is entitled to and will call each and every class member to establish that the entire nominal sum of alleged overtime due is offset by other losses caused by the class member during his/her employment or the payment of compensation that the employee was not otherwise owed. For example, Defendant will elicit testimony establishing that a class member took a 45 minute meal break but recorded only 30 minutes and therefore was paid for 15 minutes of time that was not earned or due; or provided friends and family free or discounted food or drink which was not authorized and so caused a loss to Defendants; or was grossly negligent in allowing a customer to leave without paying which also caused a loss to Defendant - all of which would result in a complete offset of any potential damages. Indeed, Plaintiff Gaxiola admitted to giving friends and family free sodas on a monthly basis during his employment, which he admitted was stealing from the restaurant. See Lubrano Decl., Exhibit B (Gaxiola depo. Vol. II p. 22:12-24:5.). Similarly, Plaintiff Diaz gave away free alcoholic beverages during her employment, which led to her termination. See Lubrano Decl., Exhibit C (Diaz termination record). Because approximately 110 class members were allegedly underpaid based on the dual rate issue, this testimony will likely take several months. Accordingly, bifurcation will serve the interests of judicial efficiency and economy because, if liability is not proven during the first phase of the trial, there will be no need for a damages phase of the trial. Defendants cannot be deprived of their right to contest each and every claim for recovery. Bifurcation will allow for a more logical presentation of the relevant issues 6 Defs’ Motion to Bifurcate 1293935.1 BH W N N N Wn 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CAROTHERS DiSANTE & FREUDENBERGER LLP without the protracted issues related to damages that will become moot if there is no finding of liability. Moreover, bifurcation will not prejudice Plaintiffs as the damages issues and their proof are distinct from proof of liability. If Plaintiffs prove class wide liability, they will then be afforded an opportunity to present appropriate proof of damages. Thus, Defendants request a separate trial on the issue of liability on the dual rate issue before proceeding to the damages phase. Conducting the trial in this manner will promote judicial economy because in the event Plaintiff does not succeed in proving Defendants’ liability there is no reason to waste months of the jury’s time or this Court’s time on determining individualized damages. III. CONCLUSION In order to manage the individual issues that arise in determining damages and in the interest of efficiency and economy, the Court - bifurcate the liability and damages phases so that a jury first determines if class-wide liability exists in this action to avoid the potentially unnecessary protracted damages phase. Thus, Defendants respectfully seek an order bifurcating trial on the issues of damages and liability so that the issue of liability is tried first and, if a jury finds Defendants liable, the issue of damages is decided in a separate trial. Dated: November 20, 2017 CAROTHERS DiSANTE & FREUDENBERGER LLP Timothy M. Freudenberger Amy S. Williams Nancy N. (“Niki”) By: Nancy N. Lubrano Attorneys for Defendants MATTHEW DRAGAS; SOCAL WINGS, LLGQ;(SC WRIGS BUENA PARK, LLC; SC WINGS ALISO VIEJONLLC; SC WINGS MISSION VIEJO, LLC; SC GS BLOC LLC and DRAGAS HOMES, INC. 7 Defs’ Motion to Bifurcate 1293935.1 e h N o N o N o [Y S] No N N o N o - - [ r y - f t - - [O Y ft J aN Wn = Ww No - > \ O 0 ~ AN wn ES N Ww No - oo 28 CAROTHERS DiSANTE & FREUDENBERGER LLP Oo 0 9 O N nm BR W N PROOF F SERVICE STATE OF CALIFORNIA, COUNTY OF ORANGE. I, the undersigned, declare that I am employed in the aforesaid County, State of California. I am over the age of 18 and not a party to the within action. My business address is 2600 Michelson Drive, Suite 800, Irvine, California 92612. On November 20, 2017, I served upon the interested party(ies) i in this action the following document described as: DEFENDANTS’ NOTICE OF MOTION AND MOTION TO BIFURCATE THE LIABILITY AND DAMAGES PHASES OF THE DUAL RATE JURY TRIAL; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF By placing a true copy thereof enclosed in sealed envelope(s) addressed as stated on the attached mailing list. for processing by the following method: (via designated electronic filing service) 1 hereby certify that the above-referenced document(s) were served electronically on the parties listed herein at their most recent known email address or email of record by submitting an electronic version of the document(s) to One Legal, LLC, through the user interface at www.onelegal.com. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on November 20, 2017, at Irvine, California. Deborah MacArthur 00. Moa drs (Type or print name) (Signature) 8 Defs’ Motion to Bifurcate 1293935.1 w h W N Oo 0 uN AN 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CAROTHERS DiSANTE & FREUDENBERGER LLP Amelia Steelhead, Esq. ROSE KLEIN & MARIAS, LLP 801 S. Grand Avenue, 11% Floor Los Angeles, CA 90017 Facsimile: (213) 623-7755 Email: k.smith@rkmlaw.net a.steelhead@rkmlaw.net Steven R. Young Law Offices of Steven R. Young 600 Anton Boulevard, Suite 650 Costa Mesa, CA 92626 Facsimile: (714) 545-0355 Email: bestlawyer@aol.com 1293935.1 SERVICE LIST Kevin Mahoney, Esq. Katherine J. Odenbreit, Esq. MAHONEY LAW GROUP, APC 249 Ocean Boulevard, Suite 814 Long Beach, CA 90802 Facsimile: (562) 590-8400 Email: kmahoney@mahoney-law.net kodenbreit@mahoney-law.net 9 Defs’ Motion to Bifurcate