Hodge v. Superior Court

51 Cal. Rptr. 3d 519, 145 Cal. App. 4th 278
California Court of Appeal·Decided November 29, 2006·No. B189941·Published·Cited by 30 cases

Opinion

51 Cal.Rptr.3d 519 (2006)
145 Cal.App.4th 278

Kenneth HODGE et al., Petitioners,
v.
The SUPERIOR COURT of Los Angeles County, Respondent;
Aon Insurance Services et al., Real Parties in Interest.

No. B189941.

Court of Appeal of California, Second District, Division Eight.

November 29, 2006.

*521 Marlin & Saltzman, Stanley D. Saltzman, Louis M. Marlin, Agoura Hills, Christina A. Humphrey, Irvine; Schwartz, Daniels & Bradley, Arnold W. Schwartz, Marcus J. Bradley; R. Rex Parris Law Firm and R. Rex Parris; and The Quisenberry Law Firm and John N. Quisenberry, Los Angeles, for Petitioners.

No appearance for Respondent.

DLA Piper Rudnick Gray Cary US, Shand S. Stephens, San Francisco, Jon D. Meer, Los Angeles, and Eric S. Beane, for Real Parties in Interest.

Bill Lockyer, Attorney General, Tom Greene, Chief Assistant Attorney General, Albert Norman Shelden, Assistant Attorney General, Ronald A. Reiter and Kathrin Sears, Deputy Attorneys General, as Amicus Curiae.

*520 COOPER, P.J.

Many employees in the state of California, who work more than 40 hours per week and 8 hours per day, have the right to receive payment for their overtime work. (Ramirez v. Yosemite Water Co. (1999) 20 Cal.4th 785, 789, 85 Cal.Rptr.2d 844, 978 P.2d 2.) In a lawsuit alleging an employer violated the employee's right to receive overtime pay, the employer bears the burden of proving the employee's exemption. (Id. at pp. 794-795, 85 Cal. Rptr.2d 844, 978 P.2d 2.) In this case, principally about overtime pay, the plaintiffs dismissed their statutory cause of action and allege only unfair competition in violation of Business and Professions Code section 17200 et seq. (§ 17200 or the Unfair Competition Law (UCL)).

We must decide whether the defendants are entitled to a jury trial. We conclude no jury trial is warranted. The gist of the section 17200 cause of action is equitable and the relief sought is equitable even though plaintiffs could have requested damages for the same violations, even though the employer has asserted an affirmative defense, and even though the UCL cause of action will require proof of the underlying Labor Code violations.

FACTUAL AND PROCEDURAL BACKGROUND

In a class action lawsuit, approximately 800 current and former workers' compensation claims adjusters sued for overtime pay. (Cal.Code Regs., tit. 8, § 11040). The operative complaint names Cambridge Integrated Services Group, Inc. (Cambridge), and AON Insurance Services, AON Service Corporation, and AON Corporation (collectively AON) as defendants.[1] Plaintiffs alleged that they were improperly denied payment for overtime work based on an administrative exemption contained in Industrial Welfare Commission Wage Order No. 4. Plaintiffs sought to recover wages for unpaid overtime work under various Labor Code provisions, including Labor Code section 1194, which authorizes the filing of a civil action for such a purpose.[2] Plaintiffs' UCL claim *522 was based on the same failure to pay overtime wages and on the alleged violation of the same Labor Code provisions. Defendants argued that plaintiffs were exempt under Wage Order No. 4, which provides that overtime pay requirements "shall not apply to persons employed in administrative, executive, or professional capacities." (Cal.Code Regs., tit. 8, § 11040(1)(A).)

The case was tried to a jury, but a mistrial was declared after the jury was unable to reach a verdict on the question whether the class members qualified for the administrative exemption in Wage Order No. 4. After the jury trial, plaintiffs amended the complaint to state only a cause of action for violation of section 17200. Plaintiffs' stated rationale was strategic: they wanted a bench trial instead of a jury trial.

The trial court ruled the defendants were entitled to a jury trial on the section 17200 claim. In this writ proceeding, plaintiffs challenge the trial court's order finding a jury trial to be appropriate. Because the petition raises an important legal issue, and because an appeal would not provide the plaintiffs with an adequate remedy if the trial court's determination were erroneous, we issued an order to show cause and stayed any jury trial in the action. A petition for a writ of prohibition is a proper method to challenge the trial court's determination that AON is entitled to a jury trial. (Southern Pox. Transportation Co. v. Superior Court (1976) 58 Cal.App.3d 433, 435, 129 Cal.Rptr. 912 [granting writ relief where party challenged grant of jury trial].) The Attorney General supports plaintiffs' argument that the defendants have no constitutional right to a jury trial on the UCL claim.[3]

DISCUSSION

Unfair competition statutes appeared in the 1930's. (Stop Youth Addiction, Inc. v. Lucky Stores, Inc. (1998) 17 Cal.4th 553, 567, 71 Cal.Rptr.2d 731, 950 P.2d 1086.) The UCL prohibits "unfair competition," which includes "any unlawful, unfair or fraudulent business act or practice." (§ 17200; see also Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1143, 131 Cal.Rptr.2d 29, 63 P.3d 937.) An "unlawful" business practice necessarily "`borrows' violations from other laws by making them independently actionable as unfair competitive practices." (Korea Supply Co., supra, 29 Cal.4th at p. 1143, 131 Cal.Rptr.2d 29, 63 P.3d 937.) "[T]he Legislature has clearly stated its intent that the remedies and penalties under the UCL be cumulative to other remedies and penalties." (Stop Youth Addiction, Inc. v. Lucky Stores, Inc., supra, 17 Cal.4th at p. 566, 71 Cal.Rptr.2d 731, 950 P.2d 1086.) An employer's alleged unlawful failure to pay wages, as in this case, can be the subject of a UCL claim. (Cortez v. Purolator Air Filtration Products *523 Co. (2000) 23 Cal.4th 163, 177, 96 Cal. Rptr.2d 518, 999 P.2d 706 (Cortez).

The sole issue here is whether AON is entitled to a jury trial on the section 17200 claim. A jury trial is an important constitutional right that should be "`zealously guarded by the courts.'" (Interactive Multimedia Artists, Inc. v. Superior Court (1998) 62 Cal.App.4th 1546, 1551, 73 Cal.Rptr.2d 462.) In Wisden v. Superior Court (2004) 124 Cal.App.4th 750, 754, 21 Cal.Rptr.3d 523, we identified the basic principles governing jury trials. "If the right to trial by jury existed at common law in 1850, when the California Constitution was adopted, it exists today[.]" (Id. at p. 754, 21 Cal.Rptr.3d 523.) "[T]he Legislature cannot, `by providing new remedies ... in form equitable,' convert a legal right `into an equitable one so as to infringe upon the right of trial by jury.'" (Id. at p. 755, 21 Cal.Rptr.3d 523,) quoting People v. One 1941 Chevrolet Coupe (1951) 37 Cal.2d 283, 299, 231 P.2d 832.) "`A jury trial must be granted where the gist of the action is legal, where the action is in reality cognizable at law.'" (Id. at p. 755, 21 Cal.Rptr.3d 523, quoting People v. One 1941 Chevrolet Coupe, supra, 37 Cal.2d at p. 299, 231 P.2d 832

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Hodge v. Superior Court, 51 Cal. Rptr. 3d 519, 145 Cal. App. 4th 278 (Cal. Ct. App. 2006).

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