IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
OSCAR MENDOZA, individually and as class representative, DIVISION ONE
Appellant, No. 77948-6-I
v. PUBLISHED OPINION
EXPERT JANITORIAL SERVICES, L LC,
Defendant,
FRED MEYER STORES, INC.,
Respondent. FILED: October 28, 2019
DWYER, J. — A party has no ground to complain of unfairness when faced
with a consequence of obtaining the relief it requested and received from the trial
court. Here, having successfully obtained an order excluding Oscar Mendoza
and 68 of his fellow janitors (the Mendoza janitors) from a prior class action
lawsuit (Espinoza)—in which a group of janitors who worked in Fred Meyer
Stores, Inc. retail facilities throughout the Puget Sound area sought to recover
damages for violations of Washington’s Minimum Wage Act (MWA), chapter
49.46 RCW—Fred Meyer nevertheless seeks to avoid the consequences of its
choice by barring the Mendoza janitors from pursuing this separate lawsuit.
Accepting Fred Meyer’s contention that the Mendoza janitors were
virtually represented by the efforts of the class in Espinoza from which they were No. 77948-6-1/2
excluded, the trial court herein ruled that the Mendoza janitors were collaterally
estopped from bringing their claims under the MWA against Fred Meyer.
Because the Mendoza janitors attempted to join but were, at Fred Meyer’s
urging, excluded by court order from the class in Espinoza, we hold both that the
doctrine of virtual representation is not applicable to the Mendoza janitors and
that application of collateral estoppel herein works an injustice. Fred Meyer must
accept the consequences of its decision to successfully seek the exclusion of the
Mendoza janitors from the Espinoza lawsuit. Accordingly, we reverse.
In Espinoza, a group of janitors who worked in Fred Meyer stores in the
Puget Sound area between September 2011 and September 2014 filed suit
alleging violations of the MWA by All American Janitorial LLC (AAJ), M.H.
Janitorial LLC (MHJ), Expert Janitorial Services, LLC (Expert), and Fred Meyer.
Fred Meyer contracted out its janitorial work to Expert who—in turn—
subcontracted the work to AAJ and MHJ, who directly employed the Espinoza
janitors.
In September 2015, after the Espinoza lawsuit was instituted but prior to
the certification of the Espinoza class, Expert sent putative class members
settlement agreements that offered compensation to those who released their
claims against Expert and Fred Meyer. The Mendoza janitors are those who
were a part of the putative class but accepted these settlement offers. Later, five
of the Mendoza janitors submitted declarations in support of a request for relief
2 No. 77948-6-1/3
seeking to include all of the Mendoza janitors as part of the class in Espinoza.1
At the urging of Expert and Fred Meyer, the trial court, in its order
certifying the class in Espinoza, excluded the Mendoza janitors because none of
the class representatives had signed the proffered 2015 agreement and the trial
court was concerned that their interests could conflict with the Mendoza janitors’
interests. The Mendoza janitors subsequently filed this lawsuit in August 2016,
asserting many claims identical to those in Espinoza, but also including
allegations relating to the validity of the 2015 settlement agreements.
The Espinoza lawsuit was tried in January and February 2017. Following
trial, the trial court concluded that AAJ, MHJ, and Expert were liable for violations
of the MWA. It also ruled that Fred Meyer was not the Espinoza janitors’ joint
employer under the MWA and was therefore not liable to the janitors.
Shortly thereafter, the Espinoza and Mendoza janitors learned that Expert
was financially unable to pay the wages owed. As a result of Expert’s financial
difficulties, it settled with the Espinoza and Mendoza janitors for $720,000 in a
settlement approved by the trial court.
Meanwhile, in July 2017, the trial court herein certified the class of
Mendoza janitors. Fred Meyer then moved for summary judgment, asserting that
the Mendoza janitors should be collaterally estopped—by the Espinoza ruling
that Fred Meyer was not the janitors’ joint employer under the MWA—from
bringing their claims against Fred Meyer under the MWA. The trial court agreed,
concluding that the Mendoza janitors were collaterally estopped on the issue of
Another six of the janitors who signed settlements in 2015 submitted declarations on behalf of Expert opposing their inclusion in the class.
3 No. 77948-6-1/4
Fred Meyer’s status as a joint employer under a theory of virtual representation.
The Mendoza janitors appeal from the order dismissing their claims.
The Mendoza janitors contend that the trial court erred by dismissing their
claims against Fred Meyer on summary judgment. This is so, the Mendoza
janitors assert, because the trial court incorrectly concluded that collateral
estoppel barred their MWA claims against Fred Meyer. According to the
Mendoza janitors, the application of collateral estoppel to them was improper
because they were not parties to, nor in privity with parties to, the Espinoza
lawsuit, and because application of the equitable doctrine would work an
injustice. We agree.
A
We review de novo a trial court’s grant of summary judgment. Greensun
Gm., LLC v. City of Bellevue, 7 Wn. App. 2d 754, 767, 436 P.3d 397, review
denied, 193 Wn.2d 1023 (201 9). We affirm an order granting summary judgment
only “if there is no genuine issue of material fact and the moving party is entitled
to judgment as a matter of law.” Woods View II, LLC v. Kitsap County, 188 Wn.
App. 1, 18, 352 P.3d 807 (2015). On review, we ‘conduct the same inquiry as
the trial court and view all facts and their reasonable inferences in the light most
favorable to the nonmoving party.” Greensun Gm., 7 Wn. App. 2d at 767 (citing
Pac. Nw. Shooting Park Ass’n v. City of Seciuim, 158 Wn.2d 342, 350, 144 P.3d
276 (2006)).
4 No. 77948-6-1/5
The doctrine of collateral estoppel applies when the following four factors
are present: “(1) identical issues; (2) a final judgment on the merits; (3) the party
against whom the plea is asserted must have been a party to or in privity with a
party to the prior adjudication; and (4) application of the doctrine must not work
an injustice on the party against whom the doctrine is to be applied.” Malland v.
Dep’t of Ret. Sys., 103 Wn.2d 484, 489, 694 P.2d 16 (1985). “Whether collateral
estoppel applies to preclude relitigation of an issue is a question of law that we
review de novo.” Lemond v. Dept of Licensing, 143 Wn. App. 797, 803, 180
P.3d 829 (2008) (citing State v. Vasguez, 109 Wn. App. 310, 314, 34 P.3d 1255
(2001)); accord Weaver v. City of Everett, No. 96189-1, slip op at 6 (Wash. Oct.
17, 2019), http://www.courts.wa.gov/opinions/pdf/961 891 .pdf.
B
The Mendoza janitors first contend that they were not parties to, nor were
they in privity with parties to, the Espinoza lawsuit such that they should be
collaterally estopped from asserting that Fred Meyer is their joint employer under
the MWA. Fred Meyer concedes that the Mendoza janitors were not actual
parties to the Espinoza lawsuit, but asserts that they nevertheless satisfy the
party or party in privity requirement under the virtual representation doctrine. In.
response, the Mendoza janitors assert that (1) the virtual representation doctrine
is not applicable in the class action context when the party against whom the
doctrine is applied attempted to join but was denied membership in the prior
class action lawsuit, and (2) even if the doctrine was generally applicable to such
cases it does not support the application of collateral estoppel to the Mendoza
5 No. 77948-6-1/6
janitors’ claims.
Under Washington law, the virtual representation doctrine provides an
exception to the collateral estoppel “requirement that one be a party or in privity
with a party to the prior litigation.” Hackler v. Hackler, 37 Wn. App. 791, 795, 683
P.2d 241 (1984); accord Bacon v. Gardner, 38 Wn.2d 299, 229 P.2d 523 (1951);
Briqqs v. Madison, 195 Wash. 612,82 P.2d 113 (1938); Howard v. Mortensen,
144 Wash. 661, 258 P. 853 (1927). This doctrine is applied cautiously so as to
avoid unjustly depriving a nonparty of his or her day in court. Garcia v. Wilson,
63 Wn. App. 516, 520, 820 P.2d 964 (1991). To this end, we have previously
identified four factors that courts should consider before applying the doctrine:
(1) “whether the nonparty in some way participated in the former adjudication, for instance as a witness,” (2) “{tjhe issue must have been fully and fairly litigated at the former adjudication,” (3) “the evidence and testimony will be identical to that presented in the former adjudication,” and (4) “there must be some sense that the separation of the suits was the product of some manipulation or tactical maneuvering, such as when the nonparty knowingly decline the opportunity to intervene but presents no valid reason for doing so.’,
Dillon v. Seattle Deposition Reporters, LLC, 179 Wn. App. 41, 66, 316 P.3d 1119
(2014) (alteration in original) (quoting Garcia, 63 Wn. App. at 521). A court may
apply the virtual representation doctrine when a sufficient number of these
factors are present to ensure that application of the doctrine is fair to the party
against whom collateral estoppel is sought to be applied. Garcia, 63 Wn. App. at
521.
The Mendoza janitors assert that the virtual representation doctrine is not
6 No. 77948-6-117
applicable to class action lawsuits. Because no Washington case authority
directly addresses whether virtual representation may be applied in a case such
as this to satisfy the third factor of the collateral estoppel formula, the Mendoza
janitors cite to Smith v. Bayer Corp., 564 U.S. 299, 131 S. Ct. 2368, 180 L. Ed.
2d 341 (2011), in support of their position.2
In the cited case, the United States Supreme Court considered whether an
injunction issued by a federal court barring a state court from certifying a class
action lawsuit against Bayer Corp. fell within the relitigation exception to the Anti-
Injunction Act, 28 U.S.C. § 2283. Bayer Corp., 564 U.S. at 302. Two separate lawsuits were filed against Bayer Corp. seeking identical class certification to sue
on behalf of West Virginia residents who purchased Baycol, an allegedly
hazardous drug sold by Bayer Corp. Bayer Corp., 564 U.S. at 302-03. One of
the lawsuits was removed to federal court, where the federal district court,
applying Federal Rule of Civil Procedure 23, declined to certify the proposed
class. Bayer Corp., 564 U.S. at 303-04. Shortly thereafter, the federal district
court, at the request of Bayer Corp., issued an injunction prohibiting the West
Virginia state court from certifying the class in the other lawsuit. Bayer Corp.,
564 U.S. at 304.
As part of its consideration as to whether the injunction was permissible
under the Anti-Injunction Act, the Court explained that, for this to be so, the
2 The Mendoza janitors assert that application of the virtual representation doctrine violates procedural notice protections set forth in CR 23, see CR 23(b)(3), (c), and cite Bayer Corp. to support this argument. However, there is no dispute herein that the Mendoza class members received notice of the Espinoza lawsuit. Thus, we consider Bayer Corp. not for its specific analysis of Federal Rule of Civil Procedure 23 but, rather, for the general principles it espouses concerning who may fairly be considered a party and thus may be precluded from pursuing a separate lawsuit.
7 No. 77948-6-118
plaintiff in the state court lawsuit, Smith, “must have been a party to the federal
suit, or else must fall within one of a few discrete exceptions to the general rule
against binding nonparties.” Bayer Corp., 564 U.S. at 308. Bayer Corp. asserted
that Smith was bound by the federal district court’s ruling because the federal
lawsuit’s primary plaintiff, McCollins, had been acting in a representative capacity
for Smith and all other West Virginia residents that purchased Baycol when he
sought and was denied class certification in federal court. Bayer Corp., 564 U.S.
at 314-1 5.
The Court rejected this contention, explaining that “{t]he definition of the
term ‘party’ can on no account be stretched so far as to cover a person like
Smith, whom the plaintiff in a lawsuit was denied leave to represent.” Bayer
Corp., 564 u:s. at 313. The Court went on to further explain that
Federal Rule 23 determines what is and is not a class action in federal court, where McCollins brought his suit. So in the absence of a certification under that Rule, the precondition for binding Smith was not met. Neither a proposed class action nor a rejected class action may bind nonparties.
Bayer Corp., 564 U.S. at 315.
Although the Espinoza janitors were granted class certification, Bayer
Corp. supports the Mendoza janitors’ contention that determinations made in a
class action lawsuit cannot bind those who were, by court order, denied
membership in the class. Here, as in Bayer Corp., we decline to stretch the
definition of party so far as to cover the Mendoza janitors who were explicitly
excluded from the Espinoza class by court order.3
~ Fred Meyer does not provide any argument in its briefing pertaining to Bayer Corp. In its order granting summary judgment, the trial court attempted to distinguish Bayer Corp. by
8 No. 77948-6-1/9
The Mendoza janitors next assert that, even were we to determine that the
doctrine of virtual representation could be applicable to those in the situation of
the Mendoza janitors, the record herein does not support the trial court’s
conclusion that the Mendoza janitors were virtually represented in Espinoza.
This is so, the Mendoza janitors assert, because they did not participate in the
Espinoza litigation, the evidence and testimony that will be presented in a trial on
the Mendoza janitors’ claims will not be identical to that presented in Espinoza,
and the Mendoza janitors’ separate lawsuit was not the product of their
manipulation or tactical maneuvering. We agree.
To illustrate the inapplicability of the virtual representation doctrine herein,
we turn, for comparison, to our prior decision in Garcia. Therein, Garcia was a
passenger in a motor vehicle being driven by her roommate Teodoro Macias
when the vehicle collided with a vehicle driven by Rebecca Wilson. Garcia, 63
Wn. App. at 517. Both Macias and Garcia sustained injuries in the collision.
Garcia, 63 Wn. App. at 517, 521-22.
A few months later, Macias filed a lawsuit against Wilson, seeking to
recover damages for personal injuries. Garcia, 63 Wn. App. at 517. The suit
proceeded to trial, at which Garcia testified on behalf of Macias. Garcia, 63 Wn.
noting that here the Ewinoza class was actually certified, just without the Mendoza janitors as a part of the class. Under Bayer Corp., however, the issue was not merely whether any class had been certified, but whether McCollins could be fairly said to have represented Smith given that McCollins was ‘denied leave to represent” Smith by court order. Bayer corp., 564 U.S. at 313. Thus, the distinction between the cases pointed to by the trial court does not, in actuality, diminish the force of the United States Supreme Court’s pronouncement.
9 No. 77948-6-1/10
App. at 517. At the conclusion of trial, the trial court entered judgment for Wilson.
Garcia, 63 Wn. App. at 517.
Subsequently, Garcia filed her own lawsuit against both Macias and
Wilson, bringing an identical claim against Wilson as had been brought in
Maclas’s lawsuit against Wilson. Garcia, 63 Wn. App. at 518. The trial court,
however, dismissed Garcia’s claim against Wilson on summary judgment,
concluding that she was barred under the doctrine of collateral estoppel from
bringing her claim. Garcia, 63 Wn. App. at 518. Garcia appealed.
On appeal, we concluded that the virtual representation doctrine applied
and that the trial court had properly dismissed Garcia’s claim against Wilson.
Garcia, 63 Wn. App. at 522-23. We explained that Garcia had directly
participated as a witness in Macias’s lawsuit on Macias’s behalf, was living with
Macias at the time, and was, therefore, “fully aware of the character and issues
of the first suit.” Garcia, 63 Wn. App. at 521. It was also undisputed that all of
the issues presented by Garcia’s claim against Wilson had been fully and fairly
litigated in Macias’s lawsuit and that there would not be any difference from the
first lawsuit in the evidence and witnesses presented should Garcia be permitted
to pursue her claim against Wilson. Garcia, 63 Wn. App. at 521. In addition, we
noted that “Garcia began seeing a doctor the day after Macias filed his complaint,
leaving no other conclusion but that she was interested in the results of the trial
and could have intervened in Macias’s action.” Garcia, 63 Wn. App. at 521-22.
Furthermore, we concluded that, because Garcia “failed to demonstrate to the
trial court [that] any prejudice” could have resulted had she intervened, her
10 No. 77948-6-111 1
decision not to do so “appear[edj purely tactical. If Maclas had won, Garcia
would have gained a tactical advantage in pursuing her own claim.” Garcia, 63
Wn. App. at 522. Thus, we concluded that Garcia could fairly be collaterally
estopped, by application of the doctrine of virtual representation, from pursuing
her separate lawsuit against Wilson. Garcia, 63 Wn. App. at 522-23.
Unlike in Garcia, herein the fourth factor—that the separation of the suits
was the product of the Mendoza janitors’ manipulation or tactical maneuvering—
is notably absent. Five of the Mendoza janitors specifically sought inclusion of all
the Mendoza janitors in the Espinoza class. Fred Meyer and Expert successfully
opposed their inclusion, resulting in the trial court ordering that the Mendoza
janitors be excluded from that litigation. The trial court’s order excluding the
Mendoza janitors, against their express wishes, was clearly not a tactical
maneuver orchestrated by the Mendoza janitors.4 Indeed, the Mendoza janitors’
exclusion is most aptly characterized as being the result of Fred Meyer’s tactical
maneuvering, not that of the Mendoza janitors.
Fred Meyer now wishes to avoid the primary consequence of its
opposition to the Mendoza janitors’ request to be included in Espinoza—a
separate lawsuit. Fred Meyer asserts that—notwithstanding their exclusion by a
‘~ Our Supreme Court indicated its agreement with this proposition in Dean v. Lehman, 143 Wn.2d 12, 17-18 n.4, 18 P.3d 523 (2001). Therein, it declined to apply collateral estoppel to a group of inmates’ spouses bringing a class action against the Department of corrections (Doc). Dean, 143 Wn.2d at 15-16. The inmates had themselves brought claims against DOC in an earlier federal class action lawsuit. DOC sought to apply the rulings from that case to that of the inmates’ spouses. Dean, 143 Wn.2d at 17-18 n.4. The Supreme Court declined to do so, noting that it would “clearly work an injustice” to apply collateral estoppel because the inmates’ spouses had attempted to join the class in the federal action and had been excluded by order of the trial court. Dean, 143 Wn.2d at 17-18 n.4. The Supreme Court plainly did not view the spouses’ exclusion by court order to be a tactical maneuver of the spouses.
11 No. 77948-6-1/12
court order promoted by Fred Meyer—the Mendoza janitors could have
intervened in the Espinoza lawsuit at a later time to request that the trial court
reconsider its ruling, chose not to do so, and that this choice was a sufficient
tactical maneuver to permit application of the virtual representation doctrine.
This is nonsense.
First, Fred Meyer sought the order excluding the Mendoza janitors. If, as
Fred Meyer now asserts, reconsideration of that order was appropriate or
necessary to avoid prejudice to Fred Meyer, then Fred Meyer should have
sought reconsideration of that order. That Fred Meyer declined to do so was a
tactical decision by Fred Meyer. When Fred Meyer requested the exclusion of
the Mendoza janitors, it was asserting that the Mendoza janitors needed to bring
any claims they had against Fred Meyer in a separate lawsuit. Fred Meyer must
now accept the consequence of its tactical decision.5
Furthermore, the Mendoza janitors had good reason for declining to
intervene in Espinoza at a later time. Both the Espinoza janitors and the
Mendoza janitors are, and were at the time of the Espinoza trial, represented by
the same counsel. If, as Fred Meyer urges, the Mendoza janitors were required
to intervene and seek vacation of the order excluding them from the Espinoza
lawsuit in order to ensure that they could ever have their day in court, it might
well have created a conflict of interest for the janitors’ counsel. This is so
because successful intervention—at that late stage—might well have delayed
~ Fred Meyer’s assertion that the Mendoza janitors were obligated to do anything other than comply with the trial court’s adverse ruling excluding them from the Es~inoza litigation appears quite disingenuous—particularly given that no such assertion was ever raised by Fred• Meyer prior to it prevailing in the Espinoza trial.
12 No. 77948-6-1/13
final resolution of the Espinoza janitors’ claims, pitting the Mendoza janitors’
interest in obtaining their day in court against the Espinoza janitors’ interest in
resolving their claims as expeditiously as possible. The two groups of janitors
were not required to put their interests in opposition merely to relieve Fred Meyer
of the consequence of its litigation strategy. Both sets of janitors were entitled to
carry on with the services of their chosen attorneys.6
Our analysis of the remaining factors similarly distinguishes the present
matter from Garcia and supports our conclusion that the doctrine of virtual
representation was not properly applicable to the Mendoza janitors. Although it
is undisputed that the issue of joint employment was fully litigated in Espinoza,
the Mendoza janitors assert that the factors 9f participation in the prior lawsuit
and identical evidence are not met here. The Mendoza janitors advance a sound
argument.
The Mendoza janitors contend that the first factor of the virtual
representation analysis weighs against application of the doctrine because most
of the Mendoza janitors did not participate at all in the Espinoza litigation, and
none testified at trial in support of the Espinoza janitors.7 We agree.
6 Fred Meyer asserts, and the trial court appears to have accepted, that there would not have been any delay for the Espinoza janitors or any detriment to their interests had the Mendoza janitors intervened because the trial court could have bifurcated any non-common issues between the Espinoza and Mendoza janitors to avoid any delay of the trial on the issue of joint employment. This is not at all as plain as Fred Meyer avers. Even if the trial court had bifurcated the trial, both Espinoza and Mendoza janitors would have likely had to attend and testify in multiple trials, the trial on the issue of joint employment could have been delayed if the Mendoza janitors required additional discovery, and proceeding with multiple trials could have led to multiple appeals or requests for discretionary review, all of which could have greatly extended the time to finalize any award of damages to the Espinoza janitors. ~ This contrasts notably with Garcia, wherein Garcia herself testified at trial as a witness on behalf of Macias before subsequently bringing a separate lawsuit. 63 Wn. App. at 521.
13 No. 77948-6-1/14
To support their position, the Mendoza janitors cite to Frese v. Snohomish
County, 129 Wn. App. 659, 120 P.3d 89 (2005). Therein, we rejected application
of the doctrine of virtual representation to a group of 162 plaintiffs, in part
because, “[w]hile a few of the plaintiffs presented declarations in [the prior
lawsuit], most did not participate.”8 Frese, 129 Wn. App. at 665. That reasoning
resonates. The only participation in Espinoza by any members of the Mendoza
class consisted of 11 janitors filing declarations regarding whether they should be
included in the Espinoza class—with 5 in favor of inclusion and 6 opposing
inclusion—and trial testimony offered by 6 janitors on behalf of Expert and Fred
Meyer. ~ This minimal participation by some of the Mendoza janitors, especially
when the bulk of the participation was in support of Fred Meyer’s side of the
case, does not support application of the virtual representation doctrine to the
Mendoza janitors as a class.
The Mendoza janitors next aver that application of the virtual
representation doctrine is improper herein because the evidence and testimony
in a Mendoza trial will not be identical to that presented in the Espinoza trial.
This is so, they explain, because they wish to present new evidence in a trial for
8 Fred Meyer asserts that we should disregard Frese because we therein noted that
application of collateral estoppel was inappropriate when the respondents had failed to raise the matter before the trial court. While the Frese court did note that the respondent had failed to raise the issue below, and that such failure contributed to our decision not to apply collateral estoppel, we were also clear that the virtual representation factors, including the plaintiffs’ limited participation in the prior action, did not weigh in favor of application of the virtual representation doctrine. 129 Wn. App. at 665. ~ Fred Meyer asserts that all of the Mendoza janitors had the opportunity to testify in E~inoza and that this weighs in favor of applying the virtual representation doctrine. Fred Meyer does not cite to any case authority in support of this assertion. To the contrary, Garcia was clear that courts should consider whether “the nonparty in some way participated in the former adjudication,” not whether the nonparty had the opportunity to participate but opted not to do so. 63 Wn. App. at 521.
14 No. 77948-6-1/15
the Mendoza janitors regarding Expert’s financial situation that could support an
inference that the janitors were economically dependent on Fred Meyer.1° Again,
we agree.
The trial court explicitly acknowledged that the evidence the Mendoza
janitors wished to present at trial was not identical to the evidence presented in
Espinoza, but then nevertheless concluded that the new evidence does not
warrant a new trial when the vast amount of evidence regarding Fred Meyer’s
relationship to the janitors will be identical to what was presented” in Espinoza.
(Emphasis added.) This is incorrect for several reasons. First, Garcia did not
state that the test is whether the evidence will be substantially similar between
the two cases. Rather, the standard is whether “the evidence and testimony will
be identical.” Garcia, 63 Wn. App. at 521 (emphasis added). Second, the trial
court incorrectly described the Mendoza janitors’ request as a request for “a new
trial,” but the Mendoza janitors have never had a trial. Third, under the summary
judgment standard, the Mendoza janitors were entitled to the benefit of any
inferences that could be drawn from their new evidence. Evidence of Expert’s
financial difficulties could support an inference that the Mendoza janitors were
economically dependent on Fred Meyer.11
10 Fred Meyer asserts that, prior to the motion to dismiss, the Mendoza janitors conceded that relitigating the joint employment issue would be unnecessarily repeating a seven week trial, that they stipulated to admitting the Espinoza trial record, and that there are no material differences between the elicited testimony in Espinoza and the testimony that would be offered in a Mendoza trial pertaining to whether Fred Meyer is a joint employer. This is mostly untrue. While the Mendoza janitors did stipulate that the Espinoza trial record would be admissible and offered at a Mendoza trial, they did not agree that relitigating the joint employer issue was unnecessary or that no new evidence could be offered in a Mendoza trial pertaining to the joint employment issue. ~ For example, because Expert indemnified Fred Meyer for lawsuits brought by janitors, Fred Meyer’s legal expenses may have prevented Expert from being financially able to pay the
15 No. 77948-6-1/16
Additionally, the Mendoza janitors note that in Espinoza, a critical witness,
a Fred Meyer manager, was too ill to take the stand during trial, resulting in the
use of his deposition testimony in place of live testimony. In a Mendoza trial, the
janitors will seek to have him present live testimony. This, too, would be a
significant difference from the evidence and testimony presented in Espinoza.
Finally, a Mendoza trial will not include identical parties to those in the
Espinoza trial because Expert has settled with the Mendoza janitors. This could
result in changes to evidentiary rulings or strategy that may permit or cause
different evidence to be admitted at trial.12 Thus, there are numerous possible
differences between a potential Mendoza trial and the Espinoza trial. These
weigh against application of the virtual representation doctrine.
We conclude that the virtual representation factors weigh against
application of the doctrine. Fred Meyer has failed to establish that the Mendoza
janitors were parties, or in privity with parties, to Espinoza as required to apply
the doctrine of collateral estoppel.
janitors. If Fred Meyer had the power to direct Expert to use those funds to pay the Mendoza janitors rather than to litigate against the janitors, it could support an inference that the Mendoza janitors were economically dependent on Fred Meyer. Fred Meyer asserts that evidence of Expert’s insolvency or other financial difficulties subsequent to the class period is irrelevant to determining whether Fred Meyer was the Mendoza janitors’ joint employer during the class period because there could be many reasons for Expert’s financial difficulties. Fred Meyer points to the trial court’s order to support its contention. Therein the trial court noted that there were other possible business reasons why Expert was insolvent other than because it paid to indemnify Fred Meyer against janitor lawsuits. However, just because an inference could be drawn that other business reasons might explain Expert’s financial situation does not mean that an inference could not be drawn that Expert’s expenses indemnifying Fred Meyer prevented Expert from paying the Mendoza janitors the wages owed. On summary judgment, the Mendoza janitors are entitled to the benefit of all favorable inferences. 12 Stipulating to the admissibility of the Espinoza trial record is not the same as stipulating
to the evidentiary and other legal rulings from Espinoza.
16 No. 77948-6-1117
C
The Mendoza janitors next contend that even if the doctrine of virtual
representation was applicable to the janitors, application of collateral estoppel
was nevertheless improper herein because it worked an injustice. This is so, the
Mendoza janitors assert, because they attempted to join the Espinoza class, but
the trial court ordered that they be excluded. We agree.
In support of their contention, the Mendoza janitors cite to Dean v.
Lehman, 143 Wn.2d 12, 18 P.3d 523 (2001)13 Therein, the wife of a Department
of Corrections (DCC) inmate brought a class action suit against DCC challenging
the validity of a statute mandating deductions from all funds received by prison
inmates. Dean, 143 Wn.2d at 15-16. DCC asserted that the class should be
barred from suit under the doctrine of collateral estoppel based on an earlier
federal suit brought by the inmates that raised the same claims. Dean, 143
Wn.2d at 17-18 n.4. In rejecting DCC’S contention, our Supreme Court noted
that the wives had attempted to join the class in the federal action, but were
excluded by court order. Dean, 143 Wn.2d at 17-18 n.4. The court stated that
“[e]ven if the first three elements of collateral estoppel were satisfied in this case,
barring the Class’ claims would clearly work an injustice. The Class attempted,
13 Fred Meyer contends that the Mendoza janitors did not argue that application of collateral estoppel would be unjust before the trial court and that they therefore may not raise the argument on appeal. “But if an issue raised for the first time on appeal is arguably related to issues raised in the trial court, a court may exercise its discretion to consider newly-articulated theories for the first time on appeal.” Mavis v. King County Pub. Hosp. No. 2, 159 Wn. App. 639, 651, 248 P.3d 558 (2011) (internal quotation marks omitted) (quoting Lunsford v. Saberhagen Holdings, Inc., 139 Wn. App. 334, 338, 160 P.3d 1089 (2007), aff’d, 166 Wn.2d 264, 208 P.3d 1092 (2009)). Here, it is clear that the issue of collateral estoppel was before the trial court, and that the trial court considered, even if only briefly, whether it would work an injustice to apply the doctrine.
17 No. 77948-6-1/18
but was unsuccessful, in becoming a party to the federal lawsuit.’ Dean, 143
Wn.2d at 17-18 n.4.
The similarities between Dean and this matter are apparent. The
Mendoza janitors sought inclusion in the Esrinoza class. The trial court excluded
them from the class. Thus, as in Dean, it would “clearly work an injustice,” 143
Wn.2d at 17-18 n.4, to apply collateral estoppeL~4
Ill
The trial court erred by holding that the Mendoza janitors are collaterally
estopped from bringing their claims under the MWA against Fred Meyer.15
Accordingly, we reverse the trial court’s order granting summary judgment and
remand for further proceedings.
14 Fred Meyer asserts that Dean does not support the Mendoza janitors’ argument because the DCC inmates’ wives were only excluded from the federal class action because the court felt that the issues raised by the Class [of inmates’ wives] would be significantly different from those of the inmates.” Dean, 143 Wn.2d at 17-18 n.4. Thus, Fred Meyer contends that Dean stands only for the principle that it would be unjust to apply collateral estoppel to a class that was excluded because its issues were significantly different from the class in the prior lawsuit. However, even if this were so, the trial court herein excluded the Mendoza janitors because it considered their position to be significantly different than the Es~inoza class representatives because the Mendoza janitors had signed 2015 settlement agreements. 1~ Fred Meyer contends that we may also affirm on alternative grounds not considered or
ruled on by the trial court. While it is true that appellate courts have the discretion to affirm a trial court’s disposition of a summary judgment motion on any basis supported by the record, we decline to exercise that discretion herein. ~ Potter v. Wash. State Patrol, 165 Wn.2d 67, 78, 196 P.3d 691 (2008). The absence of a sufficient record and briefing on these alternative arguments militates against analyzing, in the first instance, arguments not considered by the trial court.
18 No. 77948-6-1119
Reversed and remanded.
__ / WE CONCUR:
V l ~ ~ (