Filed 9/20/17 McElroy v. Tenet Healthcare Corp. CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

Appeal from an order of the Superior Court of Orange County, Thierry Patrick Colaw, Judge. Affirmed.

Capstone Law, Glenn A. Danas, Robert Drexler, Stan Karas and Bevin Pike, for Plaintiff and Appellant.

Littler Mendelson, Elizabeth Staggs, Shannon R. Boyce, Anthony G. Ly, Emily T. Patajo and Keith A. Jacoby, for Defendants and Respondents.

INTRODUCTION

This is the second time around for this case. When the parties were here before, in 2013, the issue was the trial court’s denial of a motion to compel arbitration brought by respondent (then appellant) Tenet Healthcare Corporation. Tenet sought to arbitrate the Labor Code violations claims alleged by a nurse, the present appellant Kristiane McElroy, an employee of a Tenet hospital. Her complaint included individual claims for unpaid wages, class claims, and a representative cause of action under the Private Attorney General Act (PAGA), Labor Code sections 2698, et seq. The trial court had found the arbitration agreement unenforceable, and we reversed.[1]

Our 2013 opinion focused almost entirely on the enforceability of the arbitration agreement and whether it was unconscionable. But under controlling United States Supreme Court authority at the time, class-action waivers in arbitration agreements were enforceable. Consent to arbitrate class claims could not be read into an arbitration agreement subject to the Federal Arbitration Act if the agreement dealt only with individual claims. (AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333, 347-348 (Concepcion).) Accordingly when the case was remanded to the trial court, we ordered the class claims dismissed. In March 2014, the trial court dismissed all the group claims, including the PAGA claim, and sent McElroy’s individual causes of action to arbitration.

In June 2014, the California Supreme Court issued its opinion in Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348 (Iskanian). The court held that an employment arbitration agreement purporting to waive PAGA claims was unenforceable as contrary to public policy. (Id. at p. 384.)

McElroy then sought to reinstate her PAGA claim, which had been dismissed the previous March, in the trial court. First she tried a motion for reconsideration. That was denied. Then she tried a motion to vacate the judgment or for leave to amend the complaint to reallege the PAGA claim. That motion was also denied. She has appealed from the denial of the latter motion.

After filing a notice of appeal from the order denying the motion to vacate the judgment or for leave to amend, McElroy voluntarily dismissed her individual causes of action and filed a notice of appeal from that dismissal. The two appeals have been consolidated.

We can review only the orders for which timely notices of appeal were filed – the order denying McElroy’s motion to vacate the judgment or for leave to amend and the order to dismiss the individual claims. The motion to vacate the judgment did not conform to the requirements of Code of Civil Procedure section 663[2] and was untimely under section 663a. We review an order denying a motion for leave to amend for abuse of discretion, and we cannot say that the trial court abused its discretion in refusing to allow a tardy amendment to the complaint. As McElroy voluntarily dismissed her individual claims and we are affirming the trial court’s order denying the motions to vacate the judgment and for leave to amend, we affirm that dismissal as well.

FACTS

McElroy sued Tenet and Fountain Valley Hospital in February 2012 for Labor Code violations. Her complaint included a PAGA cause of action and class action allegations.

Tenet petitioned to compel arbitration. The trial court denied the petition, and Tenet appealed. We reversed and returned the matter to the trial court with orders to grant the petition to compel arbitration of McElroy’s individual claims and to dismiss the class claims. The opinion was filed on August 21, 2013. A petition for Supreme Court review was denied, and the remittitur issued on December 2, 2013. After reviewing the parties’ briefs on the fate of the PAGA claim, the trial court ordered McElroy’s individual claims to arbitration and dismissed the class action and PAGA allegations in the complaint without prejudice on March 26, 2014.

On June 23, 2014, our Supreme Court issued the Iskanian opinion, holding that an employer cannot require an employee to waive a PAGA claim before any dispute arises.[3] (Iskanian, supra, 59 Cal.4th at p. 387.) The court viewed a PAGA claim as being a contest between the employer and the State of California, with the employee standing as proxy for the State, rather than a typical class action between private parties. (Id. at pp. 384, 386-387.) Thus a PAGA claim was neither preempted by the Federal Arbitration Act (id. at pp. 386-387) nor subject to such United States Supreme Court prohibitions against class actions in arbitration as articulated in Concepcion, supra. (Iskanian, supra, 59 Cal.4th at pp. 387-388.) The United States Supreme Court denied a petition for writ of certiorari on January 20, 2015.

With Iskanian in hand, McElroy began efforts to revive her PAGA claim. She first filed a motion for reconsideration of the March 2014 order dismissing the PAGA portion of her complaint along with the class claims. This motion was filed on March 6, 2015. After oral argument, the court denied the motion on May 13, 2015.[4]

McElroy then filed a motion to vacate the March 2014 order dismissing the PAGA claim or, in the alternative, for leave to amend the complaint to reallege it. She filed this motion on October 10, 2015. After oral argument, the trial court denied this motion as well, on November 24, 2015. McElroy dismissed her individual claims with prejudice on March 11, 2016.[5]

McElroy filed a notice of appeal from the November 24 order on January 21, 2016. She filed a separate notice of appeal from the dismissal of her individual claims on May 23, 2016. The two appeals have been consolidated.

DISCUSSION

McElroy has identified four issues on appeal. The first two are related: the dismissal of her PAGA claims was erroneous, in light of the Supreme Court’s subsequent Iskanian decision, and the trial court abused its discretion in denying her motion to reconsider the dismissal. She also asserts that the court should have granted her motion to vacate the judgment or should have granted her leave to amend to reallege the PAGA claims.

I. Dismissal and Reconsideration

McElroy’s first two issues fail for at least two reasons. First, she did not file a notice of appeal from either the dismissal or the reconsideration motion. The notice of appeal defines our jurisdiction, and we cannot review a judgment or an appealable order from which no notice of appeal has been filed. (See Hardin v. Elvitsky (1965) 232 Cal.App.2d 357, 363-364.)

Second, the PAGA claim was dismissed on March 26, 2014. The motion for reconsideration was denied on May 13, 2015. The dismissal of the PAGA claim was an appealable order under the death-knell doctrine, which holds that an order that virtually demolishes a class action claim is appealable. [6] (See In re Baycol Cases I & II (2011) 51 Cal.4th 751, 757; Miranda v. Anderson Enterprises, Inc. (2015) 241 Cal.App.4th 196, 200-202 [death-knell doctrine applies to PAGA claims]; Safaie v. Jacuzzi Whirlpool Bath, Inc. (2011) 192 Cal.App.4th 1160, 1168 (Safaie); Stephen v. Enterprise Rent-A-Car (1991) 235 Cal.App.3d 806, 814.)[7] “[U]nlike the situation with most interlocutory orders, the plaintiff is provided the right to an immediate appeal even though the case is still pending. However, this special status has a necessary ramification: once the appellate period has passed or once the appellate court has affirmed the order and a remittitur has issued, the order is final and the plaintiff is bound by the final decertification decision.” (Safie, supra, 192 Cal.App.4th at p. 1171.)

McElroy did not file any notice of appeal until January 21, 2016. The time to appeal the dismissal of the PAGA claim had long expired. (See Alch v. Superior Court (2004) 122 Cal.App.4th 339, 361 [“Under any circumstances, a plaintiff will have one, and only one, opportunity to appeal an order that has the legal effect of disposing of all class claims.”].)

“Once a judgment has been entered, . . . the court may not reconsider it and loses its unrestricted power to change the judgment. It may correct judicial error only through certain limited procedures such as motions for new trial and motions to vacate the judgment.” (Passavanti v. Williams (1990) 225 Cal.App.3d 1602, 1606 [judgment, as distinct from order, is final determination of rights of parties in action].) A judgment includes any order that may be appealed (Cal. Rules of Court, rule 8.10(4)), and there is no question that an order dismissing class and PAGA claims may be appealed.

This also bars appeal from the motion to reconsider. An order denying a motion for reconsideration is reviewable only if the order sought to be reconsidered is appealable, as part of the appeal from that order. (§ 1008, subd. (g).) Since the dismissal of McElroy’s PAGA claim was not appealable – because the time to appeal it had expired – the order denying reconsideration of the dismissal is likewise not appealable.

When the PAGA and class claims were dismissed in March 2014, only McElroy’s individual claims survived, which claims had been consigned to arbitration. The court retained only enough jurisdiction to enter a judgment pursuant to the arbitrator’s decision or to send a second matter to the same arbitration. “Once a court grants the petition to compel arbitration and stays the action at law, the action at law sits in the twilight zone of abatement with the trial court retaining merely a vestigial jurisdiction over matters submitted to arbitration. This vestigial jurisdiction . . . consists solely of making the determination, upon conclusion of the arbitration proceedings, of whether there was an award on the merits . . . or not . . . .” (Brock v. Kaiser Foundation Hospitals (1992) 10 Cal.App.4th 1790, 1795; see Finley v. Saturn of Roseville (2004) 117 Cal.App.4th 1253, 1259-1260.)

Even if we were to consider the order denying the motion on the merits, McElroy’s arguments would fail. The only reconsideration procedure even arguably open to her in March 2014 was a motion under section 1008, subdivision (a) – assuming we can overlook the portion of the statute requiring a prior “application for an order” “made to a judge, or to a court.”[8] The time limit for a motion under this subdivision is jurisdictional. (§ 1008, subd. (e).) A court simply has no power to consider a motion for reconsideration under subdivision (a) made outside the time limits specified in the statute. (See Wiz Technology, Inc. v. Coopers & Lybrand LLP (2003) 106 Cal.App.4th 1, 17-18.)

McElroy argues that the court should have granted the motion under section 1008, subdivision (c),[9] but a party cannot make a motion under this subdivision. As interpreted by our Supreme Court, the statute permits a court to reconsider interim rulings whenever it perceives the necessity to do so, but restricts a party’s ability to move the court to reconsider. (Le Francois v. Goel (2005) 35 Cal.4th 1094, 1105-1107.) A party may “suggest” to the court that it might reconsider its ruling, but it cannot force the issue. (Id. at p. 1108.) McElroy’s actual contention is that the court abused its discretion by not following her suggestion, reconsidering the dismissal sua sponte, and then granting its own sua sponte motion. McElroy has presented us with no authority for the proposition that section 1008, subdivision (c), can operate in this coercive way, and we can find none. Finally, McElroy argues that the PAGA claim was still alive in her lawsuit because the claim had been dismissed without prejudice. That argument reflects a misunderstanding of the meaning of a dismissal. As section 581d provides, “All dismissals ordered by the court shall be in the form of a written order signed by the court and filed in the action and those orders when so filed shall constitute judgments and be effective for all purposes . . . .” According to Black’s Law Dictionary, a dismissal is “[a]n order or judgment finally disposing of an action, suit, motion, etc., without trial of the issues involved.” (Black’s Law Dict. (5th ed. 1979) p. 421, col. 2.) The March 2014 dismissal in this case finally disposed of the PAGA and class claims without a trial. It constituted a judgment. That is why, under the death knell doctrine, this dismissal was immediately appealable.

The court dismissed the PAGA claim without prejudice to avoid giving collateral estoppel effect to the dismissal, either for McElroy or for other Tenet employees with similar claims. (See Cardiff Equities, Inc. v. Superior Court (2008) 166 Cal.App.4th 1541, 1550 [dismissal without prejudice means new action can be filed on same allegations].) “Without prejudice” did not mean that the claim had entered a state of suspended animation, from which it could be revived in the same case.

To the extent that McElroy’s appeal encompasses the March 2014 dismissal of the PAGA claim and the denial of the motion for reconsideration, the appeal is dismissed.

II. Motion to Vacate Judgment

Our Supreme Court has recently confirmed that an order denying a motion to vacate a judgment under section 663 is a separately appealable order (Ryan v. Rosenfeld (2017) 3 Cal.5th 124 (Ryan)) which we now consider. In this case, the trial court denied the motion to vacate the judgment on several grounds. First, it perceived this motion as a disguised motion for reconsideration, one that failed to comply with the requirements of section 1008. Second, even considering the motion under section 663 alone, the motion failed to comply with the prescribed time limit – 180 days after entry of judgment at the latest. (§ 663a, subd. (a)(2).) Finally, contrary to the requirements of section 663, McElroy did not propose “another and different judgment” to be entered in place of the dismissal of the PAGA claim. Instead, she proposed to reinstate allegations in the existing complaint.

We agree with the trial court’s interpretation of the statutes. Section 663a

includes strict time limits within which a party may file a motion to vacate a judgment.[10] Like the time limits of section 1008, these limits are jurisdictional. (Garibotti v. Hinkle (2015) 243 Cal.App.4th 470, 479 (Garibotti).) The latest McElroy could possibly file such a motion was 180 days after the entry of judgment. As we have already explained, judgment was entered on March 26, 2014. McElroy did not file her motion to vacate the judgment until October 20, 2015, well over a year after the time to make this motion expired.

Moreover, as the trial court observed, if the court vacates a judgment on the motion of an aggrieved party, the court must enter “another and different judgment.” (See Garibotti, supra, 243 Cal.App.4th at pp. 476-477.) McElroy did not propose another judgment in place of the one dismissing the PAGA claim. Instead she proposed to reinstate the allegations of a PAGA claim.

The Legislature clearly intended such motions to be part of the trial process and to occur shortly after the conclusion of a trial or not at all. This section does not empower a court to start over. We therefore affirm the order denying the motion to vacate the judgment of March 26, 2014.

III. Leave to Amend the Complaint

“An order denying leave to amend a complaint is not appealable, unless it has the effect of eliminating all issues between the plaintiff and a defendant so that there is nothing left to be tried or determined.” (Figueroa v. Northridge Hospital Medical Center (2005) 134 Cal.App.4th 10, 12-13.) The issues between McElroy as an individual and Tenet were all still in the case, albeit in arbitration, at the time she filed her first notice of appeal. Thus there was still something to be determined when the notice of appeal was filed.

McElroy subsequently dismissed her individual claims against Tenet, and filed another notice of appeal from that dismissal. Without deciding whether this cured the problem with the first notice of appeal, the entire case is now before us. We will therefore address the merits of her appeal of the order denying her motion for leave to amend the complaint to reallege the PAGA claim.

We review a trial court’s decision regarding amending a complaint for abuse of discretion. (Bedolla v. Logan & Frazer (1975) 52 Cal.App.3d 118, 135.) The plaintiff has the burden of establishing abuse. (Leader v. Health Industries of America, Inc. (2001) 89 Cal.App.4th 603, 612.)

In refusing to allow McElroy to amend the complaint, the trial court cited the long and unexcused delay, resulting in the inevitable fading of memories and loss of documents, in addition to the prejudice to the defendants from the expansion of the scope of the claims.[11] The court also pointed out that McElroy had options to keep the PAGA claim alive. She or another Tenet employee could have filed a new suit after Iskanian was decided in June 2014. She could have sought appellate relief after Iskanian for the dismissal of her own PAGA claim. Instead, she inexplicably[12] waited 16 months after the Iskanian decision and nine months after the United States Supreme Court denied the petition for certiorari before moving to amend the complaint. The court found the delay “unreasonable and unexplained.”[13]

We cannot say the trial court abused its discretion in denying leave to amend. “The judge has discretion to deny leave to amend when the party seeking the amendment has been dilatory and the delay has prejudiced the opposing party.” (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2017) ¶ 6:655, p. 6-186.) “Prejudice exists where the amendment would result in a delay of trial, along with loss of critical evidence, added costs of preparation, increased burden of discovery, etc.” (Weil & Brown, supra, ¶ 6:656, p. 6-187.) That is precisely what the trial court found in this case. We cannot say it abused its discretion so deciding.

IV. Second Appeal

After filing a notice of appeal from the order denying her motion to vacate the judgment, McElroy voluntarily dismissed her individual claims and filed another notice of appeal from this dismissal, thereby giving rise to this consolidated appeal. Normally there is no right to appeal after a voluntary dismissal. An appeal taken after an adverse trial court ruling, however, operates as a request for entry of judgment based on the adverse ruling. The appeal of the voluntary dismissal is therefore proper. (Denny v. Lawrence (1994) 22 Cal.App.4th 927, 930, fn. 1; see Ashland Chemical Co. v. Provence (1982) 129 Cal.App.3d 790, 792-793 [dismissal after adverse ruling to expedite appeal not voluntary].)

At the time McElroy filed her notices of appeal, the California Supreme Court had not yet issued its opinion in Ryan, supra, so it was unclear whether an order denying a motion to vacate a judgment was an appealable order. McElroy therefore dismissed her individual claims, after the adverse ruling on her motion to vacate the judgment, to insure that she had an appealable final judgment.

As we are affirming the trial court’s November 24, 2015, order denying the motion to vacate the judgment, we also affirm the voluntary dismissal of McElroy’s individual claims. If we had reversed the order, we would also have reversed the precautionary voluntary dismissal and restored the case to its status quo ante the order dismissing the PAGA claim. As it is, however, the entire case, including McElroy’s individual claims, is resolved.

DISPOSITION

The order of November 24, 2015, is affirmed. The voluntary dismissal appellant’s individual claims is affirmed. Respondent is to recover its costs on appeal.

BEDSWORTH, ACTING P. J.

WE CONCUR:

FYBEL, J.

IKOLA, J.