Moreno vs. Circle Liquidators, LLC

released by the aggrieved employees.

2. The notice should state that the aggrieved employees will not be retaliated against for cashing settlement checks.

3. If any changes are made to the settlement agreement, please make corresponding changes to the notice.

4. The font size in the actual notice may not be smaller than the font size in the proposed notice provided to the Court.

8 Moreno vs. Circle Liquidators, LLC

2025-01519017

Plaintiff’s Motion for Separate Proceedings Against Non-Debtor Defendants Plaintiff Samantha Moreno’s unopposed motion to proceed separately against Defendants Ryan C. Maresch and Jose Lim-Valle is GRANTED. However, as set forth below, the Court has serious concerns about how Plaintiff’s class claims can move forward against Maresch and Lim-Valle in the absence of bankrupt Defendant Circle City Liquidators, LLC (“CCL”). Plaintiff should be prepared to address these concerns at the hearing. GROUNDS FOR RULING I.

Background

This action is based on class claims for wage-and-hour violations and Plaintiff’s individual wrongful termination claims for complaining about the alleged wage-and-hour violations. Maresch and Lim-Valle are allegedly the owners and managing agents of CCL, the employer defendant. As to the class claims, Plaintiff seeks to hold Maresch and Lim-Valle individually liable under LC § 558.1. As of the date of this hearing, only Lim-Valle has made an appearance. After this case was filed, CCL filed for bankruptcy under Chapter 7 of the Bankruptcy Code.

The case is therefore stayed as to CCL. (ROA 53.) II. Discussion “The Court, in furtherance of convenience or to avoid prejudice . . . may order a separate trial of . . . any separate issue.” (CCP § 1048(b).) Plaintiff argues bifurcation of the claims against Maresch and Lim-Valle is appropriate because the bankruptcy stay is inapplicable to LC § 558.1 claims against them. She relies on Boucher v. Shaw (9th Cir. 2009) 572 F.3d 1087. In Boucher, the plaintiffs sued the managers of a bankrupt casino (originally filed under Chapter 11, later converted to Chapter 7) for unpaid wages under Nevada law and the FLSA.

The district court dismissed the case, and the plaintiffs appealed. The Ninth Circuit certified to the Nevada Supreme Court the question of whether managers can be held liable for unpaid wage claims as “employers” under Nevada law. The Nevada Supreme Court answered in the negative. As a result, the sole remaining question was whether the managers could be individually liable under the FLSA. The managers didn’t argue they weren’t “employers” under the FLSA. Instead, they argued the casino’s conversion to Chapter 7 bankruptcy extinguished any individual duty they had to pay wages to the plaintiffs.

The Ninth Circuit rejected this argument. It explained, “Thus, section 362(a) does not stay actions against guarantors, sureties, corporate affiliates, or other non-debtor parties liable on the debts of the debtor.” (Id., at p. 1092 (internal quotation omitted).) “[O]ur case law regarding guarantors, sureties and other non-debtor parties who are liable for the debts of the debtor leaves no doubt about the answer: the [casino] bankruptcy has no effect on the claims against the individual managers at issue here.” (Id., at p. 1093.)

Here, LC § 558.1 provides that certain persons “may be held liable as the employer for” specified wage-and-hour violations. Maresch and Lim-Valle may be treated as employers for purposes of some of Plaintiff’s claims. Under Boucher, CCL’s bankruptcy has no effect on claims against Maresch and Lim-Valle in their capacity as employers under LC § 558.1. The motion is therefore granted. However, the Court has serious reservations about future proceedings. Plaintiff can likely prove Maresch and Lim-Valle’s managerial and ownership roles without implicating any bankruptcy issues.

But how does Plaintiff intend to prove the class wage-and-hour claims? Under LC § 558.1, Maresch and Lim-Valle are only liable to the class if the class suffered wage-and-hour violations. For example, because of the automatic stay, Plaintiff can’t propound a request for production seeking all time and pay records for the class, because those are the property of the bankruptcy trustee. Moreover, there are concerns about conflicting judgments. Again, Maresch and Lim-Valle are only liable to the class to the extent wage-and-hour violations occurred.

Because CCL is in bankruptcy, any judgment in favor of the class or even the individual plaintiff can’t bind CCL. As a result, to the extent the class’s claims against CCL survive bankruptcy, it’s possible the trier of fact could find Maresch and Lim-Valle are liable for wage-and-hour violations, but a subsequent trier of fact could find CCL not liable because no such violations occurred. Such a result would be absurd and should be avoided. 9 R.V. vs. The Regents of the University of California

2025-01493422

Defendant’s Demurrer to Complaint The Regents of the University of California (“University”) demur to the negligence claims in the operative complaints of plaintiffs Jane Doe R.V. and Jane Doe M.M., which are consolidated for pretrial purposes. As to R.V., the demurrer is OVERRULED AS MOOT because R.V. has dismissed her claims against the University with prejudice. (ROA 145.) As to M.M., the demurrer to the First Amended Complaint (FAC) is SUSTAINED WITHOUT LEAVE TO AMEND. GROUNDS FOR RULING Initially, the Court notes that M.M. contests only one of the several arguments raised by the University in its demurrer: she contends she has adequately alleged the University’s notice of Hoefs’ misconduct.

The Court accordingly treats the University’s other arguments as conceded. As to notice, M.M. alleges that she treated with Hoefs at UCI Medical Center from 1998 to 2001. She stopped treatment at that time “following a significant improvement in her medical condition.” (M.M. FAC, ¶ 31.) M.M. also alleges that complaints about Hoefs’ behavior were lodged “as early as 2016.” (M.M. FAC, ¶ 41.) Complaints made in 2016 cannot possibly have put the University on notice of Hoefs’ conduct when M.M. treated at the University from 1998 to 2001.

In opposition, M.M. contends the reference to 2016 was merely illustrative, not the earliest possible date of notice. This argument ignores the language of the pleading, which says complaints were lodged “as early as 2016.” The balance of M.M.’s opposition is directed at the University’s conduct surrounding a potential Second Amended Complaint. This argument is irrelevant to whether the FAC is subject to demurrer. Either M.M. has stated facts sufficient to constitute a cause of action, or she has not.

For these reasons, the demurrer is sustained. Given Plaintiff’s admissions as to the dates of treatment at the University and when the University arguably was on notice of Hoefs’ misconduct, the Court does not see how the claims against the University can survive. Indeed, Plaintiff’s proposed Second Amended Complaint does not include any amended allegations that will cure