Tentative Ruling: Crystal Hernandez et al vs Alan Moelleken et al

Case Number

24CV00261

Case Type

Hearing Date / Time

Fri, 04/17/2026 - 10:00

Nature of Proceedings

CMC; Motion for Approval

Tentative Ruling

The motion of plaintiff Crystal Hernandez for preliminary approval of class action settlement and PAGA settlement is continued to June 12, 2026. Plaintiff shall file and serve a supplemental memorandum pertaining to the individual settlement payment described in paragraphs 20, 24, 42, and 46 of the parties’ settlement agreement on or before May 22, 2026.

Background:

On January 18, 2024, plaintiff Crystal Hernandez (Plaintiff) filed this action (Individual/PAGA Case) against defendants Carrillo Surgery Center, Inc., Central Valley Surgery Center, Inc., OSF Medical Group of California, Inc., California Medical and Surgical Management Group, Inc., and Alan Moelleken (collectively, Defendants). The complaint sets forth 13 causes of action (COAs) for: (1) failure to pay minimum wages in violation of Labor Code sections 1194, 1194.2, and 1197, and wage order No. 5; (2) failure to furnish wage and hour statements, Labor Code sections 226 and 226.3; (3) failure to maintain payroll records, Labor Code sections 1174 and 1174.5; (4) failure to provide meal and rest period compensation, Labor Code section 226.7; (5) failure to pay overtime compensation, Labor Code section 1194; (6) failure to pay wages in a timely manner, Labor Code section 204; (7) waiting time penalties, Labor Code sections 201, 202, and 203; (8) violations of the Fair Employment and Housing Act (FEHA) based on pregnancy, sex, and disability, Government Code section 12940, et seq.; (9) failure to provide reasonable accommodations in violation of Government Code section 12940 et seq.; (10) failure to engage in a good faith interactive process in violation of Government Code section 12940 et seq.; (11) FEHA violations based upon retaliation; (12) unfair competition, Business and Professions Code section 17200 et seq.; and (13) wrongful constructive termination in violation of public policy.

On March 11, 2024, Plaintiff filed a first amended complaint (FAC) which added a 14th COA for recovery of civil penalties under the Private Attorneys General Act (PAGA). As alleged in the FAC: Plaintiff is a registered nurse who worked for Defendants to provide pre-operation and post-operation care. (FAC, ¶¶ 19-22.) Defendants failed to provide uninterrupted meal breaks or required rest breaks, and never paid Plaintiff the required premium pay for missed or interrupted breaks. (FAC, ¶¶ 23-24.) Plaintiff was required to perform unpaid, off-the-clock work. (FAC, ¶ 25.) On March 24, 2023, Plaintiff informed Defendants that she was pregnant. (FAC, ¶ 26.) Defendants failed to accommodate Plaintiff’s pregnancy by rejecting reasonable work restrictions and ultimately terminating Plaintiff because of her pregnancy. (FAC, ¶¶ 27-45.) On June 28, 2023, Defendants emailed Plaintiff and told her that she was no longer permitted to come into work because of Defendants’ concern over patient safety. (FAC, ¶ 33.) Plaintiff was ultimately required to seek alternative employment. (FAC, ¶¶ 46-47.)

On May 29, 2025, Plaintiff filed a separate class action complaint in Santa Barbara Superior Court, case No. 24CV00261 (Class Action Case), against the same Defendants. The complaint in the Class Action Case set forth nine COAs for: (1) failure to pay minimum wages in violation of Labor Code sections 1194, 1194.2, and 1197, and wage order No. 5; (2) failure to furnish wage and hour statements, Labor Code sections 226 and 226.3; (3) failure to maintain payroll records, Labor Code sections 1174 and 1174.5; (4) failure to provide meal and rest period compensation, Labor Code section 226.7; (5) failure to pay overtime compensation, Labor Code sections 512 and 1194; (6) failure to pay wages in a timely manner, Labor Code section 204; (7) waiting time penalties, Labor Code sections 201, 202, and 203; (8) violation of Business and Professions Code section 17200, et seq.; and (9) failure to indemnify/reimburse necessary business expenditures incurred during discharge of work duties, Labor Code section 2802. The complaint in the Class Action Case asserts similar wage and hour claims to those asserted by Plaintiff in the Individual/PAGA case. The putative class is alleged to include all persons who were employed by Defendants during the relevant time period with any similar title who were non-exempt or misclassified exempt employees subject to similar wage violations.

On July 7, 2025, the parties participated in a full-day mediation pertaining to all claims in the Individual/PAGA Case and the Class Action Case. (LaCour Decl., ¶ 10, Ex. A at ¶ 5.) All of the claims in these two actions were settled at mediation. (Ibid.) The settlement was memorialized in a memorandum of understanding dated July 7, 2025. (Ibid.) A long-form agreement was executed by the parties between July 17 and July 22, 2025 (Settlement Agreement). (LaCour Decl., Ex. A at pp. 38-39.)

On July 25, 2025, pursuant to the parties’ stipulation, the court consolidated the Individual/PAGA Case and the Class Action Case for all purposes.

On November 12, 2025, Plaintiff filed a motion for preliminary approval of the Settlement Agreement. This motion is unopposed.

Analysis:

(1)       Procedures for Approval of Class Action Settlement

“Rule 3.769 of the California Rules of Court (CRC) sets forth the procedures for settlement of class actions in California. [Citation.] A two-step process is required. First, the court preliminarily approves the settlement and the class members are notified as directed by the court. [Citation.] ‘The notice must contain an explanation of the proposed settlement and procedures for class members to follow in filing written objections to it and in arranging to appear at the settlement hearing and state any objections to the proposed settlement.’ [Citation.] Second, the court conducts a final approval hearing to inquire into the fairness of the proposed settlement. [Citation.] If the court approves the settlement, a judgment is entered with provision for continued jurisdiction for the enforcement of the judgment. [Citation.]” (Cellphone Termination Fee Cases (2009) 180 Cal.App.4th 1110, 1118; see also Cal. Rules of Court, rule 3.769(c)-(f).)

The court may make an order approving or denying certification of a provisional settlement class after the preliminary settlement hearing.” (Cal. Rules of Court, rule 3.769(d).) “If the court grants preliminary approval, its order must include the time, date, and place of the final approval hearing; the notice to be given to the class; and any other matters deemed necessary for the proper conduct of a settlement hearing.” (Id., rule 3.769(e).)

(2)       Requirements of Class Certification for Purposes of Settlement

Code of Civil Procedure section 382 authorizes class actions “when the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court, one or more may sue or defend for the benefit of all.” (Code Civ. Proc., § 382.) “Class certification requires proof (1) of a sufficiently numerous, ascertainable class, (2) of a well-defined community of interest, and (3) that certification will provide substantial benefits to litigants and the courts, i.e., that proceeding as a class is superior to other methods. [Citation.]” (Fireside Bank v. Superior Court (2007) 40 Cal.4th 1069, 1089.)

To determine whether a class is ascertainable, the court examines “(1) the class definition, (2) the size of the class, and (3) the means available for identifying class members. [Citation.]” (Reyes v. San Diego County Bd. of Supervisors (1987) 196 Cal.App.3d 1263, 1271.) “A related inquiry is manageability of the proposed class[.]” (Global Minerals & Metals Corp. v. Superior Court (2003) 113 Cal.App.4th 836, 849.) “The community of interest requirement embodies three factors: (1) predominant common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class.” (Richmond v. Dart Industries, Inc. (1981) 29 Cal.3d 462, 470.)

(3)       Standards for Preliminary Evaluation of Fairness of Class Action Settlement

“Before final approval, the court must conduct an inquiry into the fairness of the proposed settlement.” (Cal. Rules of Court, rule 3.769.) “The trial court has broad discretion to determine whether the settlement is fair. [Citation.] It should consider relevant factors, such as the strength of plaintiffs’ case, the risk, expense, complexity and likely duration of further litigation, the risk of maintaining class action status through trial, the amount offered in settlement, the extent of discovery completed and the stage of the proceedings, the experience and views of counsel, the presence of a governmental participant, and the reaction of the class members to the proposed settlement. [Citation.] The list of factors is not exhaustive and should be tailored to each case. Due regard should be given to what is otherwise a private consensual agreement between the parties. The inquiry ‘must be limited to the extent necessary to reach a reasoned judgment that the agreement is not the product of fraud or overreaching by, or collusion between, the negotiating parties, and that the settlement, taken as a whole, is fair, reasonable and adequate to all concerned.’ ” (Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, 1801 (Dunk).)

“[A] a presumption of fairness exists where: (1) the settlement is reached through arm’s-length bargaining; (2) investigation and discovery are sufficient to allow counsel and the court to act intelligently; (3) counsel is experienced in similar litigation; and (4) the percentage of objectors is small.” (Dunk, supra, 48 Cal.App.4th at p. 1802.) The involvement of a mediator strongly weighs in favor of finding that the Settlement Agreement represents a non-collusive and arm’s-length agreement. (See Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 128-129.) “The court undoubtedly should give considerable weight to the competency and integrity of counsel and the involvement of a neutral mediator in assuring itself that a settlement agreement represents an arm’s length transaction entered without self-dealing or other potential misconduct.” (Id. at p. 129.)

(4)       Notice to Settlement Class Members

“If the court has certified the action as a class action, notice of the final approval hearing must be given to the class members in the manner specified by the court. The notice must contain an explanation of the proposed settlement and procedures for class members to follow in filing written objections to it and in arranging to appear at the settlement hearing and state any objections to the proposed settlement.” (Cal. Rules of Court, rule 3.769(f).)

“The content of the class notice is subject to court approval. If class members are to be given the right to request exclusion from the class, the notice must include the following: [¶] (1) A brief explanation of the case, including the basic contentions or denials of the parties; [¶] (2) A statement that the court will exclude the member from the class if the member so requests by a specified date; [¶] (3) A procedure for the member to follow in requesting exclusion from the class; [¶] (4) A statement that the judgment, whether favorable or not, will bind all members who do not request exclusion; and [¶] (5) A statement that any member who does not request exclusion may, if the member so desires, enter an appearance through counsel.” (Cal. Rules of Court, rule 3.766(d).)

“In determining the manner of the notice, the court must consider: [¶] (1) The interests of the class; [¶] (2) The type of relief requested; [¶] (3) The stake of the individual class members; [¶] (4) The cost of notifying class members; [¶] (5) The resources of the parties; [¶] (6) The possible prejudice to class members who do not receive notice; and [¶] (7) The res judicata effect on class members.” (Cal. Rules of Court, rule 3.766(e).)

(5)       Additional Information Pertaining to the Individual Settlement Payment

The Settlement Agreement has several monetary components including a gross settlement amount of $375,000, inclusive of attorney fees not to exceed $131,250, litigation costs not to exceed $30,000, an incentive award to Plaintiff not to exceed $10,000, settlement administration costs not to exceed $20,000, and PAGA payments of $50,000. (LaCour Decl., Ex. A at ¶¶ 11-15.) Plaintiff currently estimates that the net settlement amount to be distributed to participating settlement members is approximately $150,617.54. (LaCour Decl., ¶ 4.)

As the court understands the Settlement Agreement, Plaintiff receives an additional “Individual Settlement Payment” of $65,000 to settle Plaintiff’s individual FEHA and wrongful termination COAs in the Individual/PAGA Case (COA Nos. 8-11, 13). (LaCour Decl., Ex. A at ¶¶ 20, 24.) This additional Individual Settlement Payment was to be paid by Defendants by no later than August 6, 2025. (Ibid.) However, in the event the court does not grant final approval of the Settlement Agreement, this payment will be applied against any future judgment issued by the court, if any. (Ibid.) To the extent a future judgment does not exceed $65,000, then Plaintiff must repay that amount to Defendants within 30 days of written demand. (Ibid.)

According to paragraph 46 of the Settlement Agreement, Defendants will deduct the Individual Settlement Payment from the gross settlement amount that is ultimately funded if the Settlement Agreement is approved. (LaCour Decl., Ex. A at ¶ 46 [“Within thirty (30) days after the Settlement becomes Final, Defendants will wire the amounts necessary to fund the Maximum Settlement Amount less Plaintiff’s Individual Settlement Payment ….”].) If the Individual Settlement Payment is deducted from the amount that is ultimately funded pursuant to paragraph 46 of the Settlement Agreement, it appears this would further reduce the amount that is available to be distributed to participating members of the settlement class. (Ibid.) However, this further deduction does not appear to be accounted for in the estimated figures in provided in Plaintiff’s motion. (Motion, p. 8, ll. 5-16.) The court will require further clarification on this issue.

Moreover, pursuant to the Settlement Agreement, the proposed final order and judgment must include the court’s approval of Plaintiff’s Individual Settlement Payment, among other items. (LaCour Decl., Ex. A at ¶ 42 [“The proposed Final Order and Judgment will include, among other things: [¶] … [¶] Approval of Plaintiff’s Individual Settlement Payment ….”].) Because Plaintiff’s Individual Settlement Payment is part of the Settlement Agreement to be approved by the court, the court must evaluate it as part of the preliminary approval process.

The court will require Plaintiff to file and serve a supplemental memorandum containing the following information: (1) the parties’ position on whether the Individual Settlement Payment will be deducted from the gross settlement amount ultimately funded by Defendants, thereby reducing the amount available to distribute to participating members of the settlement class, (2) any additional settlement terms pertaining to the Individual Settlement Payment not described in the Settlement Agreement, (3) the status of the Individual Settlement Payment including whether it has been paid, (4) whether Plaintiff’s counsel is entitled to any portion of the Individual Settlement Payment as attorney fees or costs and, if so, a breakdown of the split between Plaintiff and counsel, (5) a detailed explanation as to why the Individual Settlement Payment is fair compensation to settle the individual claims to be resolved by the Individual Settlement Payment, (6) whether the Individual Settlement Payment impacts the adequacy of Plaintiff or her counsel as a representative of the putative settlement class, particularly if the Individual Settlement Payment is deducted from the gross settlement amount before funding, (6) if preliminary approval is granted, whether the Individual Settlement Payment must be described in the notice to the settlement class, (7) whether the Individual Settlement Payment should be severed from the class action and PAGA settlement; and (8) whether Plaintiff’s counsel may have a conflict of interest as to the Individual Settlement Payment if the Individual Settlement Payment is deducted from the gross settlement amount.

“The adequacy inquiry ... serves to uncover conflicts of interest between named parties and the class they seek to represent.… To assure ‘adequate’ representation, the class representative’s personal claim must not be inconsistent with the claims of other members of the class…. To resolve the adequacy question the court will evaluate the seriousness and extent of conflicts involved compared to the importance of issues uniting the class; the alternatives to class representation available; the procedures available to limit and prevent unfairness; and any other facts bearing on the fairness with which the absent class member is represented.” (Capitol People First v. State Dept. of Developmental Services (2007) 155 Cal.App.4th 676, 697, internal quotation marks omitted.)