ARONSON, J. —
Plaintiff and appellant Rachel Verdugo appeals from an order granting a motion to stay this wage and hour lawsuit based on a forum selection clause in her employment agreement with defendant and respondent Alliantgroup, L.P. (Alliantgroup). The clause designates Harris County, Texas, as the exclusive forum for any dispute arising out of Verdugo's employment, and also includes a provision designating Texas law as governing all disputes. Verdugo contends the trial court erred because enforcing the forum selection clause and related choice-of-law clause violates California's public policy on employee compensation. We agree and reverse the trial court's order.
Although a party opposing enforcement of a forum selection clause ordinarily bears the burden to show enforcement would be unreasonable or unfair, the burden is reversed when the underlying claims are based on statutory rights the Legislature has declared to be unwaivable. In that instance, the party seeking to enforce the forum selection clause has the burden to show enforcement would not diminish unwaivable California
Here, Verdugo bases all her claims on Labor Code provisions that not only establish when and how employers must pay overtime and other forms of compensation, provide meal and rest breaks, and provide accurate wage statements to all California employees, but also establish specific remedies for an employer's violation of these provisions, including recovery of unpaid wages, interest, civil penalties, and attorney fees. To protect these important rights and remedies, the Labor Code declares they cannot be waived by agreement.
Alliantgroup failed to show enforcing the forum selection clause and related choice-of-law clause in Verdugo's employment agreement would not diminish her statutory rights by requiring her to litigate her claims in Texas under Texas law. Alliantgroup contends Verdugo's statutory rights would not be affected by enforcing the forum selection clause because a Texas court "most likely" would reject the parties' choice-of-law clause and apply California law. Alliantgroup's supposition about what a Texas court is likely to do is not sufficient to meet its burden because Alliantgroup's arguments on appeal suggest it will argue against applying California law if this case is litigated in Texas, and Alliantgroup has not cited any authority that convinces us a Texas court necessarily will apply California law.
The few cases Alliantgroup cites do not address how a Texas court will view a choice-of-law clause in the context of a wage and hour dispute between a Texas employer and a California employee, and Alliantgroup fails to address the competing policies of these two states. Alliantgroup could have eliminated any doubt about which law would apply to Verdugo's claims by stipulating to have the Texas courts apply California law, but failed to do so. Instead, Alliantgroup carefully phrased its arguments in terms of vague possibilities while simultaneously seeking to minimize the significance of the California statutory rights on which Verdugo bases her claims. Alliantgroup therefore has not shown Verdugo's unwaivable statutory rights will not be diminished.
Alliantgroup provides specialty tax consulting services to businesses throughout the United States. Its corporate headquarters are located in Harris County, Texas, and it has regional offices in 11 states, including California. In October 2007, Alliantgroup hired Verdugo to work as an "Associate Director"
When Alliantgroup hired her, Verdugo signed an "Employment Agreement" that included a combined forum selection and choice-of-law clause stating, "Choice of Law/Jurisdiction/Venue: This Agreement shall be governed in all respects, including, but not limited to, validity, interpretation, effect and performance by the laws of the State of Texas. The parties agree that proper subject matter and personal jurisdiction shall be had solely in [the] State of Texas. The sole venue for disputes arising hereunder shall be in Harris County, Texas." (Italics, underscoring, and boldface omitted.)
In April 2013, Verdugo brought a class action lawsuit alleging the following claims on behalf of all similarly situated past and present employees of Alliantgroup: (1) unpaid overtime wages under Labor Code section 1194;
Alliantgroup moved to dismiss or stay the action based on the forum selection clause in the Employment Agreement. The trial court granted the motion and stayed this action based on its finding the forum selection clause was enforceable. Verdugo timely appealed.
A mandatory forum selection clause such as the one included in Verdugo's Employment Agreement is generally given effect unless enforcement would be unreasonable or unfair. (Animal Film, LLC v. D.E.J. Productions, Inc. (2011) 193 Cal.App.4th 466, 471 [123 Cal.Rptr.3d 72] (Animal Film); Berg v. MTC Electronics Technologies Co. (1998) 61 Cal.App.4th 349, 358 [71 Cal.Rptr.2d 523] (Berg).) "`"Mere inconvenience or additional expense is not the test of unreasonableness ..."' of a mandatory forum selection clause. [Citation.]" (Berg, at p. 359.) A clause is reasonable if it has a logical connection with at least one of the parties or their transaction.
Nonetheless, "California courts will refuse to defer to the selected forum if to do so would substantially diminish the rights of California residents in a way that violates our state's public policy." (America Online, supra, 90 Cal.App.4th at p. 12; see Intershop Communications AG v. Superior Court (2002) 104 Cal.App.4th 191, 200 [127 Cal.Rptr.2d 847] (Intershop Communications) ["a forum selection clause will not be enforced if to do so would bring about a result contrary to the public policy of this state"]; CQL Products, supra, 39 Cal.App.4th at p. 1354; Hall v. Superior Court (1983) 150 Cal.App.3d 411, 416-418 [197 Cal.Rptr. 757] (Hall).)
Although the parties both contend we should review the trial court's decision to enforce the Employment Agreement's forum selection clause under the substantial evidence standard, we conclude abuse of discretion is the governing standard of review. To support their contention, the parties cite Cal-State Business Products & Services, Inc. v. Ricoh (1993) 12 Cal.App.4th 1666 [16 Cal.Rptr.2d 417] (Cal-State), which applied the substantial evidence standard based on the following explanation: "[I]n a contractual forum non conveniens motion, the trial court must determine if there is sufficient evidence to satisfy the requirements for invalidating a binding contract. If the trial court finds there are facts present which satisfy these criteria, it must act in a particular way; there is no discretion involved. The reviewing court is thus involved in determining the quantum of evidence adduced, not the manner in which factors were applied." (Id. at p. 1681, original italics; see CQL Products, supra, 39 Cal.App.4th at p. 1354.)
The Cal-State decision represents the minority view and has been criticized as inconsistent with Supreme Court authority: "[G]iven existing guidance on this question from our Supreme Court, and the more consistent line of Court of Appeal decisions, which likewise apply the abuse of discretion standard, we disagree with Cal-State's conclusion that the substantial evidence standard applies instead." (America Online, supra, 90 Cal.App.4th at p. 9; see Smith, Valentino & Smith, Inc. v. Superior Court (1976) 17 Cal.3d 491, 496 [131 Cal.Rptr. 374, 551 P.2d 1206] ["we conclude that forum selection clauses are valid and may be given effect, in the court's discretion and in the absence of a showing that enforcement of such a clause would be unreasonable" (italics added)].) We join the majority of cases and apply the abuse of discretion standard of review. (See, e.g., Trident Labs, Inc. v. Merrill Lynch Commercial Finance Corp. (2011) 200 Cal.App.4th 147, 154 & fn. 3 [132 Cal.Rptr.3d 551]; Schlessinger v. Holland America (2004) 120 Cal.App.4th 552, 557 [16 Cal.Rptr.3d 5]; Intershop Communications, supra, 104 Cal.App.4th at pp. 198-199; Bancomer, S. A. v. Superior Court (1996) 44 Cal.App.4th 1450, 1457 & fn. 7 [52 Cal.Rptr.2d 435].)
Verdugo contends Alliantgroup bore the burden to show that litigating her claims in Texas would not diminish unwaivable rights the Labor Code
In Wimsatt, this court first addressed which party bears the burden of proof on a motion to enforce a mandatory forum selection clause when the claims at issue are based on unwaivable statutory rights. The plaintiffs were franchisees who sued their franchisor under California's Franchise Investment Law (Corp. Code, § 31000 et seq.; Franchise Investment Law), which the Legislature enacted to protect California franchisees. (Wimsatt, supra, 32 Cal.App.4th at p. 1513.) The plaintiffs alleged the defendant violated the Franchise Investment Law by making numerous misrepresentations to induce them to purchase a franchise. Based on a forum selection clause in the parties' franchise agreement, the trial court dismissed the plaintiffs' action. (Wimsatt, at pp. 1514-1516.) On appeal, a panel of this court acknowledged the party opposing enforcement of a mandatory forum selection clause ordinarily bears a heavy burden to show enforcement would be unreasonable or unjust, but we nonetheless concluded the burden must be reversed when unwaivable statutory rights are involved because a forum selection clause otherwise could be used to circumvent those unwaivable rights. (Id. at pp. 1519-1520.)
Wimsatt explained, "One of the most important protections California offers its franchisee citizens is an antiwaiver statute which voids any provision in a franchise agreement which waives any of the other protections afforded by the Franchise Investment Law. [Citation.] A forum selection clause, however, carries the potential to contravene this statute by placing litigation in a forum in which there is no guaranty that California's franchise laws will be applied to a franchisee's claims.... If a forum selection clause places in-state franchisees in an out-of-state forum which uses some balancing test (or equivalent) to determine that the law of the out-of-state forum should be used in place of California's, then a forum selection clause in a franchise agreement will have effectively circumvented California's antiwaiver statute.... [¶] ... [¶] Given California's inability to guarantee application of its Franchise Investment Law in the contract forum, its courts must necessarily do the next best thing. In determining the `validity and enforceability' of forum selection provisions in franchise agreements, its courts must put the burden on the franchisor to show that litigation in the contract forum will not diminish in any way the substantive rights afforded California franchisees under California law." (Wimsatt, supra, 32 Cal.App.4th at pp. 1520-1522, fn. omitted.)
In America Online, the Court of Appeal applied Wimsatt's rationale for reversing the burden of proof to claims under the Consumers Legal Remedies Act (Civ. Code, § 1750 et seq.; CLRA) because the CLRA included an antiwaiver provision. There, the plaintiffs brought a class action alleging their
The America Online court explained both the Franchise Investment Law and the CLRA share the common purpose of protecting California residents from unfair or deceptive business practices, and include a provision invalidating any waiver of the protections those laws provide. (America Online, supra, 90 Cal.App.4th at p. 11.) Accordingly, to prevent California consumers from potentially losing the CLRA's unwaivable rights, the America Online court concluded the burden rests on the defendant "to prove that enforcement of the forum selection clause would not result in a significant diminution of rights to California consumers." (America Online, at p. 10.)
Here, all of Verdugo's claims are based on her statutory rights under the Labor Code. She alleges her first six causes of action directly under the Labor Code, seeking unpaid wages, statutory penalties, interest, and attorneys fees based on Alliantgroup's failure to provide overtime compensation, accurate wage statements, meal breaks, outstanding wages upon termination, earned commissions, and vacation pay. (§§ 200-204, 226, 226.7, 227.3, 1194.) Verdugo's seventh and eighth causes of action seek restitution under Business and Professions Code section 17200 et seq. and civil penalties under the PAGA based on the same Labor Code violations alleged in the first six causes of action.
Like the clauses at issue in Wimsatt and America Online, the Employment Agreement's forum selection clause has the potential to contravene an antiwaiver statute designed to protect California residents from business practices that do not meet Labor Code standards. If enforced, the forum selection clause would require Verdugo to litigate her Labor Code wage claims in Texas, where the Employment Agreement's choice-of-law clause would require the court to apply Texas law unless a Texas court decides not to enforce the choice-of-law clause. Accordingly, to prevent the forum selection clause from operating as a waiver of Verdugo's unwaivable Labor Code rights, Wimsatt and America Online place the burden on Alliantgroup to show enforcing the forum selection clause will not diminish Verdugo's substantive rights in any way.
Alliantgroup contends Wimsatt and America Online do not apply here because those cases did not involve an employment agreement or Labor Code claims. The specific claims involved in those cases, however, are irrelevant to our analysis. The decisions in Wimsatt and America Online were based on statutes the Legislature enacted and specifically made unwaivable to protect California residents. (America Online, supra, 90 Cal.App.4th at pp. 10-11; Wimsatt, supra, 32 Cal.App.4th at pp. 1520-1522.) Verdugo's claims also are based on statutory rights the Legislature has declared unwaivable, and therefore the analysis of Wimsatt and America Online applies with equal force here.
Alliantgroup points out the antiwaiver provisions of the Franchise Investment Law and the CLRA specifically state any "waiver" (Civ. Code, § 1751) or attempt to "waive" the protections of those laws is "void" (Corp. Code, § 31512), but Labor Code sections 219 and 1194 do not expressly prohibit a "waiver" or declare any kind of agreement "void" (§§ 219, subd. (a), 1194, subd. (a)). According to Alliantgroup, the Labor Code rights on which Verdugo bases her claims do not rise to the level of the Franchise Investment Law and CLRA rights at issue in Wimsatt and America Online because the
Alliantgroup also contends Wimsatt and America Online do not apply because Verdugo did not expressly agree to waive her rights under the Labor Code; she merely agreed to litigate her claims in Texas. Again, Alliantgroup misses the point. Wimsatt and America Online also involved contractual provisions that designated an exclusive forum for litigation without an express waiver of the rights under the Franchise Investment Law or the CLRA. Those courts nonetheless found the burden of proof rested on the party seeking to enforce the forum selection clause because the clause operated as a waiver of California statutory rights if the court in the designated forum did not apply California law and the law in the forum did not provide equivalent rights. (America Online, supra, 90 Cal.App.4th at p. 5 ["Enforcement of the contractual forum selection and choice of law clauses would be the functional equivalent of a contractual waiver of the consumer protections under the CLRA...." (italics added)]; Wimsatt, supra, 32 Cal.App.4th at p. 1522 [forum selection clause would be "effective equivalent" of a waiver].) Here, the forum selection clause has the potential to operate as a waiver, and therefore Alliantgroup bears the burden to show it does not.
According to Alliantgroup, Intershop Communications supports its contention the rationale of Wimsatt and America Online does not apply to Labor Code claims. Alliantgroup misinterprets that case. Intershop Communications involved an employee's claim against his former employer for breaching a stock options exchange agreement that included a forum selection clause designating Germany as the exclusive forum for any litigation relating to the agreement. (Intershop Communications, supra, 104 Cal.App.4th at p. 195.) The employee argued section 219 precluded the employer from enforcing the forum selection clause because the stock shares at issue were essentially unpaid wages. The Intershop Communications court rejected that contention because the employee did not allege any claims under the Labor Code and failed to explain how the stock options exchange agreement potentially
Finally, Alliantgroup contends Olinick v. BMG Entertainment (2006) 138 Cal.App.4th 1286 [42 Cal.Rptr.3d 268] (Olinick) shows a forum selection clause may be applied to unwaivable statutory claims arising out of the employer-employee relationship. In Olinick, a corporate executive and his attorney negotiated an employment contract with his employer that included a forum selection clause. The executive later sought to avoid the clause when his employment was terminated and he sued for unlawful discrimination under the California Fair Employment and Housing Act (Gov. Code, § 12900 et seq.; FEHA). (Olinick, supra, 138 Cal.App.4th at pp. 1290-1292.) The Court of Appeal upheld the trial court's decision to enforce the forum selection clause because the court found the designated forum provided the executive an adequate remedy for his discrimination claims, and therefore the forum selection clause was not contrary to California's public policy. (Id. at pp. 1301-1304.) In reaching this conclusion, the Olinick court emphasized the FEHA lacked an antiwaiver provision, but then paradoxically noted case law has recognized an employee's FEHA rights are unwaivable. (Olinick, at pp. 1304-1305.)
Verdugo contends the forum selection clause cannot be enforced because Alliantgroup failed to show enforcement would not diminish her unwaivable statutory rights. Thus, according to Verdugo, the forum selection clause is unenforceable as against public policy because it purports to waive the unwaivable wage and hour protections the Labor Code provides to all California employees. We agree.
In Hall, this court first addressed whether a forum selection clause was unenforceable as against public policy. The plaintiffs were two California investors who purchased shares in a corporation and later sued the corporation for violating California's Corporate Securities Law of 1968 (Corp. Code, § 25000 et seq.; Securities Law). The corporation moved to stay or dismiss the action based on a forum selection clause and a choice-of-law clause designating Nevada and its laws. The trial court granted the motion, but the Court of Appeal reversed because enforcing the clauses would violate the public policy embodied in the Securities Law. (Hall, supra, 150 Cal.App.3d at pp. 413-415.)
The Hall court began its analysis by noting the validity of the forum selection clause was "inextricably bound up" in the validity of the related choice-of-law clause because both affected the ability of California investors to invoke the Securities Law's protections (Hall, supra, 150 Cal.App.3d at p. 416), and neither clause could be enforced if doing so "`would violate a strong California public policy ... [or] "result in an evasion of ... a statute of the forum protecting its citizens"'" (id. at p. 417). The Hall court determined the Legislature articulated a strong public policy aimed at protecting the public from fraud and deception in securities transactions by regulating those transactions and providing statutory remedies under the Securities Law. The "cornerstone" of these regulations is an antiwaiver provision that voids "`[a]ny condition, stipulation or provision purporting to bind any person acquiring any security to waive compliance with any provision of this law.'" (Hall, at p. 417.)
Noting no published decision had addressed the Securities Law's antiwaiver provision, the Hall court relied on a United States Supreme Court decision that held a similar antiwaiver provision in a federal securities law prevented enforcement of an arbitration agreement. (Hall, supra, 150 Cal.App.3d at p. 418, citing Wilko v. Swan (1953) 346 U.S. 427, 434-435
By analogy, the Hall court concluded the choice-of-law clause requiring the California plaintiffs to litigate their Securities Law claims under Nevada law violated the Securities Law's antiwaiver provision and thereby rendered the related forum selection clause unenforceable: "Similarly, we believe the right of a buyer of securities in California to have California law and its concomitant nuances apply to any future dispute arising out of the transaction is a `provision' within the meaning of [the antiwaiver statute] which cannot be waived or evaded by stipulation of the parties to a securities transaction." (Hall, supra, 150 Cal.App.3d at p. 418.) In reaching this conclusion, the Hall court did not conduct a comparative analysis of California's and Nevada's laws because any contractual provision requiring application of another state's laws necessarily violated the Securities Law's antiwaiver provision. (Hall, at pp. 418-419.)
In America Online, the Court of Appeal applied Hall and affirmed the trial court's decision refusing to enforce a forum selection clause and related choice-of-law clause because enforcement would violate the California public policy embodied in the CLRA and its antiwaiver provision. (America Online, supra, 90 Cal.App.4th at p. 13.) The America Online court explained, "The CLRA parallels the Corporate Securities Law of 1968, at issue in Hall, insofar as the [CLRA] is a legislative embodiment of a desire to protect California consumers and furthers a strong public policy of this state.... [¶] ... Therefore, by parity of reasoning, enforcement of AOL's forum selection clause, which is also accompanied by a choice of law provision favoring Virginia, would necessitate a waiver of the statutory remedies of the CLRA, in violation of that law's antiwaiver provision [citation] and California public policy." (America Online, at pp. 14-15.)
Like the Hall court, the America Online court explained it was unnecessary to conduct a comparative analysis of California and Virginia law to determine whether they provided consumers materially different protections because enforcing the clauses would "inevitab[ly] ... eliminate" the specific protections the California Legislature enacted and made unwaivable. (America
Hall was decided 12 years before Wimsatt first recognized an exception to the ordinary burden of proof on a motion to enforce a mandatory forum selection clause (see Wimsatt, supra, 32 Cal.App.4th 1511; Hall, supra, 150 Cal.App.3d 411), and therefore Hall did not consider whether placing the burden on the defendant to show the plaintiff's rights will not be diminished would require a comparison of the two forums' laws. (See Anderson, supra, 232 Cal.App.4th at p. 1275 [opinion is not authority for proposition it did not consider].) America Online was decided after Wimsatt and extended its exception to claims under the CLRA, but America Online did not address how a defendant could show enforcing a forum selection clause would not diminish a plaintiff's unwaivable statutory rights. Moreover, although America Online stated no comparative analysis of the two forums' laws was required, it nonetheless conducted an extensive comparison of California and Virginia law to "reinforce[]" its conclusion enforcing the forum selection clause would diminish the plaintiffs' statutory rights. (America Online, supra, 90 Cal.App.4th at pp. 15-18.) Accordingly, we conclude Alliantgroup may rely on a comparison of California and Texas law to meet its burden to show
Toward that end, Alliantgroup contends enforcing the forum selection clause will not diminish Verdugo's statutory rights because, "[u]nder Texas'[s] choice of law doctrine, a Texas court would most likely apply California law to Verdugo's claims notwithstanding the [Employment Agreement's] choice of law provision." (Italics added.) According to Alliantgroup, enforcing the forum selection clause would not violate the Labor Code's antiwaiver provisions if Texas's choice-of-law doctrine required the Texas court to apply California law. This conclusory speculation, however, does not satisfy Alliantgroup's burden of proof. As explained above, Alliantgroup must show enforcing the forum selection clause "will not diminish in any way" Verdugo's statutory rights. (Wimsatt, supra, 32 Cal.App.4th at p. 1522, italics added; see America Online, supra, 90 Cal.App.4th at pp. 10-11.) Although Alliantgroup postulates about what a Texas court is "likely" to do, it carefully avoids making any specific and definitive argument that Texas courts either have applied or will apply California wage and hour laws despite a choice-of-law clause designating Texas law.
Alliantgroup could have eliminated any uncertainty on which law a Texas court would apply by stipulating to have a Texas court apply California law in deciding Verdugo's claims, but Alliantgroup failed to do so. Instead, Alliantgroup has carefully preserved its ability to argue to a Texas court that it should apply Texas law, and Alliantgroup has hinted at its intention to do so by seeking to downplay the significance of the statutory rights Verdugo seeks to enforce through this action. As explained above, Alliantgroup has argued the Labor Code provisions on which Verdugo bases her claims are not as significant as the Securities Law and CLRA provisions at issue in Wimsatt and America Online, and therefore are not entitled to the same protections. Nothing prevents Alliantgroup from making that same argument in Texas.
This court confronted a similar situation in Hall. There, the defendant argued the possibility a Nevada court would apply California law rendered the forum selection clause enforceable, but we rejected that argument because the defendant had previously argued Nevada law should be applied and the defendant declined the opportunity to eliminate any doubt by refusing to stipulate that California law applied. We also noted Nevada law included an antiwaiver provision comparable to California's that would have rendered any stipulation by the parties to apply California law unenforceable in a Nevada court. (Hall, supra, 150 Cal.App.3d at pp. 418-419.) Although a stipulation to apply California law may have been ineffective because of Nevada's antiwaiver provision, that is not the case here. Texas law does not include an antiwaiver provision that would prevent the parties from preserving Verdugo's unwaivable Labor Code rights by stipulating to have a Texas court apply
To support its contention a Texas court "would most likely" reject the parties' choice-of-law clause and apply California law, Alliantgroup cites a Texas Supreme Court case establishing a three-part test for determining whether to enforce a choice-of-law clause. (See DeSantis v. Wackenhut Corp. (Tex. 1990) 793 S.W.2d 670, 677-678 (DeSantis).) That test examines and compares the significance of each state's relationship to the parties and their transaction, each state's interest in having its laws applied to the parties' dispute, and the impact applying one state's laws would have on any fundamental policy underlying the other state's laws.
Alliantgroup also contends the forum selection clause may be enforced even if a Texas court refuses to apply California law because Texas law provides Verdugo with "adequate" remedies. That contention fails for two reasons. First, the question is whether enforcing the forum selection clause would diminish Verdugo's unwaivable rights under the Labor Code, not whether Texas law provides "adequate" remedies. (Wimsatt, supra, 32 Cal.App.4th at p. 1522; see America Online, supra, 90 Cal.App.4th at pp. 10-11.) Alliantgroup cites Olinick to support its contention adequacy of the remedies is the proper standard. As explained above, however, Olinick did not address Wimsatt or America Online and did not decide which party bears the burden of proof on a motion to enforce a forum selection clause when unwaivable statutory rights are at issue.
Second, Alliantgroup fails to show the remedies Texas law provides are "adequate," let alone that enforcing the forum selection clause would not diminish Verdugo's rights. According to Alliantgroup, Verdugo's rights are
Finally, at oral argument, Alliantgroup argued we should affirm the trial court's ruling because the court stayed rather than dismissed the action, and therefore the trial court retains jurisdiction to lift the stay and proceed with the action if the Texas court refuses to apply California law. According to Alliantgroup, the ability to resume the action if "something goes awry" is the reason California trial courts generally are required to stay rather than dismiss an action when ordering parties to litigate their dispute in a foreign jurisdiction under the forum non conveniens doctrine. Alliantgroup, however, overstates a trial court's authority to resume an action after staying it on forum non conveniens grounds.
In the forum non conveniens context, a forum is unsuitable only if it lacks jurisdiction or its statute of limitations bars the action. "It bears emphasis that `[i]t is sufficient that the action can be brought, although not necessarily won, in the suitable alternative forum.' [Citations.] That the law is less favorable to the plaintiffs in the alternative forum, or that recovery would be more difficult if not impossible, is irrelevant to the determination whether the forum is suitable unless `the alternative forum provides no remedy at all.' [Citations.]" (Guimei v. General Electric Co. (2009) 172 Cal.App.4th 689, 696 [91 Cal.Rptr.3d 178]; see Stangvik v. Shiley Inc. (1991) 54 Cal.3d 744, 764 [1 Cal.Rptr.2d 556, 819 P.2d 14].)
The order is reversed. Verdugo shall recover her costs on appeal.
O'Leary, P. J., and Ikola, J., concurred.
