Cortina v. North American Title Co. (2026) — Cal.App.5th —, F085389
Key Takeaway: A California appeals court erased a $75 million judgment won by roughly 400 escrow workers who proved they were misclassified as exempt and denied overtime pay. The reversal turned on procedural errors and a flawed trial plan — not on the merits of the workers’ misclassification claims. The decision is a warning about how these cases must be tried, not whether they can be won.
What Happened in Cortina v. North American Title
A class of roughly 400 California escrow employees spent nearly two decades proving they were denied overtime pay. They won at trial. They watched the award grow to almost $75 million. On May 29, 2026, the Fifth District Court of Appeal reversed every dollar of it and sent the case back to where it started.
The plaintiffs worked in escrow services for North American Title Company, now Lennar Title Company, a subsidiary of homebuilder Lennar Corporation. They alleged the company had misclassified them as exempt from California’s overtime laws — labeling them salaried professionals exempt from premium pay while assigning them work that, in their telling, was anything but exempt. The claim is one of the most common in California wage-and-hour litigation, and the stakes for the workers were straightforward: years of overtime hours, worked and never paid.
The case was filed in 2007. After a 41-day bench trial in 2016, a Fresno Superior Court judge split the workers into two classes and found the company liable on the claims of the “Exempt” class. The court then did something the Court of Appeal would later call unprecedented. Over the company’s objection, it appointed a referee to run the second phase of trial — the phase that would determine how much overtime each worker was owed — and ordered the company to pay for the entire process. The referee spent close to three years hearing testimony from more than 200 witnesses and concluded the plaintiffs were owed more than $21 million in restitution. With prejudgment and post-judgment interest and a $14 million attorney fee award, the judgment swelled to nearly $75 million.
It did not survive. Justice Rosendo Peña Jr., writing for the panel in a 138-page partially published opinion, reversed on two independent grounds. The first was procedural and, the court said, dispositive on its own. A trial court’s power to delegate matters to a referee without the parties’ consent is strictly limited by statute, and the court found no authorization for what happened here. Sending the entire damages phase to a referee over a party’s objection, the panel wrote, was “entirely unauthorized.” That error alone compelled reversal.
The second ground reached the merits of how the class was tried. The court held that the trial plan violated the rules the California Supreme Court laid down in Duran v. U.S. Bank National Assn. (2014) 59 Cal.4th 1 — the leading authority on how a misclassification class can, and cannot, be proven at trial. The panel did not soften the comparison: nineteen years in, it wrote, “the end is still nowhere in sight.”
How California Overtime Exemption Law Works
California overtime law, codified at Labor Code section 510, entitles most employees to premium pay for hours worked beyond eight in a day or forty in a week. Certain administrative, executive, and professional employees are exempt — but the exemption turns on what the employee actually does, not their job title or salary status. The test is quantitative. An employee who spends 49 percent of their time on exempt managerial work but 51 percent on nonexempt tasks does not qualify for the exemption. That granularity is what makes misclassification cases hard to try as a class: liability can hinge on how each worker spent the workday.
Duran governs that problem. A class plaintiff may rely on representative evidence and statistical sampling, but only if the trial plan is workable and the sampling is scientifically valid. When it is not, Duran is unambiguous: decertification must be ordered whenever a trial plan proves unworkable. A trial court cannot find an employer liable across hundreds of workers on a sample that does not reliably represent the class, and it cannot bar the employer from presenting its affirmative defenses. The Cortina trial, the panel concluded, did both.
How to Know If You Were Misclassified as Exempt in California
Overtime misclassification happens when an employer labels you “exempt” — and pays you a salary with no overtime — even though your actual job duties don’t qualify for an exemption. You may have been misclassified if:
- You were paid a salary and told you were “exempt,” but you spent most of your time on routine, non-managerial tasks rather than exercising independent judgment or supervising other employees.
- You regularly worked more than eight hours in a day or forty hours in a week and were never paid overtime.
- Your employer classified everyone in your role as exempt without evaluating what each person actually did day to day.
- You performed the same work as hourly coworkers but were classified differently.
- Your job title sounded managerial — “coordinator,” “senior associate,” “officer” — but your daily responsibilities did not match.
Misclassification is not always obvious. Many employees do not realize they were entitled to overtime until they learn how California law defines exempt work. If any of the above sounds familiar, it may be worth having your situation reviewed.
What This Means for Misclassified California Employees
This is a defense victory, and an honest reading does not pretend otherwise. But the lesson for California workers and the lawyers who represent them is not that misclassification claims fail. It is that they have to be built to last.
A class judgment is only as durable as the trial plan beneath it. When a court takes procedural shortcuts — delegating a damages trial to a referee no one agreed to, or foreclosing an employer’s defenses on a record that cannot support classwide proof — the resulting award is exposed on appeal, and the workers are the ones who wait. Hundreds of escrow employees have now spent nineteen years in court and hold nothing final to show for it.
The decision will be cited for years. Appellate opinions decertifying a wage-and-hour class after a full trial are rare, and Cortina’s exhaustive treatment of certification, manageability, and the Duran framework makes it a reference point for both sides of every overtime misclassification case that follows. For plaintiffs, the takeaway is to demand a trial plan that can withstand Duran from the first day of the case, not the last.
Talk to an Overtime Misclassification Attorney
If you are a California employee who was classified as exempt and denied overtime pay, King & Siegel LLP can evaluate your situation. The firm represents employees in overtime and wage-and-hour claims, including individual misclassification cases and class actions. Consultations are free and confidential.
Julian Burns King graduated with honors from Harvard Law School and founded King & Siegel in 2018. As head of the Firm’s discrimination and harassment practice areas, she champions the rights of working parents and victims of workplace discrimination and harassment. She has been recognized as a “Rising Star” by Super Lawyers annually since 2018 and has recovered tens of millions of dollars on behalf of her clients.