Judge: Katherine Chilton, Case: 21NWLC33919, Date: 2023-05-09 Tentative Ruling

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Case Number: 21NWLC33919     Hearing Date: May 9, 2023    Dept: 25

PROCEEDINGS:      DEFENDANT’S MOTION FOR SUMMARY JUDGMENT

MOVING PARTY:    Plaintiff East Del Amo Pacific Homeowners Association, Inc.

RESP. PARTY:         Defendant State Farm Fire and Casualty Company

MOTION FOR SUMMARY JUDGMENT

CCP § 437c

TENTATIVE RULING:

Defendant’s motion for summary judgment is GRANTED.

SERVICE: 

[X] Proof of Service Timely Filed (CRC, rule 3.1300)                 [OK]

[X] Correct Address (CCP §§ 1013, 1013a)                                                 [OK]

[X] 16/21 Court Days Lapsed (CCP §§ 12c, 1005(b))                     [OK]

OPPOSITION:          Filed on February 1, 2023                      

REPLY:                     Filed on February 10, 2023                       

ANALYSIS:

I.                Background

On September 13, 2021, Plaintiff State Farm Fire and Casualty (“Plaintiff”) brought this action against Defendant East Del Amo Pacific Homeowners Association (“Defendant”) for money owed pursuant to an insurance policy issued by Plaintiff.

The Complaint alleges causes of action for (1) open book account, (2) account stated, (3) reasonable value of services rendered, and (4) unjust enrichment. Defendant filed an Answer on July 26, 2022.

On December 1, 2022, Defendant filed this Motion for Summary Judgment, or in the Alternative, Summary Adjudication. On February 1, 2023, Plaintiff filed an opposition, and on February 10, 2023, Defendant filed a reply.

II.              Legal Standard

A party seeking summary judgment has the burden of producing evidentiary facts sufficient to entitle him/her to judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c); Vesely v. Sager (1971) 5 Cal.3d 153.) The moving party must make an affirmative showing that he/she is entitled to judgment irrespective of whether or not the opposing party files an opposition. (Villa v. McFerren (1995) 35 Cal.App.4th 733.) 

When a Defendant or Cross-Defendant seeks summary judgment, he/she must show either (1) that one or more elements of the cause of action cannot be established; or (2) that there is a complete defense to that cause of action. (Code Civ. Proc., § 437c, subd. (p)(2).) When a Plaintiff or Cross-Complainant seeks summary judgment, he/she must produce admissible evidence on each element of each cause of action on which judgment is sought. (Code Civ. Proc., § 437c, subd. (p)(1).) The moving party’s “affidavits must cite evidentiary facts, not legal conclusions or ‘ultimate’ facts” and be strictly construed. (Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1519; Hayman v. Block (1986) 176 Cal.App.3d 629, 639.)  

The opposing party on a motion for summary judgment is under no evidentiary burden to produce rebuttal evidence until the moving party meets his or her initial movant’s burden. (Binder v. Aetna Life Insurance Company (1999) 75 Cal.App.4th 832.) Once the initial movant’s burden is met, then the burden shifts to the opposing party to show, with admissible evidence, that there is a triable issue requiring the weighing procedures of trial. (Code Civ. Proc., § 437c, subd. (p).) The opposing party may not simply rely on his/her allegations to show a triable issue but must present evidentiary facts that are substantial in nature and rise beyond mere speculation. (Sangster v. Paetkau (1998) 68 Cal.App.4th 151.) As to any alternative request for summary adjudication of issues, such alternative relief must be clearly set forth in the Notice of Motion and the general burden-shifting rules apply but the issues upon which summary adjudication may be sought are limited by statute. (Code Civ. Proc., § 437c, subd. (f)(1).) “A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” (Code Civ. Proc., § 437c, subd. (f)(1).) 

III.            Evidentiary Objections

Defendant’s evidentiary objections to Exhibits A and B to the Declaration of Ron Chow are sustained.

Defendant’s evidentiary objections to the Declaration of Tierra McCaster are overruled.

IV.           Discussion

The Complaint alleges that Defendant owes Plaintiff a sum of $18,878.00 for insurance policies issued. Defendant moves for summary judgment on the grounds that this amount of money was charged for independent contractors who are not eligible for workers compensation benefits under the policy.

A.    Undisputed/Disputed Facts

During the time period from about January 30, 2017 to January 30, 2019, Defendant was the insured party under two separate policies 92-EK-S761-4 and 92-EW-H549-0 (the “Policies”) for workers compensation insurance issued by Plaintiff. (UMF No. 1.) (The parties dispute the exact end date but the Court does not find this to be material for this motion.) Plaintiff audited Defendant under the policies and charged the Defendant for unpaid premiums. (UMF No. 2.) Plaintiff has admitted that the audit of Defendant under the policies “resulted in charging [Defendant] unpaid premiums in the sum of $18,878.00, the amount demanded in the Complaint, for coverage for independent contractors who were not employees of the [Defendant].”  (UMF No. 2.) Defendant does not have its own employees. (Id.)  Defendant has a direct contractual relationship with the independent contractors included in the audit. (UMF No. 4.)

B.    Pleadings

The pertinent portion of the complaint is that “in four years last past and on or about August 13, 2019, the defendant(s), and each of them, became indebted to plaintiff on an open book account, for a balance due for goods, wares and merchandise sold and/or services rendered in the sum of $18,878.00, policy number 92- EK-S761-4, from January 30, 2017 to January 30, 2018, and policy number 92-EW-H549-0, from January 30, 2018, to December 26, 2018.” (Complaint ¶ 4.)

This is repeated in the causes of action for open book account, account stated, reasonable value of services rendered, and unjust enrichment. (Complaint ¶¶ 4, 7, 9, 13.)

C.    Discussion

Defendant argues that each of the causes of action fails because neither the policies nor California law permit Plaintiff to charge premiums for independent contractors. It is undisputed that the balance owed is for unpaid premiums for independent contractors. (UMF No. 2.)

Defendant puts forward evidence of the language of the Policies that provides that Plaintiff will pay the “benefits required of [Plaintiff] by the workers compensation law.” (Heieck Decl., ¶ 4, Ex. 3, Part I(B).) The Policies do not explicitly require that Defendant provide workers’ compensation to independent contractors. (See id.) California Labor Code section 3700 requires that all California employers must provide workers’ compensation benefits to their employees, but makes no such requirement for independent contractors.

An independent contractor is not eligible for workers’ compensation. (Global Hawk Ins. Co. v. Le (2014) 225 Cal.App.4th 593, 604.) An independent contractor is a person “who renders service for a specified recompense for a specified result, under the control of a principal as to the result of the work only, and not as to the means by which the result is accomplished.” (Lab. Code § 3353.)

As noted above, it is undisputed that the amount owed is for coverage of independent contractors who were not employees of Defendant. (UMF No. 2; Heieck Decl., ¶ 2 Ex. 1-2 [RFA No. 5].) Defendant puts forward evidence that it has no employees, and that the independent contractors were free from the control and direction of the Association. (Anderson Decl., ¶ 6, 11 Ex. 1.) Plaintiff does not dispute the fact that the premiums were charged for these “independent contractors” who are not employees of Defendant.  

Plaintiff cites the insurance declaration at page 5 which states that a “Certificate of Insurance for Workers’ Compensation coverage needs to be obtained annually for every subcontractor you hire. . . .  If certificates are not obtained the subcontractor and their employees may be considered as your employees for premium calculation.”  (Opp. At p. 6; Heieck Decl., Ex. 3; Chow Decl., Ex. 1.)  But Plaintiff has not cited any language to support its contention that independent contractors are treated the same way nor has it submitted evidence that these were subcontractors and not independent contractors. 

            The Court finds that it is undisputed that the contractors for which Plaintiff seeks to recover premiums were independent contractors and not employees or subcontractors.  Accordingly, the Court grants Defendant’s motion for summary judgment as to Count 1 - Open Book Account, Count 2 - Account Stated, and Count 3 – Reasonable Value for Services Rendered.  The Court further grants the motion for summary judgment as to Count 4 for Unjust Enrichment on the grounds that such a claim does not lie where the parties have an enforceable express contract. 

V.             Conclusion & Order

Defendant’s motion for summary judgment is GRANTED.

Moving party is ordered to give notice.