Judge: Peter A. Hernandez, Case: 23STCV22402, Date: 2024-12-19 Tentative Ruling

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Case Number: 23STCV22402    Hearing Date: December 19, 2024    Dept: 34

Defendant Walton/Isaacson LLC’s Motion for Summary Judgment is GRANTED.  

Background

            On September 15, 2023, Plaintiff Lamon Archey (“Plaintiff”) filed a complaint against Defendants Mad Active Productions LLP, Walton/Isaacson LLC, and Does 1-50 for nonpayment of wages and waiting time penalties under Labor Code section 203.

            On November 9, 2023, Defendant Walton/Isaacson, LLC (“WI”) filed an answer and a cross-complaint against Cross-Defendant Sasha Bogie Inc., dba NTA Model Management (“NTA”) for indemnification.

            On December 1, 2023, Defendant Mad Active Productions LLP (“MP”) filed an answer.

            On December 26, 2023, NTA filed an answer to WI’s cross-complaint.

            On October 1, 2024, WI filed this Motion for Summary Judgment. On December 5, 2024, Plaintiff filed an opposition. A reply was filed on December 13, 2024.

            On December 13, 2024, Plaintiff filed a Request for Dismissal of Plaintiff’s claims against MP.

Legal Standard

“A party may move for summary judgment in an action or proceeding if it is contended that the action has no merit or that there is no defense to the action or proceeding. The motion may be made at any time after 60 days have elapsed since the general appearance in the action or proceeding of each party against whom the motion is directed or at any earlier time after the general appearance that the court, with or without notice and upon good cause shown, may direct.” (Code Civ. Proc., § 437c, subd. (1)(a).)

“[T]he party moving for summary judgment bears the burden of persuasion that there is no triable issue of fact and that he is entitled to judgment as a matter of law. That is because of the general principle that a party who seeks a court’s action in his favor bears the burden of persuasion thereon. There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.” (Aguilar v. Atl. Richfield Co. (2001) 25 Cal.4th 826, 850, citation omitted.)

“[T]he party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact.” (Aguilar, supra, at p. 850; Smith v. Wells Fargo Bank, N.A. (2005) 135 Cal.App.4th 1463, 1474, [applying the summary judgment standards in Aguilar to motions for summary adjudication].)

“On a summary judgment motion, the court must therefore consider what inferences favoring the opposing party a factfinder could reasonably draw from the evidence. While viewing the evidence in this manner, the court must bear in mind that its primary function is to identify issues rather than to determine issues. Only when the inferences are indisputable may the court decide the issues as a matter of law. If the evidence is in conflict, the factual issues must be resolved by trial.” (Binder v. Aetna Life Ins. Co. (1999) 75 Cal.App.4th 832, 839, citation omitted.)

“The trial court may not weigh the evidence in the manner of a fact finder to determine whose version is more likely true. Nor may the trial court grant summary judgment based on the court's evaluation of credibility.” (Binder, supra, at p. 840, citations omitted; see also Weiss v. People ex rel. Dep’t of Transp. (2020) 9 Cal.5th 840, 864 [“Courts deciding motions for summary judgment or summary adjudication may not weigh the evidence but must instead view it in the light most favorable to the opposing party and draw all reasonable inferences in favor of that party”].)

Discussion

Evidentiary Objections

The court declines to rule on Plaintiff’s evidentiary objections found in opposition to WI’s Motion for Summary Judgment, pursuant to Code of Civil Procedure section 437c, subdivision (q) (i.e., “[i]n granting or denying a motion for summary judgment or summary adjudication, the court need rule only on those objections to evidence that it deems material to its disposition of the motion”).

Request for Judicial Notice

            Plaintiff’s request for judicial notice is granted. Judicial notice may be taken of “[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” (Evid. Code §§ 452, subd. (c) and (h).)

Merits

            WI moves for summary judgment against Plaintiff’s claim for waiting time penalties under Labor Code section 203 based on Plaintiff’s work performed for WI on March 2, 2022, as a model for a single-day photoshoot. (Undisputed Material Fact (“UMF”), Nos. 1-3.)

1.     Existence of an Employment Relationship

            WI moves for summary judgment on the basis that Plaintiff was not an employee of WI, but an independent contractor, relying on Hill v. Walmart Inc. (9th Cir., 2022) 32 F.4th 811 which applied the multifactor test as provided in S.G. Borello & Sons, Inc. v. Dept. of Industrial Relations (1989) 48 Cal.3d 341 (“Borello”) to determine whether an employment relationship existed between the parties. (MSJ, at pp. 3, 11.) In opposition, Plaintiff contends that the ABC test provided in Dynamex v. Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903 (“Dynamex”) to determine whether an employee relationship exists controls. (Opp., at pp. 11-12.)[1]

            As an initial matter, the court must decide whether the existence of an employer-employee relationship should be determined under Borello, supra, 48 Cal.3d 341, or Dynamex, supra, 4 Cal.5th 903.

            In Dynamex, the California Supreme Court held a worker is to be considered an employee and the hiring entity an employer, “unless the hiring entity establishes (A) that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact, (B) that the worker performs work that is outside the usual course of the hiring entity's business, and (C) that the worker is customarily engaged in an independently established trade, occupation, or business.”¿ (Dynamex Operations W. v. Superior Court (2018) 4 Cal.5th 903, 964.)¿ 

Dynamex only considered the issue of employee classification with respect to wage orders issued by the state Industrial Welfare Commission (IWC). However, Assembly Bill 5 (AB 5), passed by the state Legislature in 2019, amended the Labor Code and Unemployment Insurance Code to “adopt[ ] the Dynamex holding for purposes of all benefits to which employees are entitled under the Unemployment Insurance Code, the Labor Code, and all applicable wage orders.” (Vendor Surveillance Corporation v. Henning (2021) 62 Cal.App.5th 59, 73; see Labor Code § 2775.) 

Labor Code section 2785, subdivision (a), states that “Section 2775 does not constitute a change in, but is declaratory of, existing law with regard to wage orders of the Industrial Welfare Commission and violations of this code relating to wage orders.” That section further provides, “Except as provided in subdivisions (a) and (b) of this section, this article shall apply to work performed on or after January 1, 2020.” (Labor Code § 2785, subd. (c).) Accordingly, for claims based on work performed prior to January 1, 2020, AB 5’s codification of the ABC test only applies if the claim involves an IWC wage order violation or a violation of the Labor Code relating to wage orders. (Vendor Surveillance Corporation, supra, 62 Cal.App.5th at 72-73; Vazquez v. Jan-Pro Franchising International, Inc. (2021) 10 Cal.5th 944, 949-52.) 

Some prior appellate decisions have applied the IWC wage order definition of “employee” to claims brought under Labor Code section 203, suggesting that Section 2775 is declaratory of existing law with respect to that section. (Kao v. Holiday (2017) 12 Cal.App.5th 947, 954-57, 962 [finding plaintiff entitled to waiting time penalties under section 203 as employee under “suffer or permit to work” wage order standard]; Goonewardene v. ADP, LLC (2016) 5 Cal.App.5th 154, 166 [applying definition of “employ” under wage orders for plaintiff’s section 203 claim], reversed and remanded on other grounds (2019) 6 Cal.5th 817.) However, following Dynamex but prior to passage of AB 5, “several Courts of Appeal decided that the Borello standard rather than the ABC test should apply to claims under the Labor Code that are not based upon wage order violations.” (Parada v. East Coast Transport Inc. (2021) 62 Cal.App.5th 692, 699; see Garcia v. Border Transportation Group, LLC (2018) 28 Cal.App.5th 558, 571 [“the wage order does not encompass claims for wrongful termination in violation of public policy or waiting time penalties”]); Gonzales v. San Gabriel Transit, Inc. (2019) 40 Cal.App.5th 1131, 1157 [“the ABC test applies to Labor Code claims which are either rooted in one or more wage orders, or predicated on conduct alleged to have violated a wage order,” but the Borello test applies to other Labor Code claims].) 

Considering the above, the court finds that Borello provides the applicable test for assessing whether Plaintiff was an employee of WI for purposes of his claim. Plaintiff’s contention that Dynamex controls would be an improper conclusion that runs afoul of and would invalidate Dynamex’s parsing of wage-versus-non-wage distinctions.  (Dynamex, supra, 4 Cal.5th at 913-914, 925-926.) It is well established that allegations of Labor Code violations that do not involve IWC wage orders, such as waiting time penalties under Labor Code section 203, are governed by the common law multifactor test articulated in Borello. Plaintiff’s claims do not rely on or otherwise relate to any IWC wage order. (Garcia, supra, 28 Cal.App.5th at 571.) Those wage orders “impose obligations relating to the minimum wages, maximum hours, and a limited number of very basic working conditions (such as minimally required meal and rest breaks) of California employees.” (Dynamex, supra, 4 Cal.5th at 913-14.) In contrast, duties concerning the “time and manner of paying wages” are prescribed under the Labor Code, including section 203. (Cuadra v. Millan (1998) 17 Cal.4th 855, 858, disapproved of on other grounds by Samuels v. Mix (1999) 22 Cal.4th 1; see Nishiki v. Danko Meredith, APC (2018) 25 Cal.App.5th 883, 891 [“The purpose of section 203 is to compel the prompt payment of earned wages; the section is to be given a reasonable but strict construction”].) In cases where the court applied the IWC “employee” definition to a section 203 claim, use of that standard was justified because the plaintiff had also asserted a claim for failure to pay minimum wages and/or overtime. (Kao, supra, 12 Cal.App.5th at 954; Goonewardene; 5 Cal.App.5th at 166.) Because Plaintiff has only asserted non-wage order claims under Section 203, Borello applies. (Garcia, supra, 28 Cal.App.5th at 571.)

Labor Code section 201(a) provides that “[i]f an employer discharges an employee, the wages earned and unpaid at the time of discharge are due and payable immediately.”  “Discharge” includes involuntary termination as well as releasing an employee upon “completion of a specific job assignment or time duration for which the employee was hired.” (Smith v. Super. Ct. (2006) 39 Cal.4th 77, 84-85.)  

Labor Code section 203(a) provides that “if an employer willfully fails to pay … any wages of an employee who is discharged … the wages of the employee shall continue as a penalty from the due date … until paid … for [no] more than 30 days.” 

Labor Code section 200(a) defines “wages” for purposes of section 203 as “all amounts for labor performed by employees.” 

Hence, to recover waiting time penalties under Labor Code 203, Plaintiff must prove that he was WI’s “employee”. At common law, the test for determining employment relationship is “whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired...” (Borello, supra, 48 Cal.3d at p. 350.) In addition to considering the right to control, the court shall also consider “secondary indicia” including: (a) whether the one performing the services is engaged in a distinct occupation or business; (b) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision; (c) the skill required in the particular occupation; (d) whether the principal or worker supplies instrumentalities, tools, and the place of work for the person doing the work; (e) the length of time for which the services are to be performed; (f) the method of payment, whether by the time or by the job; (g) whether the work is a part of the regular business of the principal; and (h) whether the parties believe they are creating the relationship of employer-employee.  (Id., at p. 343.) These factors are not “applied mechanically as separate tests; they are intertwined, and their weight depends often on particular combinations.”  (Id., at p. 351.)

Applying these factors, the court finds that there is a triable issue of fact as to whether Plaintiff was an employee of WI.

WI argues that NTA, acting as Plaintiff’s agent, required payment to be made directly to NTA rather than to Plaintiff to ensure that NTA would receive its commission. (MSJ, at p. 11.) WI understood its contractual relationship to be solely with NTA, and not Plaintiff, as WI had no contract with Plaintiff directly. (Ibid.) WI contends that when WI uses a staffing company, like NTA, WI has no employment relationship with the worker who is provided, in this case Plaintiff. (Ibid.) Additionally, WI argues that NTA negotiated Plaintiff’s services, booked the job, and agreed on the method of payment. (Ibid.) WI also contends that Plaintiff did not sign any employment agreement with WI nor provided any tax documents for payment . (Ibid.) As WI understood its contract to be with NTA, it believed that no wage obligations arose under the Labor Code. (Id., at p. 12.)

Regarding the right to control, the most important factor, Plaintiff contends that the photoshoot was conducted at the direction and under the ultimate control of WI. (Opp., at p. 15.) Plaintiff was instructed by WI’s personnel who had the ultimate decisional authority regarding the conduct of the shoot. (Plaintiff’s Evidence, Hall Decl., ¶¶ 2-3, Exh. 1.) Plaintiff has also presented evidence showing that WI organized the photoshoot, hired MP to produce the photoshoot, hired and paid the photographer, stylist, and wardrobe assistant, chose the location of the photoshoot. (Ibid.)

Based on the above evidence, particularly, the evidence of WI’s right to control, the court finds that a triable issue of material fact exists as to whether Plaintiff was an employee of WI. (Zaremba v. Miller (1980) 113 Cal.App.3d Supp. 1, 5 [finding that employer-employee relationship existed between model and photographer where “the photographer controlled every movement and the dress, hours, and place of work of [model], and could fire him for disobedience”].) 

2.     Willful Violation under Labor Code § 203

WI next argues that its failure to timely pay Plaintiff was not “willful” under section 203, assuming that Plaintiff were deemed to be an employee of WI. (MSJ, at p. 6.)

“A willful failure to pay wages within the meaning of Labor Code Section 203 occurs when an employer intentionally fails to pay wages to an employee when those wages are due. However, a good faith dispute that any wages are due will preclude imposition of waiting time penalties under Section 203.” (8 Cal. Code Regs. § 13520.)

“Under this definition, an employer's failure to pay is not willful if that failure is due to (1) uncertainty in the law [Citations], (2) representations by the taxing authority that no further payment was required [Citation], or (3) the employer's ‘good faith mistaken belief that wages are not owed’ grounded in a ‘good faith dispute,’ which exists when the ‘employer presents a defense, based in law or fact which, if successful, would preclude any recovery on the part of the employee.’” (Diaz v. Grill Concepts Services, Inc. (2018) 23 Cal.App.5th 859, 868.) A good faith dispute can exist even if the employer's proffered defense is “ultimately unsuccessful,” but not if the defense is also “unsupported by any evidence, [is] unreasonable, or [is] presented in bad faith.” (8 Cal. Code Regs. § 13520, subd. (a).) 

Here, it is undisputed that Plaintiff rendered his services as a model to WI for a photoshoot on March 2, 2022 where WI discharged Plaintiff at the end of the same day. (UMF, No. 14.) Under Labor Code section 201, subdivision (a), “If an employer discharges an employee, the wages earned and unpaid at the time of discharge are due and payable immediately.” WI made payment to NTA for $9,000.00 on April 21, 2022, which included $7,500.00 for Plaintiff’s services and $1,500.00 for NTA’s services. (UMF, Nos. 10, 25.) Plaintiff was then paid $6,000.00 by NTA after NTA took a 20% commission from Plaintiff’s fees. (Id., No. 20.)

WI argues that WI did not willfully fail to pay Plaintiff as it reasonably believed that WI had contracted with NTA, as Plaintiff’s agent, and WI reasonably and in good faith believed that payment was due within thirty (30) days of invoicing received on March 22, 2022 to NTA. (MSJ, at p. 7.)

The invoice sent to WI stated that payment was “due upon completion of shoot”. (WI’s Evidence, Ortiz Decl., ¶ 6, Exh. B.) However, WI reasonably believed that payment was due within thirty (30) days of invoicing to NTA as NTA had agreed. (Id., ¶¶ 7, 9.) WI made payment to NTA by check on April 21, 2022 in satisfaction of NTA’s invoice. (Ibid.) In addition, WI believed that payment was to be made directly to NTA rather than to Plaintiff to ensure that NTA would receive its commission. (WI’s Evidence, Fisher Decl., Exh. C.) WI understood its contractual relationship to be solely with NTA, and not Plaintiff, as WI had no contract with Plaintiff directly. (Ibid.) WI contends that when WI uses a staffing company, like NTA, WI has no employment relationship with the worker who is provided, in this case Plaintiff. (Ibid.) Additionally, WI argues that NTA negotiated Plaintiff’s services, booked the job, and agreed on the method of payment. (Ibid.) WI also contends that Plaintiff did not sign any employment agreement with WI nor provided any tax documents for payment. (Ibid.) As WI understood its contract to be with NTA, it believed that no wage obligations arose under the Labor Code. (MSJ, at p. 12.)

In opposition, Plaintiff argues that WI belief that it had no direct relationship with Plaintiff is unreasonable. (Opp., at p. 15.) Plaintiff contends that in all of the interactions between NTA and WI, NTA was acting on behalf of Plaintiff as his agent. (Id., at p. 16.) As such, Plaintiff argues that the agreements reached between NTA and WI regarding the terms of Plaintiff’s employment were agreements between Plaintiff and WI. (Ibid.)

WI’s evidence is sufficient to establish a good faith belief by WI that the payment was due according to the terms NTA and WI agreed upon. As such, WI did not “willfully” fail to pay Plaintiff in violation of Labor Code section 203. Plaintiff has not presented any facts disputing WI’s good faith reliance on NTA’s agreement of the terms which a complete defense to Plaintiff’s claim.  

3.     Additional Arguments

Pursuant to the court’s finding above, the court does not need to discuss WI’s arguments regarding NTA meeting the statutory definition of a temporary service employer nor that Plaintiff’s claim is barred by the one-year statute of limitations of California Code of Civil Procedure section 304(a).

Conclusion