Case Name: Gonzalez v. Magnum Aviation, et al.

Case No.: 17CV310561

After full consideration of the evidence, the separate statements submitted by the parties, and the authorities submitted by each party, the court makes the following rulings:

This is an action for wrongful termination. According to the complaint, plaintiff Guadalupe Gonzalez (“Plaintiff”) was an aviation maintenance employee for defendants Magnum Aviation (“Aviation”) and Magnum Drywall (“Drywall”) (collectively, “Defendants”). (See complaint, ¶ 7.) Drywall paid Plaintiff’s salary. (See complaint, ¶ 7.) From January 2014 to June 15, 2015, Defendants’ employees and management gratuitously, constantly and routinely harassed Plaintiff regarding his Mexican heritage. (See complaint, ¶ 12.) On March 24, 2014, Defendants reduced Plaintiff’s work hours and pay, refused to provide him with training and refused to promote Plaintiff, for no legitimate reason. (See complaint, ¶ 13.) Defendants regularly ridiculed Plaintiff’s accent, asked him where he learned English and laughed at the way he pronounced certain words. (See complaint, ¶ 14.) In July 2014, Steve Lamb, Director of Maintenance, called Plaintiff a “wetback” and a “f—ing Mexican.” (See complaint, ¶ 15.) Defendants’ employees would routinely ask each other how many points they would get for running over Mexicans that they spotted while driving to lunch. (See complaint, ¶ 16.) Steve Lamb also stated that all Mexican women had “fat asses.” (See complaint, ¶ 16.) Steve Lamb rarely spoke to Plaintiff, refused to discuss any job related concerns with him, blamed him for others’ mistakes, became angry with him over others’ mistakes, constantly criticized Plaintiff for no reason and excluded Plaintiff from staff meetings, thereby isolating him from other employees. (See complaint, ¶ 17.) Defendants also discriminated against Plaintiff based on his age and physical disability, and failed to reasonably accommodate his injuries. (See complaint, ¶¶ 18-20.) On June 15, 2015, Plaintiff was terminated under the false pretext that Plaintiff was using the wrong grade oil on an aircraft and for falsifying a maintenance log book, when in fact, he was actually terminated for refusing to tolerate Steve Lamb’s discrimination based on race, national origin, age, physical disability and medical condition. (See complaint, ¶ 21.) On May 18, 2017, Plaintiff filed the complaint against Defendants, asserting causes of action for:

1) Violation of Government Code section 12940, subdivision (a);
2)
3) Violation of Government Code section 12940, subdivision (j)—harassment;
4)
5) Violation of Government Code section 12940, subdivision (h)–retaliation;
6)
7) Violation of Government Code section 12940, subdivision (k);
8)
9) Violation of Government Code section 12940, subdivisions (m) and (n);
10)
11) Negligent infliction of emotional distress;
12)
13) Wrongful termination in violation of public policy;
14)
15) Breach of oral contract; and,
16)
17) Breach of the implied covenant of good faith and fair dealing.
18)

Defendant Drywall moves for summary judgment, or, in the alternative, moves for summary adjudication of each of Plaintiff’s causes of action.

Defendant Drywall’s burden on summary judgment or adjudication

“A defendant seeking summary judgment must show that at least one element of the plaintiff’s cause of action cannot be established, or that there is a complete defense to the cause of action. … The burden then shifts to the plaintiff to show there is a triable issue of material fact on that issue.” (Alex R. Thomas & Co. v. Mutual Service Casualty Ins. Co. (2002) 98 Cal.App.4th 66, 72; internal citations omitted; emphasis added.)

“The ‘tried and true’ way for defendants to meet their burden of proof on summary judgment motions is to present affirmative evidence (declarations, etc.) negating, as a matter of law, an essential element of plaintiff’s claim.” (Weil et al., Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2007) ¶ 10:241, p.10-91, citing Guz v. Bechtel National Inc. (2000) 24 Cal.4th 317, 334; emphasis original.) “The moving party’s declarations and evidence will be strictly construed in determining whether they negate (disprove) an essential element of plaintiff’s claim ‘in order to avoid unjustly depriving the plaintiff of a trial.’” (Id. at § 10:241.20, p.10-91, citing Molko v. Holy Spirit Assn. (1988) 46 Cal.3d 1092, 1107.)

“Another way for a defendant to obtain summary judgment is to ‘show’ that an essential element of plaintiff’s claim cannot be established. Defendant does so by presenting evidence that plaintiff ‘does not possess and cannot reasonably obtain, needed evidence’ (because plaintiff must be allowed a reasonable opportunity to oppose the motion.) Such evidence usually consists of admissions by plaintiff following extensive discovery to the effect that he or she has discovered nothing to support an essential element of the cause of action.” (Id. at ¶ 10:242, p.10-92, citing Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 854-855.)

First through fifth causes of action—violations of Government Code § 12940

Drywall moves for summary adjudication of the first through fifth causes of action for violation of various FEHA provisions on the ground that they lack merit against it because it is not Plaintiff’s employer. “The ‘fundamental foundation for liability’ under FEHA is the ‘existence of an employment relationship’ between the parties, even if indirect.” (McCoy v. Pacific Maritime Assn. (2013) 216 Cal.App.4th 283, 301, quoting Vernon v. State of California (2004) 116 Cal.App.4th 114, 123.) “An assessment of whether such an employment relationship exists requires a consideration of the totality of the circumstances.” (Id.) “Factors to be considered are the payment of salary or other benefits, the ownership of the equipment used by the employee, the location where the relevant work is performed, the responsibility of the employer to train the employee, the authority to promote or discharge the employee, and the power to determine the schedule, assignment, and amount of compensation earned by the employee.” (Id.) “Although there is ‘no magic formula’ and no one dispositive factor, the most important consideration is the right of the employer ‘to control the means and manner of the workers’ performance.’” (Id. at p.302.) “That control must be significant in order to hold the alleged employer responsible, especially when the conduct underlying the claim was committed indirectly, by an immediate employer other than the defendant.” (Id.)

In support of its motion, Drywall presents undisputed evidence that Plaintiff never performed any drywall work while he was employed by defendant Magnum Aviation. (See Pl.’s separate statement of undisputed material facts in opposition to motion for summary judgment, no. (“UMF”) 2.) It is also undisputed that Drywall did not and does not own the equipment that Plaintiff used to perform his job at Magnum Aviation. (See UMF 4.) It is also undisputed that Drywall did not train Plaintiff, and did not establish Plaintiff’s work schedules or assignments and had no role in setting his compensation. (See UMFs 4, 6.) Drywall also presents the declaration of David Kirst, its Chief Financial Officer, who states that: Drywall has no ownership interest in Aviation; Drywall performs framing and drywall work and is not involved in the aviation business whatsoever; Drywall does not share any directors, management or employees with Aviation; Drywall has a different taxpayer identification number with the IRS from Aviation; Drywall has a different employer identification number with the EDD from Aviation; Drywall has a separate bank account from Aviation; Plaintiff never performed any work for Drywall; and, Drywall did not hire, transfer, promote, discipline or discharge Plaintiff. (See Kirst decl., ¶¶ 2-10.) Drywall also presents Plaintiff’s own deposition testimony in which Plaintiff states that he’s “an airplane mechanic… Magnum Drywall is sheetrock… I don’t do sheetrock.” (Muller decl. in support of Drywall’s motion for summary judgment, exh. A (“Pl. depo”), p.37:3-7.) Plaintiff also testified that he believed that he “would become an employee of Magnum Aviation as an airplane maintenance worker” and that at no point did Plaintiff believe that he was an employee of Drywall. (Pl. depo, p.42:8-11.) Drywall meets its initial burden to demonstrate that it was not Plaintiff’s employer and thus, Plaintiff cannot demonstrate that Drywall violated FEHA as to Plaintiff.

In opposition, Plaintiff argues that Drywall is nevertheless his employer because: his Wells Fargo bank statements show that all of his wages were paid by Drywall; Drywall employee Luis Torres testified that Aviation contacted him to help it with a workers’ compensation claim for Plaintiff, and so he drove over to Aviation to assist to gather information for Aviation and he told them that he would file this under Magnum Aviation Workers’ Compensation Insurance; Torres once talked to Aviation employee Steve Lamb because Lamb asked him for a referral for a disposal company for oils and fuels, and Torres referred him to the company that Drywall uses for paints and flammables; Torres kept his notes from the interview with Plaintiff; Torres signed the Workers’ Compensation claim form; Torres received a health insurance claim form for treatment of Plaintiff and Torres signed it, writing Magnum Aviation next to his signature; and Torres received requests regarding Plaintiff from the Employment Development Department and he did fax over documents in response.

However, the workers’ compensation form states that Plaintiff’s employer is Aviation. (See Pl.’s exhibits, exh. 3.) The employer’s report of occupational injury or illness lists Plaintiff’s employer as Aviation. (See Pl.’s exhibits, exh. 4.) The letter from State Compensation Insurance Fund regarding Plaintiff’s termination states that Torres referred the claims adjuster to ask Aviation employee Steve Lamb about it. (See Pl.’s exhibits, exh. 7.) The documents in Torres’ possession refer to Aviation as the employer, including the US Healthworks Medical Group work status report, the workers’ compensation form, the agreement to mediate, the US EEOC notice of charge of discrimination, the EEOC charge of discrimination, the US EEOC request for information, the DFEH notice of complaint, the letters from State Compensation Insurance Fund, the US EEOC dismissal and notice of rights, and, the EDD notice of wages used for unemployment insurance claim. (See Pl.’s exhibits, exh. 8.)

Plaintiff also presents evidence that Drywall CFO David Kirst prepared Aviation’s tax filings, reconciled Aviation’s accounting and had access to Aviation’s bank accounts such that he would see when they were overdrawn and then pay money to part owner of both Drywall and Aviation, Gary Robinson, as a distribution from Drywall so that Robinson could then move those monies to Aviation. However, this evidence of commingling funds and assets of the two defendants, partial ownership in the two defendants by Robinson, use of the same employees, and inadequate capitalization of Aviation potentially demonstrates alter ego liability, not that Drywall is the employer of Plaintiff. (See Sonora Diamond Corp. v. Super. Ct. (Sonora Union High School Dist.) (2000) 83 Cal.App.4th 523, 538-539 (stating that “[a]mong the factors to be considered in applying the [alter ego] doctrine are commingling of funds and other assets of the two entities, the holding out by one entity that it is liable for the debts of the other, identical equitable ownership in the two entities, use of the same offices and employees, and use of one as a mere shell or conduit for the affairs of the other… [o]ther factors which have been described in the case law include inadequate capitalization, disregard of corporate formalities, lack of segregation of corporate records, and identical directors and officers… [a]lter ego is an extreme remedy, sparingly used”).)

As to alter ego, the complaint does not allege that Drywall is the alter ego of Aviation or vice-versa. “It is well established that the pleadings determine the scope of relevant issues on a summary judgment motion.” (Nieto v. Blue Shield of California Life & Health Ins. Co. (2010) 181 Cal.App.4th 60, 74; see also Laabs v. City of Victorville (2008) 163 Cal.App.4th 1242, 1258 (stating that “[t]he complaint limits the issues to be addressed at the motion for summary judgment… [t]he rationale is clear: It is the allegations in the complaint to which the summary judgment motion must respond”); see also Hejmadi v. AMFAC, Inc. (1988) 202 Cal.App.3d 525, 536 (stating that “[o]n summary judgment motions, the pleadings always define the issues”).) Plaintiff cites to Vernon v. State of California (2004) 116 Cal.App.4th 114; however, Vernon expressly states that “the extent of the defendant’s right to control the means and manner of the workers’ performance is the most important… [i]n all cases, an ‘employer must be an individual or entity who extends a certain degree of control over the plaintiff.’” (Id. at p.126.) “[T]he control an organization asserts must be ‘significant,’ [citation], and there must be a ‘sufficient indicia of an interrelationship … to justify the belief on the part of an aggrieved employee that the [alleged co-employer] is jointly responsible for the acts of the immediate employer.’” (Id.) “In determining liability under the FEHA, we look “‘to the degree an entity or person significantly affects access to employment.’” (Id.)

Plaintiff does not present any evidence regarding Drywall’s right to control, and does not dispute that Plaintiff never performed any drywall work while employed by Aviation, and never performed any work on a Drywall construction site. (See UMF 2.) Plaintiff also does not dispute that Drywall did not own any equipment that Plaintiff used as an aviation maintenance employee. (See UMF 4.) Plaintiff does not present evidence counter to his deposition testimony in which he stated that “I am an airplane mechanic. Magnum Drywall is sheetrock. I don’t do sheetrock.” (Pl. depo), p.37:3-7; see also Whitmire v. Ingersoll-Rand Co. (2010) 184 Cal.App.4th 1078, 1087 (stating that “[w]here a declaration submitted in opposition to a motion for summary judgment motion clearly contradicts the declarant’s earlier deposition testimony or discovery responses, the trial court may fairly disregard the declaration and ‘conclude there is no substantial evidence of the existence of a triable issue of fact’”).) Plaintiff also does not dispute that Drywall did not establish his work schedules or assignments and had no role in setting his compensation. (See UMF 6.) Plaintiff also presents evidence that Steve Lamb of Aviation sent an email stating that he “ha[s] decided to terminate Lupe’s employment… due to …Falsification of a Federal Document (log book signoff for an Airworthiness Directive)… Employee completed an Inspection on a Light Sport aircraft, and ‘checked off’ an inspection which had obviously not been done.” The email was sent to David Kirst of Drywall, but receipt of an email does not indicate control over the means and manner of Plaintiff’s performance, or otherwise affect Plaintiff’s access to performance. On the contrary, the email explicitly stated that the Aviation employee terminated Plaintiff due to performance issues at Aviation, supporting Aviation’s sole control over the means and manner of Plaintiff’s performance. Thus, the lone evidence presented by Plaintiff in opposition that supports any Vernon factor are the Wells Fargo Bank statements indicating a transfer of monies from “Magnum Drywall Payroll.”

Drywall’s CFO explained in his declaration submitted by both parties that “Heritage Bank mistakenly made reference to Magnum Drywall when paying Magnum Aviation employees even though the payments to Magnum Aviation employees were made by Magnum Aviation from its own bank accounts… Magnum Drywall has never paid the wages of Magnum Aviation employees.” (Pl.’s evidence, exh. 9, ¶ 8; see also Kirst decl. in support of Drywall’s motion for summary judgment, ¶ 8.) Plaintiff does not demonstrate that the funds appearing to be from “Magnum Drywall” actually came from Drywall. Indeed, the pay statements submitted by both parties for these deposits in fact indicate that they are from “Magnum Aviation Inc.” (See Pl’s evidence, exhs. 9A, 14.) Thus, Plaintiff fails to demonstrate a triable issue of material fact since, as a matter of law, considering a totality of the circumstances, Drywall is not the employer of Plaintiff. Accordingly, the motion for summary adjudication of the first through fifth causes of action is GRANTED.

The sixth cause of action for negligent infliction of emotional distress

The sixth cause of action alleges that “[a]t all times herein mentioned, plaintiff was an employee of defendants. Defendants, as employers, had a duty of care to protect plaintiff from discrimination and harassment.” (Complaint, ¶ 70.) Drywall moves for summary adjudication of the sixth cause of action on the ground that it lacks merit because it had no relationship with Plaintiff, as it did not employ him and did not control Plaintiff’s workplace. As Drywall asserts, “[n]egligent infliction of emotional distress is a form of the tort of negligence, to which the elements of duty, breach of duty, causation and damages apply.” (Huggins v. Longs Drug Stores California, Inc. (1993) 6 Cal.4th 124, 129; see also Arista v. County of Riverside (2018) 29 Cal.App.5th 1051, 1063 (stating that “[t]he negligent causing of emotional distress is not an independent tort, but the tort of negligence… [t]he traditional elements of duty, breach of duty, causation, and damages apply”).) Again, here, the alleged duty of the sixth cause of action is that “as employers, had a duty of care to protect plaintiff from discrimination and harassment,” and [i]t is well established that the pleadings determine the scope of relevant issues on a summary judgment motion.” (Nieto v. Blue Shield of California Life & Health Ins. Co. (2010) 181 Cal.App.4th 60, 74; see also Laabs v. City of Victorville (2008) 163 Cal.App.4th 1242, 1258 (stating that “[t]he complaint limits the issues to be addressed at the motion for summary judgment… [t]he rationale is clear: It is the allegations in the complaint to which the summary judgment motion must respond”); see also Hejmadi v. AMFAC, Inc. (1988) 202 Cal.App.3d 525, 536 (stating that “[o]n summary judgment motions, the pleadings always define the issues”).) The evidence upon which the parties rely are identical as to the prior causes of action. For reasons previously stated, Drywall meets its initial burden to demonstrate that it is not Plaintiff’s employer and thus lacks a duty to protect Plaintiff from discrimination and harassment at his workplace. In opposition, for reasons previously stated, Plaintiff fails to demonstrate a triable issue of material fact since, as a matter of law, considering a totality of the circumstances, Drywall is not the employer of Plaintiff. Accordingly, the motion for summary adjudication of the sixth cause of action is GRANTED.

Seventh cause of action for wrongful discharge in violation of public policy

Drywall moves for summary adjudication of the seventh cause of action for wrongful discharge in violation of public policy on the ground that it lacks merit because Plaintiff was not employed by Drywall. “The claim for wrongful discharge in violation of public policy requires Haney to prove (1) he was employed by [the defendant], (2) [the defendant] discharged him, (3) the alleged violation of public policy was a motivating reason for the discharge, and (4) the discharge caused him harm.” (Haney v. Aramark Uniform Services, Inc. (2004) 121 Cal.App.4th 623, 641.) As previously stated, Drywall meets its initial burden to demonstrate that it is not Plaintiff’s employer, and therefore, did not discharge Plaintiff. In opposition, for reasons previously stated, Plaintiff fails to demonstrate a triable issue of material fact since, as a matter of law, considering a totality of the circumstances, Drywall is not the employer of Plaintiff. Accordingly, the motion for summary adjudication of the seventh cause of action is GRANTED.

Eighth cause of action for breach of contract and ninth cause of action for breach of implied covenant of good faith and fair dealing

Drywall moves for summary adjudication of the eighth cause of action for breach of oral contract of continued employment and the dependent ninth cause of action for breach of the implied covenant of good faith and fair dealing on the ground that it lacks merit because it never had a contract with Plaintiff. A plaintiff asserting a breach of contract cause of action must demonstrate the existence of a contract. (See Acoustics, Inc. v. Trepte Construction Co. (1971) 14 Cal.App.3d 887, 913.) Here, Plaintiff testified that he is an airplane mechanic and “Magnum Drywall is sheetrock. I don’t do sheetrock” (Pl.’s depo, p.37:3-7); when he met for the interview, he “was going to be doing work for Magnum Aviation” (Pl.’s depo, p.37:16-17); he did not think he was going to be working for Magnum Drywall, Inc (Pl.’s depo, p.38:9-11).; when he finished the interview he “believed that [he] would become an employee of Magnum Aviation as an airplane maintenance worker” (Pl.’s depo, p.39:10-14); and, he did not “[a]t any point… believe that [he] w[as] an employee of Magnum Drywall, Inc.” (Pl.’s depo, p. 42:8-11). Drywall meets its initial burden to demonstrate that it did not have any contract with Plaintiff. In opposition, Plaintiff argues “[a]s the Court is aware, Mr. Gonzalez has submitted his Wells Fargo bank statements, which indicate that MD paid Mr. Gonzalez’ wages… [a]lthough MD claims that was a mistake, it does not assist MD at this stage of the proceedings, as their contention merely creates a triable issue of fact, which, of course, warrants the denial of the motion for summary judgment.” (Pl.’s opposition to the motion for summary judgment, p.16:7-11.) However, the Wells Fargo bank statements do not evidence any oral or written contract of employment, or implied covenant regarding such an agreement. Accordingly, Plaintiff fails to demonstrate a triable issue of material fact as to the eighth and ninth causes of action, and the motion for summary judgment is GRANTED.

The Court shall prepare the Order.