Case Name: Barry Jekowsky v. GCA Equity Partners, et al.
Case No.: 17CV308158

I. Background

This lawsuit arises from an employment dispute between plaintiff Barry Jekowsky (“Plaintiff’) and his former employers, defendants GCA Equity Partners, LLC and Equipoise Capital Partners (collectively, “Defendants”).

Defendants are in the business of financing real estate development projects and hired Plaintiff as “Chief Account Officer — Director of Investor and Borrower Relations” in 2012. (Compl., ¶ 11.) Plaintiff alleges Defendants misclassified him as an independent contractor and failed to pay all of his wages. (Compl., ¶¶ 12-14.) When Defendants first hired Plaintiff, they paid him $10,000 a month and a commission of 30 percent of their gross profits for each project. (Compl., ¶ 13.) In October 2015, Plaintiff began earning $10,000 a month plus a commission of 10 percent of the net profits per project. (Compl., ¶ 13.) Plaintiff alleges Defendants did not pay his salary in November 2015 and December 2015, and also withheld a portion of his commission in May 2016. (Compl., ¶¶ 14-16.) Plaintiff asked Defendants about “his equity positions” for two projects in May 2016 as he was expecting to earn “commission of approximately $36,680.26.” (Compl., ¶ 15.) Defendants told him he would receive only $4,992.91 because they had previously “advanced” him funds for two other projects and were deducting those sums from his commission. (Compl., ¶ 16.)

Plaintiff objected to Defendants’ deduction on the basis it was not authorized by the compensation agreement the parties executed in October 2015. (Compl., ¶ 18.) In response, Defendants sent Plaintiff a new agreement reflecting that they could advance him funds and subsequently deduct the amount of such advances at any time in their discretion. (Compl., ¶ 19.) One month after Defendants sent Plaintiff this new agreement, they sent him an email stating they presumed his last day of work was May 31 as they had not heard anything from him since. (Compl., ¶ 21.) Plaintiff responded that he wanted to continue working for Defendants, but never heard anything back. (Compl., ¶ 22.) Plaintiff claims Defendants terminated him in retaliation for his complaints about unpaid wages. (Compl., ¶¶ 22-23.)

Plaintiff asserts causes of action against Defendants for: (1) failure to pay wages in violation of the Labor Code; (2) unfair competition; (3) retaliation in violation of the Labor Code; and (4) wrongful termination in violation of public policy.

Currently before the Court is Plaintiff’s motion for summary adjudication.

II. Discussion

“A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty, if the party contends that the cause of action has no merit, that there is no affirmative defense to the cause of action, that there is no merit to an affirmative defense as to any cause of action, that there is no merit to a claim for damages, as specified in Section 3294 of the Civil Code, or that one or more defendants either owed or did not owe a duty to the plaintiff or plaintiffs.” (Code Civ. Proc., § 437c, subd. (f)(1).)

Plaintiff seeks summary adjudication of four separate “issues” because he “was an employee, not an independent contractor.” (Not of Mot. at p. 2:2-14.) But the only “issue” that may be summarily adjudicated is an “issue of duty” not simply any legal issue. (Code Civ. Proc., § 437c, subd. (f)(1); see also Paramount Petroleum Corp. v. Super. Ct. (2014) 227 Cal.App.4th 226, 238-39.) Thus, it is necessary to clarify the nature and scope of Plaintiff’s motion in the first instance.

The first issue Plaintiff identifies as the subject of his motion is whether he was an employee as compared to an independent contractor. Although Plaintiff characterizes this issue as an issue of duty, his characterization is inapt. When a court summarily adjudicates an issue of duty, it determines whether a defendant owed a legal duty for purposes of a tort claim, such as negligence, or a contractual duty. (Linden Partners v. Wilshire Linden Associates (1998) 62 Cal.App.4th 508, 517-18.) Plaintiff does not cite and there does not appear to be any case treating a worker classification issue as an issue of duty within the meaning of Code of Civil Procedure section 437c, subdivision (f)(1). Consequently, the issue of whether Plaintiff was an employee or an independent contractor is not a proper subject of a motion for summary adjudication.

Plaintiff’s apparent reliance on Dynamex Operations West v. Superior Court (“Dynamex”) (2018) 4 Cal.5th 903 to support a contrary conclusion is misplaced. In Dynamex, the California Supreme Court discussed and clarified the standard for determining whether a worker is an employee or an independent contractor. (Id. at p. 964.) Plaintiff asserts the California Supreme Court adopted the standard that it did because “it would more easily lend itself to summary adjudication. . . .” (Mem. of Pts. & Auth. at p. 10:17.) Plaintiff is incorrect. The California Supreme Court did not explicitly state or suggest as much. In fact, it considered worker classification in the context of class certification, not summary adjudication. (Dynamex, supra, 4 Cal.5th at pp. 914-16.) Thus, Dynamex does not directly or indirectly support the proposition that a worker classification issue is a proper subject of a motion for summary adjudication.

As for the remaining three issues, it appears Plaintiff actually seeks summary adjudication of Defendants’ fourth, fourteenth, and twentieth affirmative defenses, which are proper subjects of a motion for summary adjudication. (See Code Civ. Proc., § 437c, subd. (f)(1).)

For these reasons, Plaintiff’s motion is treated solely as a motion for summary adjudication of the fourth, fourteenth, and twentieth affirmative defenses.

Turning to the merits of Plaintiff’s motion, he challenges these affirmative defenses on the ground he was an employee and not an independent contractor. But that is not a statutory ground for a motion for summary adjudication (Code Civ. Proc., § 437c, subd. (f)(1)), it is merely a supporting argument. In actuality, an affirmative defense may be summarily adjudicated on the ground it lacks merit. (Code Civ. Proc., § 437c, subd. (f)(1).)

A plaintiff moving for summary adjudication of an affirmative defense bears the initial burden of demonstrating the defense lacks merit. (See’s Candy Shops, Inc. v. Super. Ct. (2012) 210 Cal.App.4th 889, 900; see also Code Civ. Proc., § 437c, subd. (f)(2).) To carry this initial burden, “the plaintiff must negate an essential element of the defense, or establish the defendant does not possess and cannot reasonably obtain evidence needed to support the defense.” (Ibid.) “If the plaintiff does not make this showing, it is unnecessary to examine the [defendant’s] opposing evidence and the motion must be denied.” (Ibid. [internal quotation marks and citation omitted].) But, “if the moving papers establish a prima facie showing that justifies a [ruling] in the [plaintiff’s] favor, the burden then shifts to the [defendant] to [raise] a triable material factual issue.” (Ibid. [internal quotation marks and citation omitted].)

Defendants’ fourth affirmative defense is that “Plaintiff was paid all compensation due and owing in full, and therefore, [they] are released from any obligation to [him].” (Answer at p. 2:20-21.) Defendants’ fourteenth affirmative defense is they are “informed and believe that further investigation and discovery will reveal, and on that basis allege, that any monies owed to [Plaintiff] have been paid in full and any obligations they may have owed to [him] [have] been paid or otherwise satisfied in full.” (Answer at p. 3:20-22.) Defendants’ twentieth affirmative defense is that Plaintiff “consented to, encouraged, or voluntarily participated in all actions taken, if any[, and] held himself out as an owner of his own company. . . .” (Answer at p. 4:18-20.) Defendants add that “Plaintiff specifically misled [them] into believing that he was operating as a separate entity and his work was not part of [their] regular business [ ].” (Answer at p. 4:20-21.)

As a preliminary matter, it is not especially clear what these affirmative defenses are or that they are recognized affirmative defenses. For example, in Defendants’ fourth affirmative defense, they assert they are “released.” (Answer at p. 2:20-21.) Although release is an affirmative defense, it does not appear Defendants are actually raising that defense because they do not allege Plaintiff agreed to release them from liability either prospectively or as part of a settlement. (See, e.g., Vahle v. Barwick (2001) 93 Cal.App.4th 1323, 1328-29.) Instead, they simply allege they did, in fact, pay Plaintiff the money he was owed, which simply goes to whether Plaintiff can establish that element of his wage claim.

The fourteenth affirmative defense essentially consists of the same allegation that Defendants paid Plaintiff, which they describe as satisfaction in full. Accord and satisfaction is a recognized affirmative defense consisting of the following elements: “(1) that there was a bona fide dispute between the parties, (2) that the debtor made it clear that acceptance of what he tendered was subject to the condition that it was to be in full satisfaction of the creditor’s unliquidated claim, and (3) that the creditor clearly understood when accepting what was tendered that the debtor intended such remittance to constitute payment in full of the particular claim in issue.” (BII Finance Co. v. U-States Forwarding Services Corp. (2002) 95 Cal.App.4th 111, 126-27.) It is not clear Defendants intended to assert this particular defense given they simply allege there was a payment.

Finally, Defendants allege in their twentieth affirmative defense that Plaintiff consented. Consent is a recognized affirmative defense. (See, e.g., Edward Brown & Sons v. City and County of San Francisco (1950) 36 Cal.2d 272, 279, citing Civ. Code, § 3515 [“He who consents to an act is not wronged by it.”].) But it is not especially clear whether Defendants intended to rely on consent as a defense because they include other unrelated allegations. Additionally, there does not appear to be any authority for the proposition that consent is a defense to statutory claims for unfair competition and violation of the Labor Code or claims for wrongful termination in violation of public policy.

In summary, the Court is faced with trying to evaluate the sufficiency of affirmative defenses that are not especially clear and do not appear to qualify as such in the first instance. The lack of clarity in the answer is problematic because the Court necessarily must identify the affirmative defenses and their essential elements to evaluate Plaintiff’s motion. (See See’s Candy Shops, Inc., supra, 210 Cal.App.4th at p. 900.)

To this point, Plaintiff does not attempt to characterize these affirmative defenses or identify what essential element(s) Defendants will be unable to establish as necessary to demonstrate they lack merit. Although Plaintiff asserts in a conclusory manner that the affirmative defenses lack merit, he does not provide any legal analysis to support that conclusion. Instead, Plaintiff focuses exclusively on whether he was an employee or an independent contractor. It is fundamentally unclear how this argument demonstrates Defendants’ affirmative defenses lack merit. For example, even accepting Plaintiff should have been classified as an employee, it is not obvious how this demonstrates Defendants cannot establish they did, in fact, pay him as a defense to his claims. It is also unclear how Plaintiff’s argument is material to the affirmative defenses based on the nature of the claims they are asserted against. While Plaintiff characterizes one of his claims as failure to pay wages in violation of the Labor Code, he alleges Defendants did not pay his salary and commission in accordance with his compensation agreement. Plaintiff does not actually allege Defendants failed to pay minimum wages or overtime wages in violation of “regulations governing the wages, hours, and working conditions of employees” (Dynamex, supra, 4 Cal.5th at p. 913). Thus, it is not apparent how the classification issue is material to Plaintiff’s claim and, in turn, the affirmative defenses advanced by Defendants with respect thereto.

For these reasons, Plaintiff fails to carry his initial burden of showing the affirmative defenses lack merit. Plaintiff’s motion for summary adjudication of the fourth, fourteenth, and twentieth affirmative defenses is therefore DENIED. In light of this conclusion, it is unnecessary to rule on Defendants’ written objections to portions of Plaintiff’s evidence; these objections are preserved. (Code Civ. Proc., § 437c, subd. (q).) It is also unnecessary to rule on the objections to evidence presented by Plaintiff along with his reply, some of which are not actually evidentiary objections. The Court does not consider Plaintiff’s objections for the additional reason that they do not to comply with rule 3.1354 of the California Rules of Court. Plaintiff combines his objections with a motion to strike Defendants’ arguments and evidence, which motion is not authorized by Code of Civil Procedure sections 435 and 436 and is, therefore, DENIED.

The Court will prepare the order.