Hurst v. Buczek Enters., LLC

• Decision Date: 02 May 2012
• Docket Number: No. C–11–1379 EMC.,C–11–1379 EMC.
• Citation: 870 F.Supp.2d 810
• Court: U.S. District Court — Eastern District of California
• Parties: Brad HURST, Plaintiff, v. BUCZEK ENTERPRISES, LLC, Defendant.

870 F.Supp.2d 810

Brad HURST, Plaintiff,

v.BUCZEK ENTERPRISES, LLC, Defendant.

No. C–11–1379 EMC.

United States District Court, N.D. California.

May 2, 2012.

Thomas E. Duckworth, Mark Christopher Peters, Duckworth Peters Lebowitz Olivier LLP, San Francisco, CA, for Plaintiff.

Alden John Parker, Nathan Huss Geronimo, Weintraub Genshlea Chediak, Sacramento, CA, for Defendant.

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT; AND GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

Docket Nos. 35, 39.

EDWARD M. CHEN, District Judge.

Plaintiff Brad Hurst filed suit in California Superior Court on November 5, 2010, against Buczek Enterprises, alleging violations of California wage and hour laws, unfair competition, and breach of the implied covenant of good faith and fair dealing. Compl., Docket No. 1. Defendant Buczek removed to federal court on the grounds of diversity jurisdiction. Docket No. 1. Buczek asserted counterclaims against Hurst for breach of contract and of the implied covenant of good faith and fair dealing. Id. Pending before the Court are the parties' cross-motions for summary judgment. Docket Nos. 35, 39. After considering the parties' submissions and oral argument, and for the reasons set forth below, the Court GRANTS in part and DENIES in part the parties' motions.

I. FACTUAL & PROCEDURAL BACKGROUND

Plaintiff is a landscape contractor and handyman residing in California. Defendant Buczek is a “property preservation company” based in New York; it provides clients with property maintenance, repair, and cleaning services, typically for vacant, foreclosed homes. Buczek Depo. at 24–25; DiBello Decl., Docket No. 43, Ex. B (Buczek Decl.), ¶¶ 2–4. It contracts with workers in various states, including California, to provide such services. While many of its clients own properties in California, none of its clients are based in California. Buczek Decl. ¶¶ 3–4. Buczek is not registeredto do business in California. Buczek Depo. at 237.

In 2007, Plaintiff Hurst responded to a Craigslist advertisement from Buczek requesting landscape services in Northern California. DiBello Decl., Docket No. 36, Ex. I. Plaintiff offered the services of Gomez Landscape Partnership, a company he operated with one business partner. Plaintiff informed Buczek that he did not hold a general contractor's license. Hurst Decl., Docket No. 45, ¶ 3. After Buczek representatives interviewed Hurst in California, Buczek Depo. at 24, the parties signed an Independent Contractor's Agreement, which provided that Hurst would perform services for Buczek in California. DiBello Decl., Docket No. 36, Ex. E. Beginning in October 2008, Hurst renewed his contract with Buczek under the name of Hurst Home Services, a name he created after his relationship with Gomez Landscaping ended. Id. Ex. G.

From December 2007 until he left Buczek in early 2010, Hurst worked fulltime for Defendant from five to six days per week and had no supplemental work. Hurst Decl., Docket No. 35, ¶ 6; Hurst Depo. at 238; Buczek Depo. at 68. He received work orders from Buczek each day with an assigned due date for said work. Hurst used his own tools and equipment for the job, although Buczek sometimes required him to buy specific tools. Beginning in 2008, Buczek had him purchase a computer from the company with pre-installed software to track the company's work orders. Hurst Depo. at 250, 290–91.

Hurst received between 10–20 work orders per day on average from Buczek. Hurst Decl., Docket No. 45, ¶ 11. The parties dispute whether Mr. Hurst was free to turn down work orders. Buczek provided its contractors with a price matrix listing the prices for different tasks. Hurst Decl., Docket No. 35, ¶ 6. Workers could either accept the prices suggested from clients or submit bids for the work. Buczek Depo. at 177. The parties dispute whether Hurst could submit bids at prices different from Buczek's price matrix. Sometimes Hurst performed the work himself, and sometimes he hired up to a dozen workers to help him complete the tasks when there were too many orders. Hurst Depo. at 324. Buczek paid Mr. Hurst weekly via direct deposit. Hurst Decl., Docket No. 35, ¶ 7. His payments were based on the invoices he submitted for each job, though Buczek sometimes adjusted the prices. Hurst Decl., Docket No. 45, ¶ 9 & Ex. B. Buczek only paid Hurst if and when it received payment from the client. Buczek Depo. at 287, 292.

The work orders contained instructions for tasks to be completed at the subject property. These tasks included, inter alia, lawn mowing and landscaping, sales cleans, winterizing, installation and repair, and debris removal. Hurst Decl., Docket No. 45, ¶¶ 6–7. Some of the tasks required a license under California law. See, e.g., Hurst Decl., Docket No. 45, ¶¶ 7, 27 & Ex. N. Mr. Hurst has never held a general contractor's license during the time in question. The work orders provided instructions as to how to complete each task. See, e.g., Buczek Depo. at 173; Hurst Decl., Docket No. 45, Ex. C. These instructions, and others provided by Buczek, were sometimes pages long, and sometimes specified what products Mr. Hurst had to use ( e.g., a certain brand of cleaning product). See, e.g., Hurst Decl., Docket No. 45, ¶¶ 10, 14–15 & Ex. C, E–G. Mr. Hurst was required to take detailed photos documenting his completion of each task. Id. ¶¶ 16–18 & Ex. H. He sometimes submitted hundreds of photos for one job. Id. ¶ 18. Buczek validated Mr. Hurst's work using the photos and other contractors it sent to properties to verify each others' work and conduct quality control. Id.; Buczek Depo. at 89, 106–07. Buczek also provided training and assistance to its workers, including one-on-one meetings, conference calls, instructional memos, and offsite trainings. Hurst Decl., Docket No. 45, ¶¶ 14–15 & Exs. E–G. The parties dispute whether the offsite trainings and conference calls were mandatory or simply recommended.

In 2009, one of Buczek's clients placed Buczek on a three-month probation due in part to concerns about the quality of services offered by Buczek's workers. Buczek Depo. at 224, 255. Buczek attributed half of its losses in Northern California to Hurst, which it “guesstimate[s]” at $125,000–175,000. Buczek Depo. at 251–52 (estimating total losses in Northern California at $250,000–350,000, and attributing 50% of that loss to Mr. Hurst). Buczek informed Mr. Hurst that it was giving him fewer work orders due in part to his quality of work. DiBello Decl., Docket No. 36, Ex. M.

In early 2010, Mr. Hurst ceased working for Buczek. Hurst Depo. at 280–81. He then filed suit in November 2010, asserting claims for unpaid wages and overtime, Cal. Labor Code §§ 200, 1197, 1197.1; failure to provide meal and rest breaks, Cal. Labor Code §§ 226.7, 512; failure to keep accurate wage and time records, Cal. Labor Code § § 226, 1174; breach of the implied covenant of good faith and fair dealing; violation of Cal. Labor Code § 2802; unfair competition, Cal. Bus. & Prof.Code § 17200; and civil penalties under Cal. Labor Code §§ 2698, 2699. Mr. Hurst alleges that Buczek misclassified him as an independent contractor when he was actually an employee. Compl. ¶ 8. Buczek counter-claimed for breach of contract and of the implied covenant of good faith and fair dealing, alleging that Hurst failed to “timely perform services in a good and reasonable workmanlike manner,” and failed to “comply with all relevant laws, rules and regulations.” Counter–Claim ¶ 17.

The parties' cross-motions for summary judgment are pending before the Court.

II. DISCUSSION

A. Legal Standard

Federal Rule of Civil Procedure 56(a) provides that summary judgment shall be rendered on a claim or defense, or part of a claim or defense, “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). An issue of fact is genuine only if there is sufficient evidence for a reasonable jury to find for the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248–49, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). “The mere existence of a scintilla of evidence ... will be insufficient; there must be evidence on which the jury could reasonably find for the [nonmoving party].” Id. at 252, 106 S.Ct. 2505. At the summary judgment stage, evidence must be viewed in the light most favorable to the nonmoving party and all justifiable inferences are to be drawn in the nonmovant's favor. See id. at 255, 106 S.Ct. 2505.

Where the plaintiff has the ultimate burden of proof, he or she may prevail on a motion for summary judgment only if he or she affirmatively demonstrates that there is no genuine dispute as to every essential element of its claim. See River City Mkts., Inc. v. Fleming Foods W., Inc., 960 F.2d 1458, 1462 (9th Cir.1992). In contrast, where the plaintiff has the ultimate burden of proof, the defendant may prevail on a motion for summary judgment by demonstrating the plaintiff's failure “to make a showing sufficient to establish the existence of an element essential to [the plaintiff's] case.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party possesses the initial burden of showing the absence of a genuine issue of fact. See Blair Foods, Inc. v. Ranchers Cotton Oil, 610 F.2d 665, 668 (9th Cir.1980).

B. Plaintiff's Motion for Summary Judgment

Plaintiff moves for partial summary judgment on two questions addressed below: (1) whether he was a Buczek employee as a matter of law; and (2) whether Buczek has standing to raise its counterclaims under California law.

1. Hurst's Employee Status

Plaintiff first argues that he was Buczek's employee as a matter of law because he was an unlicensed contractor performing work for which a contractor's license was required.

California Labor Code § 2750.5 provides, in relevant part, that “[t]here is a...