Salinas v. Cornwell Quality Tools Co.

• Docket Number: Case No. 5:19-cv-02275-FLA (SPx)
• Decision Date: 17 October 2022
• Citation: 635 F.Supp.3d 979
• Parties: Randy SALINAS, Plaintiff, v. The CORNWELL QUALITY TOOLS COMPANY, Defendant.
• Court: U.S. District Court — Central District of California

635 F.Supp.3d 979

Randy SALINAS, Plaintiff, v. The CORNWELL QUALITY TOOLS COMPANY, Defendant.

Case No. 5:19-cv-02275-FLA (SPx)

United States District Court, C.D. California

Signed October 17, 2022

Craig M. Nicholas, Shaun Andrew Markley, Nicholas and Tomasevic LLP, San Diego, CA, Ethan Thomas Litney, Wilson Turner Kosmo LLP, San Diego, CA, for Plaintiff.

Adam Yuda Siegel, Jackson Lewis PC, Los Angeles, CA, Allyson Suzanne Ascher, Jared L. Bryan, Eric Angel, Jackson Lewis PC, Irvine, CA, Robert M. Gippin, Pro Hac Vice, Roderick Linton Belfance LLP, Akron, OH, Jessica Ewert, Lewis Brisbois Bisgaard and Smith LLP, Costa Mesa, CA, Kyle Richard Bevan, Theodora Oringher PC, Costa Mesa, CA, for Defendant.

ORDER DENYING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT [DKT. 98]

FERNANDO L. AENLLE-ROCHA, United States District Judge

RULING

Before the court is Plaintiff Randy Salinas' ("Plaintiff") Motion for Partial Summary Judgment ("Motion"). Dkt. 98 ("Mot.").¹ Defendant The Cornwell Quality Tools Company ("Defendant") opposes the Motion. Dkt. 107 ("Opp'n"). On November 11, 2021, the court took the Motion under submission, finding it appropriate for decision without oral argument. Dkt. 121; see Fed. R. Civ. P. 78(b); Local Rule 7-15.

For the reasons set forth below, the court DENIES Plaintiff's Motion for Partial Summary Judgment (Dkt. 98) in its entirety. Plaintiff's requests for judicial notice (Dkts. 98-3 & 112-2) are DENIED as moot.

BACKGROUND

Cornwell is a manufacturer and distributor of professional-quality tools and equipment for the automotive and aviation industries, and its end-user customers are almost entirely professional mechanics and technicians. Dkt. 98-1 ("Mot. Br.") at 6; Opp'n 8, 11.² Cornwell primarily sells its products through sales to franchisees, who are known as "Dealers," for resale to end-user customers. Opp'n 8; Mot. Br. 7; Dkt. 98-10 (Markley Decl. Ex. D, Studenic Dep.) at 6 ("in 2011, nearly all of - 99 percent of Cornwell's top-line revenue came from the franchise dealer sales"). Dealers make their sales from display trucks or vans, which are called "mobile dealerships," and operate in non-exclusive "territories" that Cornwell assigns them. Mot. Br. 7-8; Opp'n 11.

In addition to selling products to customers, Dealers are also required to service warranties and repairs, collect on open accounts, and process returns for end-user customers. Mot. Br. 2-3, 8; Opp'n 8-9. Cornwell also maintains a sales department, which employs District Managers, Regional Managers, and a Director of National Sales ("DNS"). Mot. Br. 8; Opp'n 16.-17. Cornwell advertises its tool products directly to its end-user customers through catalogs, bulletins, and flyers. Mot. Br. 7; see Opp'n 29.

Dealers contract with Cornwell pursuant to standard Dealer Franchise Agreements ("DFAs"), which define the scope and terms of the franchise relationship. Mot. Br. 10; Opp'n 8; Dkt. 98-6 (Markley Decl. Ex. A, Columbus Dep. Ex. 3) at 11. Dealers are also provided with a detailed Franchise Disclosure Document ("FDD"), which includes extensive information concerning Cornwell's operations, the nature of the franchise relationship, and Dealers' obligations. Mot. Br. 10; Opp'n 9. Pursuant to the terms of the DFAs, Dealers are required to "personally participate full-time in the direct operation of the Dealership." Dkt. 98-6 (Markley Decl. Ex. A, Columbus Dep. Ex. 3) at 14.

On October 10, 2019, Plaintiff filed the Class Action Complaint ("Complaint") in Riverside County Superior Court. Dkt. 1-3 ("Compl."). Defendant removed the action to federal court on November 27, 2019. Dkt. 1. On May 29, 2020, Plaintiff filed the operative First Amended Class Action Complaint ("FAC"), asserting nine causes of action against Defendant for: (1) failure to reimburse expenses in violation of Cal. Labor Code § 2802 and the California Industrial Welfare Commission ("IWC") Wage Order No. 1, §§ 8-9; (2) unlawful deductions from wages in violation of Cal. Labor Code §§ 221-23 and IWC Wage Order No. 1, §§ 8-9; (3) failure to provide accurate wage statements in violation of Cal. Labor Code §§ 226 and 226.3, and IWC Wage Order No. 1, § 7; (4) failure to provide overtime pay in violation of Cal. Labor Code § 510 and IWC Wage Order No. 1, § 3; (5) failure to provide meal periods in violation of Cal. Labor Code § 226.7 and IWC Wage Order No. 1, § 11; (6) failure to provide rest breaks in violation of Cal. Labor Code § 226.7 and IWC Wage Order No. 1, § 12; (7) failure to pay wages in violation of Cal. Labor Code §§ 1194 and 1197, and IWC Wage Order No. 1; (8) unfair business practices in violation of Cal. Bus. & Prof. Code § 17200 et seq. (the Unfair Competition Law, "UCL"); and (9) violation of the California Private Attorneys General Act of 2004 ("PAGA"). Dkt. 26 ("FAC").³

Plaintiff contends Defendant improperly classifies its "Dealers" as independent contractors instead of employees, despite retaining and exercising control over Dealers and their central role in Cornwell's tools sales business. Id. ¶ 2. Plaintiff asserts the first through eighth causes of action on behalf of a proposed class of himself and similarly situated Dealers in California and the ninth cause of action as a representative action on behalf of the same. Id. ¶ 4.

Defendant filed its Answer to the FAC on June 12, 2020, asserting forty-two affirmative defenses. Dkt. 28. The fifth affirmative defense pleads the FAC "is barred to the extent that Plaintiff and/or the alleged putative class members/aggrieved employees were not employees of Defendant." Id. at 15-16. The thirty-fifth affirmative defense pleads that "[a]ny recovery on Plaintiff's FAC is barred because Plaintiff and the alleged putative class members/aggrieved employees were at all times independent contractors not subject to the provisions of the California Labor Code, the applicable wage orders of the California Industrial Welfare Commission, and/or any other law alleged in the FAC." Id. at 22.

On August 13, 2021, Plaintiff filed the operative version of the Motion, requesting the court grant summary judgment in his favor on Defendant's fifth and thirty-fifth affirmative defenses. Mot. 1. Defendant filed the operative version of its Opposition on September 1, 2021. Opp'n. These versions of the parties' documents replace and supersede the parties' earlier filings in connection with the Motion. See Dkt. 92.

Defendant's Evidentiary Objections

As an initial matter, Defendant objects to certain evidence submitted by Plaintiff in connection with the subject Motion. Dkt. 107-4. On a motion for summary judgment, the parties may only object to evidence if it "cannot be presented in a form that would be admissible in evidence." Fed. R. Civ. P. 56(c)(2). At this stage of the proceedings, the court is concerned only with the admissibility of the relevant facts, and not the form in which the evidence is presented. See Fed. R. Civ. P. 56(c)(2) advisory committee's note to 2010 amendment ("Subdivision (c)(2) provides that a party may object that material cited to support or dispute a fact cannot be presented in a form that would be admissible in evidence. The objection functions much as an objection at trial, adjusted for the pretrial setting."); Fraser v. Goodale, 342 F.3d 1032, 1036-37 (9th Cir. 2003) ("At the summary judgment stage, we do not focus on the admissibility of the evidence's form. We instead focus on the admissibility of its contents."); Block v. City of L.A., 253 F.3d 410, 418-19 (9th Cir. 2001) ("To survive summary judgment, a party does not necessarily have to produce evidence in a form that would be admissible at trial, as long as the party satisfies the requirements of Federal Rule of Civil Procedure 56.").

To the extent Defendant objects to the form in which evidence is presented, Defendant's objections are OVERRULED. See Fed. R. Civ. P. 56(c)(2). Defendant's evidentiary objections are otherwise OVERRULED as moot.

DISCUSSION

I. Legal Standard

Summary judgment is appropriate where "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). The moving party bears the initial burden of identifying relevant portions of the record that demonstrate the absence of a fact or facts necessary for one or more essential elements of each claim upon which the moving party seeks judgment. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Facts are "material" only if dispute about them may affect the outcome of the case under applicable substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute about a material fact is "genuine" if the evidence is such that a reasonable jury could return a verdict for the nonmovant. Id.

If the moving party meets its initial burden, the opposing party must then set out specific facts showing a genuine issue for trial to defeat the motion. Anderson, 477 U.S. at 247-48, 106 S.Ct. 2505; see also Fed. R. Civ. P. 56(c), (e). Summary judgment must be granted for the moving party if the nonmoving party "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322, 106 S.Ct. 2548. The court must decide whether the moving party is entitled to judgment as a matter of law in light of the facts presented by the nonmoving party, along with any undisputed facts. See T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630-31 & n. 3 (9th Cir. 1987). "Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no 'genuine issue for trial.' " Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

When deciding a motion for summary judgment, "the inferences to be drawn from the underlying facts . . . must...