Zoom Electric, Inc. v. International Brotherhood of Electrical Workers, Local 595

Filing 134


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1 IN THE UNITED STATES DISTRICT COURT 2 FOR THE NORTHERN DISTRICT OF CALIFORNIA 3 4 ZOOM ELECTRIC, INC., 5 6 7 8 Petitioner, v. INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL 595, and DOES 1-20, Respondents. 10 United States District Court For the Northern District of California 9 ________________________________/ 11 12 13 14 15 16 17 18 19 20 21 INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL 595; ALAMEDA COUNTY ELECTRICAL INDUSTRY SERVICE CORPORATION; IBEW LOCAL 595 HEALTH & WELFARE TRUST FUND; IBEW LOCAL 595 PENSION TRUST FUND; IBEW LOCAL 595 MONEY PURCHASE PENSION TRUST FUND; IBEW LOCAL 595 VACATION FUND; IBEW LOCAL 595 APPRENTICE & TRAINING FUND; ELECTRICAL CONTRACTORS TRUST; CONTRACT ADMINISTRATION FUND; LABOR MANAGEMENT COOPERATION FUND; VICTOR UNO; and DON CAMPBELL, Counter-Plaintiffs, 22 23 24 25 26 27 28 v. ZOOM ELECTRIC, INC.; VEIKO HORAK; B-SIDE, INC.; and DOES ONE through TEN, inclusive, Counter-Defendants. ________________________________/ No. C 11-1699 CW ORDER DENYING B-SIDE’S MOTION TO STAY (Docket No. 107), GRANTING COUNTERPLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT (Docket No. 108), DENYING B-SIDE’S CROSSMOTION FOR SUMMARY JUDGMENT (Docket No. 112) AND DIRECTING THE CLERK TO ENTER PARTIAL JUDGMENT 1 B-SIDE, INC., 2 3 4 5 6 7 Cross-Claimant, v. VEIKO HORAK, doing business as ZOOM ELECTRIC, Cross-Defendant. ________________________________/ Counter-Defendant B-Side, Inc. moves to stay proceedings 8 pending resolution of a state court action between it and 9 Counter-Plaintiff International Brotherhood of Electrical Workers, 10 United States District Court For the Northern District of California Local 595 (the Union). The Union and the other Counter- 11 Plaintiffs, the employee benefit trust funds, Alameda County 12 Electrical Industry Service Corporation (EISC), which is the 13 collection agent for the trust funds, and Victor Uno and Don 14 Campbell, who are trustees for the trust funds and officers of 15 EISC, oppose the motion to stay and move for summary judgment on 16 their claims against B-Side. B-Side opposes Counter-Plaintiffs’ 17 motion for summary judgment and also moves for summary judgment. 18 Having considered the papers filed by the parties and their 19 arguments at the hearing, the Court DENIES B-Side’s motion to 20 stay, GRANTS Counter-Plaintiffs’ motion for summary judgment and 21 DENIES B-Side’s cross-motion for summary judgment. This resolves 22 all remaining claims in this action, except for those brought by 23 B-Side against Counter-Defendant and Cross-Defendant Vieko Horak. 24 Because Horak has filed for bankruptcy, the claims against him are 25 stayed pursuant to 11 U.S.C. § 362. Finding no just reason for 26 delaying the other claims during the stay, the Court directs the 27 Clerk to enter partial judgment on the claims that do not involve 28 2 1 Horak, including Counter-Plaintiffs’ claims against B-Side and 2 those resolved in the Court’s Order of March 20, 2012, which were 3 the Union’s claims against Petitioner and Counter-Defendant Zoom 4 Electric, Inc. (ZEI) and ZEI’s claim against the Union. 5 BACKGROUND 6 The following facts are taken from the evidence already in 7 the record and that submitted by the parties in connection with 8 the instant motions. 9 ZEI was first incorporated in 2007. Request for Judicial United States District Court For the Northern District of California 10 Notice (RJN), Docket No. 27, Ex. D. 11 suspended at all times relevant to this action, until it was 12 revived on July 11, 2011. 13 Ex. A. 14 and its agent for service of process, and his address was the same 15 as ZEI’s address. 16 Horak has also been registered to do business under the fictitious 17 business name “Zoom Electric” in the City and County of San 18 Francisco. RJN, Docket No. 27, Ex. E. 19 ZEI’s corporate status was Id.; Horak Decl., Docket No. 50, ¶ 2, At all times relevant, Vieko Horak was ZEI’s sole owner RJN, Docket No. 27, Ex. D. Since June 29, 2005, The Union is a party to a Project Labor Agreement (PLA), 20 which governs the wages and hours, and terms and conditions of 21 employment, for construction work at the Oakland Unified School 22 District (OUSD). 23 (PLA). 24 Assent on behalf of ZEI, agreeing to be bound by the terms of the 25 PLA while performing work on OUSD construction projects. 26 Decl., Docket No. 43, ¶ 9, Ex. C; Martin Decl., Docket No. 21, ¶ 3 27 & Ex. B. 28 to the PLA. See Maloon Decl., Docket No. 43, ¶ 3, Ex. A On or about September 8, 2010, Horak signed a Letter of Maloon B-Side, Inc. also signed an identical Letter of Assent Martin Decl., Docket No. 21, ¶ 3 & Ex. B. 3 On ZEI’s 1 Letter of Assent, Horak listed ZEI’s California contractor’s 2 license number as C10 857743. 3 Ex. C; Martin Decl., Docket No. 21, ¶ 3 & Ex. B. 4 not ZEI’s but was Horak’s individual contractor’s license number, 5 which was registered for him to do business under the fictitious 6 name of “Zoom Electric.” 7 Docket No. 27, Exs. A-C, E; Maloon Decl., Docket No. 43, ¶ 19. 8 More than a year later, on September 12, 2011, ZEI applied for its 9 own contractor’s license; the State rejected its application on United States District Court For the Northern District of California 10 September 19, 2011. Maloon Decl., Docket No. 43, ¶ 9, This number was Horak Decl., Docket No. 50, ¶ 3; RJN, RJN, Docket No. 72, Ex. A. 11 The PLA sets forth certain requirements with which 12 contractors must comply to hire workers for covered projects, 13 including that contractors must hire Union members who are out of 14 work, in a one-to-one ratio with the contractor’s own employees; 15 hiring of either must take place through a referral from the 16 Union. 17 first hire a Union worker, then may hire the contractor’s own 18 qualified worker through a referral from the Union, then may hire 19 a second Union worker, then a second of the contractor’s workers, 20 and so on, until the contractor has a sufficient crew for the job 21 or he has hired ten of his own workers. 22 the contractor, the contractor’s employees must first apply to the 23 Union to work on the project and must meet certain qualifications. 24 Id. 25 executives, managerial employees, engineering employees, 26 supervisors . . .” 27 28 PLA ¶ 8.1. According to this system, the contractor must Id. To be referred to The PLA excludes from this requirement “a Contractor’s Id. ¶ 2.7. All contractors who are signatories to the PLA are obliged to provide conditions of employment, and wages and benefits at 4 1 certain specified rates, in accordance with the PLA. 2 ¶¶ 9.3-9.4. 3 established vacation, pension or other form of deferred 4 compensation plan, apprenticeship, and health benefit funds for 5 each hour worked on the Project” in certain specified amounts. 6 Id. at ¶ 9.1. 7 A, which consists of the Alameda County Inside Construction 8 Agreement. 9 B. Id. at Contractors also agree to “pay contributions to the The contribution amounts are set forth in Schedule Id. at ¶ 9.1; Maloon Decl., Docket No. 43, ¶ 6 & Ex. This document also establishes eight employee benefit trust United States District Court For the Northern District of California 10 funds, which are among the Counter-Plaintiffs to this action. 11 Maloon Decl., Docket No. 43, ¶ 7 & Ex. B. 12 jointly managed by Union and employer trustees and are governed by 13 written Trust Agreements. 14 bound by the written terms of the Trust Agreements. 15 Id. The trust funds are Signatories to the PLA agree to be PLA ¶ 2. The PLA further provides that it is “the responsibility of 16 the Contractor(s) and Unions to investigate and monitor compliance 17 with the provisions of the agreement” described above. 18 X. 19 be construed to interfere with or supersede the usual and 20 customary legal remedies available to the Unions and/or employee 21 benefit Trust Funds to collect delinquent Trust Fund contributions 22 from Contractors on the Project.” 23 PLA Art. The PLA specifically states, “Nothing in this agreement shall Id. The PLA also establishes a “grievance arbitration procedure.” 24 See id. at Art. XII. 25 to resolve a dispute arising “out of the meaning, interpretation 26 or application of the provisions of this Agreement, including the 27 Schedule A agreements” by meeting and conferring about the dispute 28 (Step 1), they are required to submit the dispute to the Joint Under the procedure, if parties are unable 5 1 Administrative Committee (JAC), which must meet “to confer in an 2 attempt to resolve the grievance” (Step 2). 3 If the dispute is not resolved within the time allowed for 4 resolution by the JAC, either party may refer the dispute to an 5 arbitrator within five days (Step 3). 6 arbitrator must conduct a hearing on the dispute and give the 7 parties a binding decision within five days after the hearing. 8 Id. 9 authority to change, amend, add to or detract from any of the United States District Court For the Northern District of California 10 11 Id. at ¶¶ 12.1, 12.2. Id. at ¶ 12.2. The The PLA specifies that the “Arbitrator shall have no provisions of the Agreement.” Id. B-Side was awarded a contract for a fire alarm replacement 12 project at Roosevelt Middle School in the OUSD, Project 7099. 13 Kalafati 1st Decl., Docket No. 51, ¶ 1; Kalafati 2nd Decl., Docket 14 No. 112-2, ¶ 3;1 Hwang Decl., Docket No. 108-1, Ex. A (B-Side’s 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 Counter-Plaintiffs object to each paragraph of the declaration of Anton Kalafati, president of B-Side, that was submitted with B-Side’s cross-motion on the basis that the statements made therein are hearsay or without foundation. They also suggest that the Court should give the declaration “no evidentiary weight” because it is “uncorroborated and selfserving.” Counter-Pls.’ Opp. to B-Side’s Cross-Mot. for Summ. J. and Reply in Supp. of Mot. for Summ. J. 1 n.2, 5 n.6; Separate Evid. Objections, Docket No. 115-2. In violation of Civil Local Rule 7-3(a),(c), Counter-Plaintiffs have filed their evidentiary objections separately from their brief. Because their brief and this separate document are together under the page limit, the Court excuses as harmless the violation of the Civil Local Rules. 6 1 Resp. to Requests for Admission), 3-4. On August 18, 2010, Horak 2 3 4 5 6 7 8 9 United States District Court For the Northern District of California 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Counter-Plaintiffs make only conclusory objections regarding hearsay and foundation, without any explanation of the basis for these objections. Most of the statements made by Kalafati are based on his personal knowledge, including about his own beliefs, and are not hearsay. Further, to the extent that CounterPlaintiffs contend that the documents attached to his declaration are without foundation, Kalafati has provided a proper foundation for them in his declaration. However, the statement made by Kalafati, that, at the JAC evidentiary hearing, he learned “that one of the two arbitrators, Gene Johnson, was an employee of Davillier Sloan, a consulting firm that the OUSD had hired to administer the Project Labor Agreement,” Kalafati 2nd Decl., Docket No. 112-2, ¶ 8, is inadmissible as hearsay and without foundation. Kalafati has not attested to how he learned this or how it is a fact within his personal knowledge, and it appears that Kalafati is repeating something that was stated at the arbitration. Thus, the Court sustains the objection to this statement and overrules the conclusory objections to the remainder of the declaration. As to Counter-Plaintiffs’ suggestion that the declaration should not be given any evidentiary weight, the Ninth Circuit recognizes that a court “need not find a genuine issue of fact” where a declaration is “self-serving” and contains only “bald, uncorroborated, and conclusory assertions.” FTC v. Neovi, Inc., 604 F.3d 1150, 1159 (9th Cir. 2010) (internal quotation marks and citations omitted); see also Hexcel Corp. v. Ineos Polymers, Inc., 681 F.3d 1055, 1063 (9th Cir. 2012) (“Conclusory, self-serving affidavits, lacking detailed facts and any supporting evidence, are insufficient to create a genuine issue of material fact.”) (internal quotation marks, brackets and citation omitted). However, that a declaration is self-serving is by itself not enough to disregard it at the summary judgment stage: “declarations oftentimes will be self-serving--and properly so, because otherwise there would be no point in a party submitting them.” Id. at 909 (internal formatting, quotation marks and citation omitted). Thus, generally, “that an affidavit is selfserving bears on its credibility, not on its cognizability for purposes of establishing a genuine issue of material fact.” Id. (internal formatting, quotation marks and citation omitted). “Only in certain instances--such as when a declaration states only conclusions, and not such facts as would be admissible in evidence,--can a court disregard a selfserving declaration for purposes of summary judgment.” Id. (internal quotation marks, formatting and citation omitted). Thus, to the extent that the Court has found above that statements in his declaration were otherwise admissible as evidence, it overrules this objection. Finally, to the extent that Counter-Plaintiffs argue that Kalafati’s declaration is not credible, credibility disputes are not appropriate for determination on summary judgment. 7 1 submitted a price quote to B-Side to provide certain services in 2 connection with the Roosevelt Middle School job. 3 Docket No. 70, Ex. F (Horak Depo. as Rule 30(b)(6) witness of ZEI, 4 hereinafter Horak/ZEI Depo.), 19:16-20:24 & Ex. 5. 5 of the quote listed “Zoom Electric, Inc.” and “Zoom Electric Lic. 6 # 857743.” 7 School as 1926 19th Avenue in Oakland, California. 8 9 Id. Thomas Decl., The letterhead The quote listed the address of Roosevelt Middle Id. B-Side had once previously employed Horak as a subcontractor earlier that year, in May 2010, in connection with a job at United States District Court For the Northern District of California 10 California State University, East Bay. 11 No. 112-2 ¶ 2; Horak/ZEI Depo. 22:14-21. 12 subcontract for the California State University job, 13 Kalafati, President and Responsible Managing Officer of B-Side, 14 checked the website of the Contractors State License Board and saw 15 that “Zoom Electric,” Horak’s fictitious business name, held a 16 valid license. 17 Kalafati does not state whether he checked the licensing status of 18 Zoom Electric, Inc. as well. 19 Kalafati 2nd Decl., Docket Before awarding the Anton Kalafati 2nd Decl., Docket No. 112-2 ¶ 2. Kalafati attests that, after deciding to award “Zoom 20 Electric” the subcontract on the Roosevelt Middle School job, he 21 sent Horak a version of B-Side’s standard subcontractor’s 22 agreement by email. 23 Kalafati attaches to his declaration a copy of the version of the 24 agreement that he says he emailed to Horak, but not of the email 25 itself. 26 is identified in two places as “Zoom Electrical,” and the “License 27 Number” for the subcontractor is filled in as “857743.” Id., Ex. B. Kalafati 2nd Decl., Docket No. 112-2, ¶ 4. In the attached version, the subcontractor 28 8 Id. The 1 only address that appears for the property at issue in the job is 2 “950 High Street Oakland CA.” Id. 3 Kalafati states in his declaration that Horak sent him an 4 email stating “that the address of the project was incorrect,” and 5 that Kalafati then emailed Horak “a corrected version which he 6 brought to my office and signed.” 7 112-2 ¶ 4. 8 the document that he sent to Horak identified the subcontractor as 9 “Zoom Electric,” the version Horak returned had “Inc.” added after Kalafati further attests that, although the version of 10 United States District Court For the Northern District of California Kalafati 2nd Decl., Docket No. “Zoom Electric.” 11 and Kalafati did not notice it. Id.2 Horak did not tell Kalafati of this change Id. 12 However, in the signed version of the Subcontractor’s 13 Agreement, dated August 19, 2010, the address remained “950 High 14 Street Oakland CA” and was not changed. 15 Also, no license number appears for the subcontractor. 16 one part of the signed agreement, the subcontractor is referred to 17 as “Zoom Electrical,” and in another part, it is identified as 18 “Zoom Electric, INC.” Id. Horak/ZEI Depo., Ex. 5. Id. In (capitalization in original). 19 Kalafati attests that he noticed this interlineation sometime 20 after the Union began the grievance procedure on December 21, 2010 21 and he assumed it meant that the contracting party was ZEI, owned 22 by Horak, and not Horak doing business as “Zoom Electric,” a sole 23 proprietorship; however, he does not state exactly when he noticed 24 this. 25 26 27 28 Kalafati 2nd Decl., Docket No. 112-2, ¶ 6; Maloon Decl., 2 As noted previously, the version attached to Kalafati’s declaration, which he attests is the version he emailed to Horak, identifies the sub-contractor as “Zoom Electrical” and not “Zoom Electric,” as Kalafati states in his declaration. Kalafati 2nd Decl., Docket No. 112-2, ¶ 4, Ex. B. 9 1 Docket No. 43, ¶ 12. 2 late March 2011 that ZEI was not licensed. 3 Docket No. 112-2, ¶ 6. 4 the course of the work on the Roosevelt Middle School project, he 5 assumed that B-Side had been dealing with “Zoom Electric,” a sole 6 proprietorship, and corroborates this by offering checks that he 7 made out to “Zoom Electric” throughout 2010 and 2011 and tax forms 8 he addressed to “Vieko Horak, Zoom Electric” for those years. 9 Kalafati 2nd Decl., Docket No. 112-2 ¶ 5, Exs. C1 and C2. Kalafati represents that he became aware in Kalafati 2nd Decl., Kalafati further states that, throughout United States District Court For the Northern District of California 10 However, the checks themselves do not corroborate Kalafati’s 11 statement that he assumed he was dealing with a sole 12 proprietorship; these exhibits include checks dated as recently as 13 December 2011, long after Kalafati and B-Side learned of the 14 distinction between ZEI and Zoom Electric, and had acknowledged 15 that it had hired the former and not the latter. 16 Ex. C2.3 17 Kalafati’s understanding of the entity with which B-Side had 18 contracted. 19 Id. at ¶¶ 5, 6, Thus, the checks were made out in this way regardless of On October 14, 2010, three ZEI employees began electrical 20 work on the Roosevelt Middle School project. 21 No. 21, ¶ 4; Maloon Decl., Docket No. 43, ¶ 11. 22 Horak, owner and Chief Executive Officer of ZEI; Aleh Holdvekht, Martin Decl., Docket These included: 23 24 25 26 27 28 3 In response to the Union’s stop notice sent to OUSD, Kalafati, on behalf of B-Side, sent OUSD an affidavit, dated April 10, 2011, stating that “Zoom Electric, Inc. was hired as an electrical subcontractor.” RJN, Docket No. 107-3, Union’s State Court Compl., Ex. I; see also Kalafati 3rd Decl., Docket No. 117-1, ¶ 3 (acknowledging that this exhibit contains B-Side’s response to the stop notice). 10 1 project manager; and Valentin Penkin, electrical wiring 2 supervisor. Martin Decl., Docket No. 21, ¶ 4. On December 20, 2010, Union representative Matt Maloon 4 visited Roosevelt Middle School and observed Holdvekht and Penkin 5 working without any accompanying Union workers. 6 Docket No. 21, ¶ 4; Maloon Decl., Docket No. 43, ¶ 11. 7 subsequently began the grievance procedures contained in the PLA 8 for ZEI’s work in October through December 2010. 9 Docket No. 21, ¶¶ 5-6; Maloon Decl., Docket No. 43, ¶ 12. 10 United States District Court For the Northern District of California 3 December 21, 2010, Maloon, on behalf of the Union, sent a 11 grievance letter to Horak. 12 D. 13 B-Side and Kalafati has stated that he received a copy of the 14 grievance. 15 Martin Decl., The Union Martin Decl., On Maloon Decl., Docket No. 43, ¶ 12, Ex. The face of the letter indicates that a copy was sent to Id.; Kalafati 2nd Decl., Docket No. 112-2, ¶ 6. The Union’s grievance alleged that, during this period, ZEI 16 failed to comply with the PLA’s referral process and that ZEI 17 failed to make contributions to the trust funds on behalf of the 18 employees who had worked on the project. 19 43, ¶ 12, Ex. D. 20 should have gone to Union workers and for employee benefit 21 contributions for all hours worked on the project. 22 grievance did not name B-Side as a respondent. 23 Maloon Decl., Docket No. The Union demanded payment for the wages that Id. The Id. On or about January 24, 2011, ZEI ordered labor from the 24 Union and journeyman electricians Wilberto Cuellar-Arandia and 25 Douglas R. Lindsey were dispatched to the Roosevelt Middle School 26 fire alarm replacement job. 27 28 Maloon Decl., Docket No. 43, ¶ 14. The JAC held an evidentiary hearing on January 31, 2011 on the Union’s grievance about the October through December 2010 11 1 violations and subsequently accepted written briefs from the 2 parties. 3 ZEI had not disputed “that hours were worked in violation of the 4 PLA” and disputed only the amount of money for which it should be 5 liable. 6 its employees were exempt from coverage by the PLA, because they 7 performed managerial work. 8 the Union was seeking to recover “double benefits” to the trust 9 funds instead of the amount that the trust funds would have Id. at ¶ 15. According to the JAC’s written decision, Id. at ¶ 17, Ex. G (JAC Decision), 5. Id. at 2-3. ZEI argued that ZEI also contended that United States District Court For the Northern District of California 10 received had ZEI complied with the PLA, because the Union sought 11 one award for the benefits contribution and a second award for 12 wages, which also included a benefits contribution. 13 Finally, ZEI argued that it should be penalized only for the 14 number of hours that Union workers would have worked had ZEI 15 complied with the referral process. 16 Id. at 5-6. Id. at 3-4, 6. Kalafati attended the JAC evidentiary hearing as a 17 representative of B-Side. 18 ¶ 8. 19 at the evidentiary hearing “for” ZEI. 20 attests that he “did not participate in the hearing or submissions 21 to the JAC other than to assure the representatives of the Local 22 595 that going forward B-Side would oversee ZEI’s compliance with 23 the Project Labor Agreement and offer a compromise payment to the 24 Union.” 25 Kalafati Reply Decl., Docket No. 117-1, ¶ 2. 26 “did not advocate for ZEI” and “did not offer any testimony in 27 ZEI’s defense.” Kalafati 2nd Decl., Docket No. 112-2, The JAC award issued subsequently noted that he had appeared JAC Decision, 1. Kalafati Kalafati 2nd Decl., Docket No. 112-2, ¶ 8; see also He states that he Kalafati 2nd Decl., Docket No. 112-2 ¶ 8. 28 12 1 On or about February 18, 2011, B-Side submitted to the trust 2 funds reports of hours worked under the PLA by ZEI employees for 3 the month of January 2011. 4 E. 5 contributions on behalf of Cuellar-Arandia and Lindsey for 6 thirty-two hours of work each. 7 or about February 20, 2011, the Union received a timely check from 8 ZEI in the amount of $1,961.88, which the Union forwarded to the 9 trust funds. Maloon Decl., Docket No. 43, ¶ 16, Ex. The reports stated that ZEI owed $1,961.88 in fringe benefit Id.; Horak/ZEI Depo., Ex. 35. On Maloon Decl., Docket No. 43, ¶ 16, Ex. F; Horak/ZEI United States District Court For the Northern District of California 10 Depo., Ex. 35. 11 Cuellar-Arandia and Lindsay each worked eight hours for ZEI during 12 the month of January, which ZEI did not report and for which ZEI 13 did not make fringe benefit contributions. 14 37-38. 15 the project in January 2011, which ZEI did not report and for 16 which ZEI did not make fringe benefit contributions, though 17 payment of these contributions was required by the PLA. 18 19 20 21 22 23 24 25 26 27 28 In addition to the thirty-two hours reported, Horak/ZEI Depo., Exs. ZEI’s employee, Penkin, also worked thirty-two hours on Id. The JAC issued its written decision on or about February 22, 2011. Maloon Decl., Docket No. 43, ¶ 17. The JAC stated in part, The JAC considered both the position of the UNION and the EMPLOYER with regard to the payment of Trust Fund benefits on behalf of workers of Zoom Electric, Inc. that worked[] hours in violation of the PLA. The EMPLOYER states that the payment of hours represents a payment of “double benefits” to the UNION. In fact, after review of Article IX, Wages, Benefits And Working Conditions, it is clear to the JAC that the benefit payments [do] not go to the benefit of the Union, but rather, specifically they go to the benefit of workers who are entitled to the accrued benefits of such contributions. For the JAC to not acknowledge that fact would contribute to further victimization of those workers. The JAC also considered the position taken by the EMPLOYER which would only penalize a violating contractor for hours in the proper ratio as required by 13 1 2 3 4 Article VIII, Referral. . . . To accept this premise would be to accept a significant flaw with regard to enforcement of the PLA. Employers that violated the PLA with regard to proper dispatch would only be held to account, as if they had properly dispatched and had not violated the PLA. That would only create an enticement to violate the PLA . . . JAC Decision, 5-6. The JAC also credited the Union’s argument 5 that a worker’s title did not determine the actual work being 6 performed and that, if an otherwise management or executive 7 employee performed non-management tasks, those hours would be 8 covered by the PLA. Id. at 3-6. In so finding and rejecting 9 ZEI’s argument that some of the hours worked should have been 10 United States District Court For the Northern District of California considered exempt by the PLA as managerial work, the JAC found 11 there was a “credibility concern” for Horak’s testimony that the 12 majority of hours worked were management hours, which was 13 inconsistent with industry standards and not supported by 14 evidence. Id. at 6. The JAC noted, “Had the hours claimed to be 15 Management Hours been accompanied with evidence during the 16 Evidentiary Hearing and had the percentage been consistent with 17 industry standard, the JAC may have considered those hours as an 18 error, when listed on the Certified Payroll Records.” Id. The 19 JAC thus accepted ZEI’s certified payroll records, which were 20 signed under penalty of perjury by Horak, as a proper showing of 21 hours covered by the PLA. Id. 22 The JAC ordered ZEI to pay as follows: 23 24 25 26 Payment to workers on the IBEW 595 Available for Work list of 1648 hours totaling $116,299.36 Payment on behalf of employees of Zoom Electric, Inc. to the IBEW, 595 Trust Funds totaling $42,963.36 for hours worked in violation of the PLA. Id. at 6. 27 28 14 1 ZEI continued to employ Union labor until sometime in March 2 2011. 3 Cuellar-Arandia and Lindsey worked sixteen hours each and Penkin 4 worked thirty-two hours. 5 ZEI nor B-Side reported these hours to the trust funds or paid the 6 fringe benefit contributions owed on account of these hours. 7 Maloon Decl., Docket No. 43, ¶ 18. Maloon Decl., Docket No. 43, ¶ 18. During February 2011, Horak/ZEI Depo., Exs. 37-38. Neither 8 On April 6, 2011, ZEI filed the instant action seeking to 9 vacate the JAC award, and amended its pleadings on April 29, 2011. United States District Court For the Northern District of California 10 Docket Nos. 1, 11. 11 On May 6, 2011, the Union answered ZEI’s amended pleading and 12 filed a counter-complaint for confirmation and enforcement of the 13 JAC award against both ZEI and Horak. 14 Docket Nos. 15, 16. On May 25, 2011, the Union filed a stop notice action in 15 state court. 16 Union sought a court order pursuant to California Civil Code 17 section 3210, requiring OUSD to release to the Union an amount of 18 money equivalent to the arbitration award, which OUSD had withheld 19 from B-Side pursuant to a stop notice filed with it by the Union. 20 Id. 21 already paid ZEI and Horak approximately $123,000 of the total 22 subcontract price of $183,600. 23 112-2, ¶ 10. 24 enforce the stop notice, OUSD released the remaining approximately 25 $60,000 to B-Side, which in turn paid it to ZEI and Horak, less an 26 offset to cover B-Side’s legal fees in the state court action. 27 Id. 28 court action. RJN, Docket No. 107, Ex. A. In that action, the Prior to being served with the stop notice, B-Side had Kalafati 2nd Decl., Docket No. After the Union commenced the state court action to B-Side engaged Benjamin Martin to represent it in the state Kalafati 3rd Decl. ¶ 3. 15 Until recently, Martin 1 represented both ZEI and Horak in this action. 2 represented B-Side in this action when it was first made a party 3 to this case in 2012. 4 He also See Docket No. 91. On October 20, 2011, this Court granted the Union’s motion 5 for leave to file a first amended counter-complaint, adding a 6 second cause of action under the Employee Retirement Income 7 Security Act (ERISA), 29 U.S.C. §§ 1132, 1145. 8 that claim, the Union alleged that ZEI and Horak failed to make 9 benefit contributions for work performed under the PLA between United States District Court For the Northern District of California 10 Docket No. 54. In January and March 2011. 11 On November 18, 2011, the state court granted B-Side’s motion 12 for judgment on the pleadings in the stop notice action. 13 state court found that “the union was not statutorily authorized 14 to use the stop notice procedure to enforce its claims against ZEI 15 and its principals.” 16 reasoned that the state legislature had limited the stop notice 17 procedure to enforce claims “for materials, equipment, or services 18 furnished, or labor performed,” id. (quoting former Cal. Civil 19 Code § 3159), and the Union had not alleged facts that could 20 support a “reasonable inference that it provided materials or 21 equipment, or furnished services or labor, on the Project,” 22 at 2. 23 “by ZEI and its principals for denying its members the opportunity 24 to perform work on the project,” or “unperformed work.” 25 2-3. 26 of the ‘persons’ entitled to the benefit of the stop notice 27 remedy.” 28 appeal from the order. RJN, Docket No. 107, Ex. B, 3. The The court id. Instead, the Union sought to enforce a claim for money owed Id. at The court also noted that the Union was “not listed as one Id. The Union subsequently filed a timely notice of 16 1 On March 20, 2012, this Court granted the Union’s motion to 2 confirm and enforce the arbitration award against ZEI and Horak 3 and denied ZEI’s cross-motion to vacate the award. 4 The Court also denied ZEI and Horak’s motion to dismiss the 5 Union’s ERISA cause of action and granted the Union’s motion for 6 summary judgment on that claim against ZEI and Horak. 7 the Court granted the Union’s motion for leave to file a second 8 amended complaint, adding B-Side as a Counter-Defendant, and 9 various Counter-Plaintiffs. Docket No. 82. Finally, The Union and the other United States District Court For the Northern District of California 10 Counter-Plaintiffs sought to hold B-Side liable for both claims 11 pursuant to California Labor Code section 2750.5, as the employer 12 of the unlicensed ZEI. 13 to file a verified calculation of the damages requested in the 14 ERISA cause of action, specifically a calculation of the 15 contributions that ZEI failed to make, liquidated damages and 16 interest. 17 The Court also directed Counter Plaintiffs On March 27, 2012, Counter-Plantiffs filed a verified 18 calculation of damages on the second cause of action, showing 19 ZEI’s balance due on that date, including accrued interest, as 20 $3,581.41. 21 Docket No. 84. On June 27, 2012, the Court denied B-Side’s motion to dismiss 22 both claims against it. 23 motion through the attorney that it had shared with ZEI and Horak, 24 Benjamin Martin. 25 Docket No. 102. B-Side had brought this See Docket Nos. 90, 91. On July 24, 2012, B-Side filed a notice of substitution of 26 counsel in the instant case, substituting Attorney William C. 27 Last, Jr. for Martin. 28 represented in state court by Martin. Docket No. 103. 17 B-Side continues to be 1 2 The following day, on July 25, 2012, B-Side filed its answer to the second amended complaint. 3 Docket No. 104. Twenty-one days after filing its answer, on August 15, 2012, 4 B-Side brought a cross-claim for indemnification against Horak, 5 doing business as Zoom Electric. 6 Docket No. 105. On August 28, 2012, Horak filed a notice of substitution of 7 attorney removing Martin and substituting himself in pro per. 8 Docket No. 106. 9 United States District Court For the Northern District of California 10 On October 25, 2012, the Court held a hearing on the instant motions. 11 Docket No. 119. On December 3, 2012, thirty-nine days after the hearing, 12 B-Side moved for entry of default. 13 5, 2012, the Clerk entered default against Horak on B-Side’s 14 cross-claims. 15 Docket No. 120. On December Docket No. 122. On December 5, 2012, ZEI filed a notice of substitution of 16 counsel, removing Martin as its counsel and substituting Attorney 17 Eric Milliken in his place. 18 Docket No. 121. On December 11, 2012, Milliken filed a motion to set aside 19 Horak’s default, which was denied on January 17, 2013. 20 Nos. 125, 132. 21 22 On January 23, 2013, Horak filed for bankruptcy. 25 Docket No. 133. 23 24 Docket DISCUSSION I. Motion to Stay B-Side moves to stay the instant action, pending the 26 resolution of the appeal of the stop notice action in state court, 27 under the abstention doctrines addressed by the Supreme Court in 28 Louisiana Power & Light Co. v. City of Thibodaux, 360 U.S. 25 18 1 (1959), and Colorado River Water Conservation Dist. v. United 2 States, 424 U.S. 800 (1976). 3 A. Thibodaux abstention 4 In Thibodaux, the Supreme Court addressed abstention in 5 diversity cases. 6 such cases, a federal court is not permitted to abstain from 7 determining questions of state law necessary to deciding the cases 8 before it “merely because the answers to the questions of state 9 law are difficult or uncertain or have not yet been given by the In the absence of “exceptional circumstances” in United States District Court For the Northern District of California 10 highest court of the state.” 11 228, 234-235 (1943). 12 have been presented difficult questions of state law bearing on 13 policy problems of substantial public import whose importance 14 transcends the result in the case then at bar.” 15 424 U.S. at 814 (discussing Thibodaux). 16 Meredith v. Winter Haven, 320 U.S. Abstention only is “appropriate where there Colorado River, In Thibodaux, the city initiated an eminent domain proceeding 17 in state court, and the defendant removed the action to federal 18 court on the basis of diversity jurisdiction. 19 its own motion, the district judge decided to stay the proceedings 20 to allow the state court to interpret the relevant statute to 21 determine whether the city had the authority to take the subject 22 property. 23 judge’s decision, recognizing that the “special and peculiar 24 nature” of eminent domain proceedings, particularly in the case at 25 hand, which dealt with the “the nature and extent of delegation 26 . . . of governmental power between the city and state” and was 27 “intimately involved with the sovereign prerogative.” 28 Under Thibodaux, “the federal courts should abstain in diversity Id. at 26. 360 U.S. at 25. On The Supreme Court upheld the district 19 Id. at 28. 1 cases if there is uncertain state law and an important state 2 interest that is ‘intimately involved’ with the government’s 3 ‘sovereign prerogative.’” 4 (emphasis in original); see also Nature Conservancy v. Machipongo 5 Club, Inc., 579 F.2d 873, 875 (4th Cir. 1978) (reading this 6 doctrine “as permitting abstention in diversity cases where (1) 7 state law is unsettled, and (2) an incorrect federal decision 8 might embarrass or disrupt significant state policies.”). 9 Moore’s Federal Practice 3d § 122.03[5] Thibodaux abstention is inapplicable in this case, in which United States District Court For the Northern District of California 10 federal jurisdiction is not based on diversity of citizenship. 11 See Chemerinsky, Federal Jurisdiction § 12.2 (2007) (recognizing 12 that Thibodaux addresses abstention in diversity cases); Moore’s 13 Federal Practice 3d § 122.03 (same). 14 cited any case in which a court applied Thibodaux abstention 15 outside of the diversity context. 16 contends that “the Court’s jurisdiction in the instant case is 17 based upon supplemental jurisdiction” and that Thibodaux should 18 apply because state law is at issue, Mot. to Stay, 3 n.5; Reply in 19 Supp. of Mot. to Stay, 3 n.5, the Court already has determined 20 that its jurisdiction over the claims against B-Side are not based 21 on supplemental jurisdiction and instead arise under both federal 22 and state law. Notably, B-Side has not Further, although B-Side 23 B-Side previously moved to dismiss the first cause of action, 24 arguing that the federal claims have been adjudicated in this case 25 and that the Court lacks supplemental jurisdiction to decide 26 whether to hold it liable pursuant to California Labor Code 27 section 2750.5. The Court rejected this argument, stating, 28 20 1 2 3 4 5 6 7 8 9 The first counter-claim in this action is brought against all three Counter-Defendants, seeking to confirm and enforce the arbitration award under section 301 of the Labor-Management Relations Act [(LMRA)], 29 U.S.C. § 185 and holding B-Side liable for that violation through California Labor Code section 2750.5. . . . The theory of the counter-claim against B-Side is that the arbitration award should be confirmed and enforced pursuant to federal law against ZEI and that B-Side should be held liable for the award pursuant to state law. This is not two distinct claims, as B-Side characterizes it. For B-Side to be found liable for anything, the underlying liability based on federal law must be found as well as the obligation imputing that liability to B-Side directly. The claim against B-Side thus arises under both state and federal law. Docket No. 102, 4-5. Similarly, the second cause of action United States District Court For the Northern District of California 10 alleges that ZEI breached the collective bargaining agreement and 11 failed to make contributions to the Trust Funds, in violation of 12 § 301 of the LMRA and §§ 502 and 515 of ERISA, and that B-Side is 13 liable for this failure pursuant to state law. 14 order, the Court also held that, even if the claims against B-Side 15 were distinct from those against ZEI and Horak and arose under 16 state law, the Court has supplemental jurisdiction over them and 17 would not exercise its discretion to decline that jurisdiction. 18 Id. at 5-9.4 19 In the prior In addition, although there is no authority that is directly 20 on point regarding the applicability of California Labor Code 21 section 2750.5 to ERISA and LMRA claims, B-Side has not 22 articulated a basis for abstention that shows that the legal issue 23 in this case is “intimately involved” with “sovereign 24 4 25 26 27 28 However, even where a court has already considered its discretion under 28 U.S.C. § 1367(c) to weigh the values of judicial economy, comity, convenience and fairness and has determined that those interests would be best served by exercising jurisdiction over the claims, principles of abstention still may oblige a district court to stay or dismiss state law claims. See City of Chi. v. Int’l College of Surgeons, 522 U.S. 156, 174 (1997). 21 1 prerogative,” such as eminent domain, or that it bears “on policy 2 problems so important that they transcend the result in this 3 case.” 4 514, 517 (9th Cir. 1987). 5 to this effect, such as that the case will determine “what rights 6 . . . unions and their members have under state law against 7 contractors and other parties” for breach of project labor 8 agreements “by subcontractors which denied union members their 9 contractual right to work on that project,” and that “it is Kern-Tulare Water Dist. v. City of Bakersfield, 828 F.2d B-Side makes only conclusory statements United States District Court For the Northern District of California 10 difficult to see any statutory protection for workers who have not 11 worked on such projects.” 12 refers summarily to “California’s extensive regulation of 13 contractor-employee (‘laborer’) relationships, particularly for 14 public works projects” as a “matter of ‘substantial public 15 import,’” Reply in Supp. of Mot. to Stay, 4, it does not explain 16 how the questions actually presented in this case in particular 17 are of sufficient import to make this the exceptional case in 18 which abstention is required. 19 “difficult” is not enough to warrant abstention. 20 320 U.S. at 234-235. 21 Mot. to Stay, 4. Although B-Side Further, that the question may be See Meredith, Finally, this case deals with rights under federal law, 22 namely ERISA and the LMRA, as well as under state law. 23 federal court has exclusive jurisdiction over the ERISA cause of 24 action for delinquent benefits contributions, and thus a state 25 court would not be able to determine the interplay between ERISA 26 and California Labor Code section 2750.5. 27 28 The Accordingly, the Court DENIES B-Side’s request for a stay based on Thibodaux abstention. 22 1 B. Abstention under the Colorado River doctrine 2 Pursuant to the Colorado River doctrine, in situations 3 involving the contemporaneous exercise of jurisdiction by 4 different courts over sufficiently parallel actions, a federal 5 court has discretion to stay or dismiss an action based on 6 considerations of wise judicial administration, giving regard to 7 conservation of judicial resources and comprehensive disposition 8 of litigation. 9 parallel each other to invoke the Colorado River doctrine; it is 424 U.S. at 817. The two actions need not exactly United States District Court For the Northern District of California 10 enough that the two cases are substantially similar. 11 Marciano, 882 F.2d 1411, 1416 (9th Cir. 1989). 12 requirement of ‘parallel’ state court proceedings implies that 13 those proceedings are sufficiently similar to the federal 14 proceedings to provide relief for all of the parties’ claims.” 15 Intel Corp. v. Advanced Micro Devices, Inc., 12 F.3d 908, 913 n.4 16 (9th Cir. 1993). 17 to whether the state proceedings will resolve the federal action 18 precludes the granting of a [Colorado River] stay.” 19 Cent. Ariz. Water Conservation Dist., 418 F.3d 1028, 1033 (9th 20 Cir. 2005) (quoting Intel Corp., 12 F.3d at 913); see also Moses 21 H. Cone Hospital v. Mercury Constr. Corp., 460 U.S. 1, 28 (1983) 22 (“When a district court decides to dismiss or stay under Colorado 23 River, it presumably concludes that the parallel state-court 24 litigation will be an adequate vehicle for the complete and prompt 25 resolution of the issues between the parties. 26 substantial doubt as to this, it would be a serious abuse of 27 discretion to grant the stay or dismissal at all.”). Nakash v. However, “the Thus, “the existence of a substantial doubt as 28 23 Smith v. If there is any 1 In the case at hand, B-Side argues that “the entire basis for 2 B-Side’s liability is not federal labor law but the state’s laws 3 pertaining to licensing and liabilities of construction 4 contractors.” 5 discussed above, the Court has already rejected B-Side’s argument 6 that the claims asserted against it in this action arise only 7 under state law. 8 to be found liable for anything, the Court must find both the 9 underlying liability based on federal law and the obligation under Reply in Supp. of Mot. to Stay, 4. However, as The Court has previously held that, for B-Side United States District Court For the Northern District of California 10 state law imputing that liability to B-Side. 11 applicability of California Labor Code section 2750.5 is not a 12 separate claim, as B-Side continues to urge. 13 Thus, the Further, the second cause of action, which seeks compensation 14 for amounts other than in the arbitration award, is not at issue 15 at all in the state court action, which B-Side admits. 16 4. 17 for delinquent benefits contributions, which is within the 18 exclusive jurisdiction of the federal courts, and which cannot be 19 resolved by the state courts. 20 necessarily requires a determination by a federal court and not 21 the state court, and is not asserted in the state court action, 22 this Court cannot invoke the Colorado River doctrine to stay or 23 dismiss this action. 24 decision to invoke Colorado River necessarily contemplates that 25 the federal court will have nothing further to do in resolving any 26 substantive part of the case, whether it stays or dismisses”). 27 28 Reply at As noted above, the second cause of action is an ERISA claim Because that cause of action See Moses H. Cone, 460 U.S. at 28 (“the Finally, B-Side’s argument that the state court action will be determinative of the proper application of California Labor 24 1 Code section 2750.5 in this case is unpersuasive. 2 the state court’s interpretation of who can use the stop notice 3 procedure will resolve the interpretation of California Labor Code 4 section 2750.5. 5 different. 6 notice laws, this Court will still be required to interpret and 7 apply Labor Code section 2750.5, making a Colorado River stay 8 inappropriate, as noted above. B-Side contends However, the statutes themselves are very Even after the state court has interpreted the stop The state law provision at issue in this case provides, 10 United States District Court For the Northern District of California 9 14 There is a rebuttable presumption affecting the burden of proof that a worker performing services for which a license is required pursuant to Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code, or who is performing such services for a person who is required to obtain such a license is an employee rather than an independent contractor. Proof of independent contractor status includes satisfactory proof of these factors: 15 (a) . . . 16 (b) . . . 17 (c) . . . 18 In addition to the factors contained in subdivisions (a), (b), and (c), any person performing any function or activity for which a license is required pursuant to Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code shall hold a valid contractors’ license as a condition of having independent contractor status. 11 12 13 19 20 21 22 23 24 For purposes of workers’ compensation law, this presumption is a supplement to the existing statutory definitions of employee and independent contractor, and is not intended to lessen the coverage of employees under Division 4 and Division 5. 25 Cal. Labor Code § 2750.5. 26 also created “an employer-employee relationship between the 27 ultimate hirer and the employees of the unlicensed contractor.” 28 Rinaldi v. Workers’ Comp. Appeals Bd. (Rinaldi I), 196 Cal. App. Courts have found that this provision 25 1 3d 571, 574 (1987) (quoting Blew v. Horner, 187 Cal. App. 3d 1380, 2 1389 (1986)). 3 In contrast, the stop notice laws that were in effect at the 4 time the state court action was filed,5 which are contained in the 5 Civil Code, provide, “Except for an original contractor, any 6 person mentioned in Section 3110, 3111, or 3112, or in Section 7 4107.7 of the Public Contract Code, or furnishing provisions, 8 provender, or other supplies, may serve a stop notice upon the 9 public entity responsible for the public work in accordance with United States District Court For the Northern District of California 10 this chapter.” 11 former California Civil Code sections 3110, 3111 and 3112 appeared 12 in the section of the civil code that addresses what individuals 13 are entitled to mechanics’ liens. 14 various particular types of tradesmen and provided that they and 15 16 17 18 19 20 21 22 23 24 25 Cal. Civ. Code § 3181, repealed July 1, 2012. The Former section 3110 listed all persons and laborers of every class performing labor upon or bestowing skill or other necessary services on . . . a work of improvement shall have a lien upon the property upon which they have bestowed labor . . . for the value of such labor done . . . whether done or furnished at the instance of the owner or of any person acting by his authority or under him as contractor or otherwise. Cal. Civ. Code § 3110, repealed July 1, 2012. Former Civil Code section 3089 defined laborer as “any person who, acting as an employee, performs labor upon or bestows skill or other necessary services on any work of improvement,” including “any person or entity, including an express trust fund described in Section 3111, to whom a portion of the compensation of a laborer . . . is paid 26 5 27 28 Effective July 1, 2012, these provisions were recodified. B-Side contends, and Counter-Plaintiffs do not dispute, that the recodification does not affect the pending state court action. Mot. to Stay, 7 n.8. 26 1 by agreement with that laborer or the collective bargaining agent 2 of that laborer.” Cal. Civ. Code § 3089, repealed July 1, 2012. 3 A finding that, under these provisions, the stop notice 4 procedures can be only used to recover compensation for labor that 5 was actually performed is not determinative of whether, under 6 Labor Code section 2750.5, a general contractor can be held 7 responsible for an unlicensed subcontractor’s failure to pay 8 benefits on behalf of its workers under a collective bargaining 9 agreement or wages to laborers who should have been hired under United States District Court For the Northern District of California 10 such an agreement but were not. 11 stop notice laws are useful for interpretation of Labor Code 12 section 2750.5 and notably, in its arguments about the proper 13 interpretation of the latter in the cross-motions for summary 14 judgment, B-Side does not once cite the stop notice provisions. It also does not appear that the 15 Accordingly, because the state case is not “an adequate 16 vehicle for the complete and prompt resolution of the issues 17 between the parties,” Moses H. Cone, 460 U.S. at 28, the Court 18 DENIES B-Side’s motion to stay under the Colorado River doctrine. 19 II. 20 21 Cross-Motions for Summary Judgment A. Legal Standard Summary judgment is properly granted when no genuine and 22 disputed issues of material fact remain, and when, viewing the 23 evidence most favorably to the non-moving party, the movant is 24 clearly entitled to prevail as a matter of law. 25 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); 26 Eisenberg v. Ins. Co. of N. Am., 815 F.2d 1285, 1288-89 (9th Cir. 27 1987). 28 27 Fed. R. Civ. P. 1 The moving party bears the burden of showing that there is no 2 material factual dispute. 3 true the opposing party’s evidence, if supported by affidavits or 4 other evidentiary material. 5 815 F.2d at 1289. 6 in favor of the party against whom summary judgment is sought. 7 Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 8 587 (1986); Intel Corp. v. Hartford Accident & Indem. Co., 952 9 F.2d 1551, 1558 (9th Cir. 1991). United States District Court For the Northern District of California 10 Therefore, the court must regard as Celotex, 477 U.S. at 324; Eisenberg, The court must draw all reasonable inferences Material facts which would preclude entry of summary judgment 11 are those which, under applicable substantive law, may affect the 12 outcome of the case. The substantive law will identify which 13 facts are material. Anderson v. Liberty Lobby, Inc., 477 U.S. 14 242, 248 (1986). 15 16 B. Discussion Counter-Plaintiffs argue that the Court need only determine 17 that B-Side is legally responsible under California Labor Code 18 section 2750.5 for the liabilities that the Court previously found 19 against ZEI and Horak for the arbitration award and the failure to 20 make benefit contributions for work performed in January through 21 March 2011. 22 B-Side responds that the Court’s Order adjudicating these 23 claims against ZEI and Horak are not binding upon it because it 24 was not a party to the case at that point and is not in privity 25 with ZEI or Horak. 26 privity with ZEI or Horak. 27 makes B-Side responsible for liabilities incurred by them. However, it is not necessary that B-Side be in It is Labor Code section 2750.5 that 28 28 1 B-Side also contends that Counter-Plaintiffs have not offered 2 any evidence that the arbitration award is correct or that ZEI 3 failed to make benefits contributions for work performed in 4 January through March 2011. 5 substantial evidence in connection with the prior motions and 6 incorporated the record into this motion by reference. 7 Court takes into account all of the evidence that it considered 8 when deciding to adjudicate these claims in the Union’s favor and 9 against ZEI and Horak previously. However, the Union submitted Thus, the The Court need only determine United States District Court For the Northern District of California 10 whether the new evidence and arguments raised by B-Side warrant a 11 different decision. 12 As previously noted, a finding against B-Side on each claim 13 consists of two parts: first, a finding of liability against ZEI 14 under federal law; and second, a finding that the liability is 15 imputed to B-Side under state law. 16 1. Federal Jurisdiction 17 B-Side argues that Counter-Plaintiffs have made no showing 18 that “the PLA is a ‘collective bargaining agreement’” and 19 therefore that the “Court has subject matter jurisdiction under 20 the NLRA as pled in the SACC.” 21 Mot. for Summ. J. and Cross-Mot. 5. 22 subject matter jurisdiction under ERISA as to the second cause of 23 action. 24 B-Side’s Opp. to Counter-Pls.’ B-Side has not challenged The LMRA covers suits “for violation of contracts between an 25 employer and a labor organization representing employees in an 26 industry affecting commerce as defined in this Act, or between any 27 such labor organizations.” 28 PLA and other relevant agreements in the record are such 29 U.S.C. § 185. 29 On their faces, the 1 contracts. 2 it does not have jurisdiction over the first cause of action. 3 Accordingly, the Court rejects B-Side’s argument that 2. B-Side’s liability for unpaid benefits contribution for work performed in January through March 2011 4 The Court previously found that the evidence in the record 5 6 was sufficient to show that ZEI had failed to make required 7 benefits contributions for work performed in January and February 8 2011. 9 supporting it is a verified statement showing a calculation of the B-Side now claims that the “only evidence in the record United States District Court For the Northern District of California 10 amount of the claim,” and that Counter-Plaintiffs have submitted 11 no evidence pertaining to this claim. 12 is inaccurate. 13 the Court granted summary judgment on this claim, at the request 14 of the Court to facilitate the calculation of the amount of 15 damages, although the relevant information was already in the 16 record. Reply at 9. However, this In fact, that document was only submitted after 17 In the prior summary judgment order, the Court found that 18 Counter-Plaintiffs had offered evidence that, in January 2011, two 19 Union members, Wilberto Cuellar-Arandia and Douglas R. Lindsey 20 each worked eight hours for ZEI on the Roosevelt Middle School 21 project, that ZEI’s employee, Valentin Penkin, also worked thirty- 22 two hours on the project in January 2011, and that, during 23 February 2011, Cuellar-Arandia and Lindsey worked sixteen hours 24 each and Penkin worked thirty-two hours. 25 also Horak Depo., Docket No. 70-6, Ex. 38 (payroll records for 26 January 31, 2011 through February 6, 2011). 27 that Counter-Plaintiffs provided evidence that neither ZEI nor 28 B-Side reported these hours or made fringe benefits contributions 30 Docket No. 82, 6-7; see The Court also found 1 for them, although payment of these contributions was required by 2 the PLA. 3 43, ¶ 18. 4 the required benefits contributions were not made during this time 5 period, and B-Side has not offered evidence to create a material 6 dispute of fact. 7 Docket No. 82, 6-7; see also Maloon Decl., Docket No. Thus, there is sufficient evidence in the record that In addition, the verified calculation of damages is 8 admissible evidence of the amount of damages suffered. 9 authenticated under penalty of perjury by the administrator for It was United States District Court For the Northern District of California 10 the Trust Funds and shows a calculation of the contributions 11 required for the above hours, the liquidated damages and the 12 interest accumulated through the date on which it was signed. 13 figures underlying these calculations--the aggregate trust fund 14 contribution rate for Union journeymen during the relevant time 15 period, the number of hours worked during the time period, the 16 percentage for liquidated damages, and the interest rate--are all 17 part of the record, and are contained in the PLA, schedules and 18 time sheets. 19 that the calculation itself is erroneous. 20 The B-Side has not presented any argument or evidence Further, there is no material dispute of fact that B-Side 21 should be held liable for this claim. 22 have held that Labor Code section 2750.5, quoted above, “operates 23 to conclusively determine that a general contractor is the 24 employer of not only its unlicensed subcontractors but also those 25 employed by the unlicensed subcontractors.” 26 Inc. v. Cerda, 175 Cal. App. 4th 430, 434-35 (2009) (quoting Hunt 27 Bldg. Corp. v. Bernick, 79 Cal. App. 4th 213, 220 (2000) 28 (collecting cases)); see also Blew, 187 Cal. App. 3d at 1389 31 California state courts Sanders Const. Co., 1 (“among the consequences which flow from a determination that a 2 person is an employee rather than an independent contractor is 3 that an employer-employee relationship exists between the hirer of 4 the employee and those whom the employee has hired to do the 5 hirer’s work”). 6 workers’ compensation liability for the subcontractor’s employees 7 will be imposed on the general contractor as a matter of law.’” 8 Hunt, 79 Cal. App. 4th at 220 (quoting Rinaldi I, 196 Cal. App. 3d 9 at 574). “Thus, where a ‘subcontractor is unlicensed, “Similarly, a general contractor is liable to [the United States District Court For the Northern District of California 10 California Employment Development Department] for unpaid 11 contributions [to unemployment and disability insurance funds] and 12 withholding taxes for its unlicensed subcontractor’s employees.” 13 Id. (citations omitted); see also Sanders Const., 175 Cal. App. 14 4th at 434-35 (holding that a general contractor may be held 15 liable for the unpaid wages of workers hired by an unlicensed 16 company that is its subcontractor). 17 B-Side acknowledges that it subcontracted with ZEI, the 18 corporate entity, and that ZEI was unlicensed from January through 19 March 2011 when ZEI employed Cuellar-Arandia, Lindsey and Penkin 20 to perform work on the Roosevelt Middle School project. 21 also concedes that ZEI was required to be licensed. 22 operation of section 2750.5, B-Side, the general contractor, is 23 the employer of Cuellar-Arandia, Lindsey and Penkin. 24 provides that the employing contractor is required to “pay 25 contributions to the established vacation, pension or other form 26 of deferred compensation plan, apprenticeship, and health benefit 27 funds for each hour worked on the Project.” 28 Maloon Decl., Docket No. 43, Ex. B § 6.04(b) (“The Employer agrees 32 B-Side Thus, by The PLA PLA ¶ 9.1; see, e.g., 1 to pay the amount specified in Appendix A for each hour worked by 2 all employees working under the terms of this Agreement in and to 3 said Pension Trust . . .”). 4 In Hunt, the California Court of Appeal held that a general contractor was liable for contributions to state disability and 6 unemployment funds that its unlicensed subcontractors had failed 7 to make on behalf of their employees. 8 223. 9 employers to contribute to the unemployment fund based on wages 10 United States District Court For the Northern District of California 5 paid to their employees and to withhold employees’ contributions 11 to the disability fund from their wages. 12 “where an independent contractor performs services for a 13 principal, the principal is not required to withhold taxes or make 14 contributions.” 15 rendered the unlicensed subcontractors and their employees to be 16 the employees of the general contractor, the general contractor 17 was required to withhold taxes and make contributions on behalf of 18 the subcontractors and their employees. 19 have also found the general contractor responsible for any 20 liabilities that it would otherwise have as the employer of the 21 unlicensed subcontractor’s employees, such as workers’ 22 compensation claims, contributions to unemployment funds and 23 wages. 24 (wages; collecting cases); Zellers v. Playa Pacifica, Ltd., 61 25 Cal. App. 4th 129, 132-134 (1998) (workers’ compensation 26 benefits). 27 28 Hunt, 79 Cal. App. 4th at The court noted that state law placed the obligation on Id. Id. at 219. However, The court found that, because section 2750.5 Id. at 223. Other courts See, e.g., Sanders Const., 175 Cal. App. 4th at 434-35 Similarly, here, the PLA and Schedule A require the employing contractor to make contributions to the trust funds on behalf of 33 1 its employees. 2 the employees of B-Side by statute. 3 the unpaid benefits contributions for these employees. 4 Because ZEI was unlicensed, ZEI’s employees were Thus, B-Side is liable for In response, B-Side argues that the “Court should pierce ZEI’s corporate veil for the purpose of assessing B-Side’s 6 liability.” 7 because the Court pierced ZEI’s corporate veil to find Horak 8 individually liable for the judgments against ZEI, the Court 9 should pierce the veil for all purposes, with the result “that B- 10 United States District Court For the Northern District of California 5 Side was doing business with a licensed contractor because it is 11 undisputed that the entire time that Horak worked on the subject 12 project he was individually licensed as an electrical contractor.” 13 B-Side’s Opp. to Counter-Pls.’ Mot. for Summ. J. and Cross-Mot. 14 11. 15 that it is not contending that the Court should deem ZEI to be 16 licensed, but instead that, because B-Side knew that Horak was 17 licensed and thought it was doing business with him and not ZEI, 18 the Court should not find that B-Side liable “in the interests of 19 justice.” 20 Reply at 9. Specifically, B-Side contends that, However, in its reply, B-Side changes its request, stating Although B-Side may be able to prevail on its cross-claim for 21 indemnification against Horak, B-Side cites no authority for 22 piercing the corporate veil to thwart section 2750.5. 23 result would contravene clear California law that a corporation is 24 a separate legal entity from its officers and does not gain a 25 license simply because an officer is separately licensed. 26 e.g., Opp v. St. Paul Fire & Marine Ins. Co., 154 Cal. App. 4th 27 71, 76-80 (2007) (a corporation may not claim “substantial 28 compliance” with the licensing requirement if it has never been 34 Such a See, 1 licensed within the state of California, even if its managing 2 officer and sole owner was duly licensed throughout the relevant 3 time period); WSS Indus. Constr., Inc. v. Great West Contractors, 4 Inc., 162 Cal. App. 4th 581, 596 (2008) (reaching the same 5 conclusion, irrespective of the president’s licensing history, 6 good faith or competence). 7 Further, to hold that the general contractor could escape 8 obligations to the subcontractor’s employees under section 2750.5 9 because the subcontractor acted in bad faith disregards the United States District Court For the Northern District of California 10 premise of the statute and places the consequences of Horak and 11 ZEI’s misrepresentation onto the employees and trust funds, which 12 would be denied the benefits contributions. 13 that, where a subcontractor has falsely represented his licensing 14 status to the general contractor, although the subcontractor may 15 be estopped from denying his independent contractor status, this 16 does not extend to the innocent employees of the subcontractor, 17 who may properly obtain workers’ compensation from the general 18 contractor. 19 II), 199 Cal. App. 3d 217, 224 (1988); Nick Hagopian Drywall v. 20 Workers’ Comp. Appeals Bd., 204 Cal. App. 3d 767, 772-773 (1988). 21 In so holding in Rinaldi II, the court recognized, 22 23 24 25 26 27 Courts have found See Rinaldi v. Workers’ Comp. Appeals Bd. (Rinaldi Although Labor Code section 2750.5 was not designed as a penalty . . ., it is the ultimate hiring contractor, rather than the injured worker or the [state Uninsured Employers Fund], who has the opportunity and incentive to check the credentials of the subcontractors he hires. By failing to do so, the hiring contractor not only aids and abets the unlicensed subcontractor but also sets in motion the chain of events whereby the injured worker is robbed of the protection provided to him by the workers’ compensation law. 28 35 1 Id. at 1226. 2 employees of their benefits under the PLA. 3 may have attempted to conceal ZEI’s unlicensed status from B-Side, 4 and B-Side may not have intended to hire an unlicensed 5 subcontractor, as between B-Side, the employees and the Trust 6 Funds, B-Side was in the best position to investigate ZEI’s 7 credentials. 8 opportunities: the bid letter from ZEI clearly stated “Zoom 9 Electric, Inc.” and B-Side could have noticed the removal of the Similarly, here, a contrary finding would rob the Although Horak and ZEI The undisputed record shows that B-Side had such United States District Court For the Northern District of California 10 license number and the change to ZEI’s name in the subcontractor’s 11 agreement had it reviewed that more carefully. 12 equities among the parties does not favor B-Side over the 13 employees and trust funds, which are entitled to the benefits 14 contributions. 15 Allocating Finally, B-Side argues that it would be inequitable to hold 16 it liable because it already disbursed to ZEI full payment for the 17 work done at the Roosevelt Middle School job and, if that result 18 is reached, it would be required to pay this amount again. 19 argument is unavailing. 20 required to do so, and it chose to make the final payments with 21 the knowledge that it might be held liable for this amount. 22 This B-Side makes no showing that it was This result is also consistent with certain public policy 23 considerations underlying section 2750.5. 24 noted that, at the time it was passed, “the Assembly Committee on 25 Labor, Employment and Consumer Affairs reported that the portion 26 of the bill containing Labor Code section 2750.5 would ‘provide 27 criteria for determining whether employers are avoiding payment of 28 their social insurance tax obligations by treating their employees 36 In Hunt, the court 1 as independent contractors’” and that it “would help end the 2 ‘subterranean economy’ where contractors hire unlicensed 3 subcontractors and pay them in cash, resulting in the ‘loss of 4 large sums in taxes, employee social insurance contributions, and 5 employee pension funds.’” 6 Com. on Labor, Employment & Consumer Affairs, Analysis of Assemb. 7 Bill 3249 (1977-1978 Reg. Sess.), 1). 8 Court of Appeal observed that the “same public policy 9 considerations regarding the subterranean economy” arise where “an 79 Cal. App. 4th at 222 (quoting Assem. In Sanders, the California United States District Court For the Northern District of California 10 unscrupulous general contractor could collude with an unlicensed 11 subcontractor to cheat workers hired by the subcontractor out of 12 their wages, plus all of the related benefits.” 13 at 435. 14 175 Cal. App. 4th Accordingly, the Court grants Counter-Plaintiffs’ motion for 15 summary judgment on the second cause of action and denies B-Side’s 16 cross-motion for summary judgment on it. 17 3. Confirmation of the Arbitration Award 18 B-Side argues that the arbitration award cannot be confirmed 19 with respect to it because it was not a party to the arbitration 20 proceedings and did not have an opportunity to contest them. 21 B-Side raises two issues with the arbitration proceedings and 22 award that it contends, had it been part of those proceedings, it 23 would have raised, and argues that this means that the arbitration 24 award should be vacated. 25 First, B-Side suggests that the evidentiary hearing of the 26 JAC was not conducted in compliance with the terms of the PLA. 27 B-Side states that Step One of the grievance procedure provides 28 that first “the Business Representative of the involved Local 37 1 Union or District Council, or his/her designee, and the 2 representative of the involved Contractor shall confer and attempt 3 to resolve the grievance.” 4 for Summ. J. and Cross-Mot. 8 (citing PLA § 12.2). 5 the JAC hearing comprised Step One of the procedure, B-Side 6 complains that the hearing was conducted by Barry Luboviski and 7 Gene Johnson, the latter included as the “contractor.” 8 B-Side asserts that Johnson was an employee of a consulting firm, 9 Davallier Sloan, and not a licensed contractor who worked on the United States District Court For the Northern District of California 10 11 project. B-Side’s Opp. to Counter-Pls.’ Mot. Implying that Id. Id. (citing Kalafati 2nd Decl. ¶ 8). This argument is unavailing for a number of reasons. The JAC 12 hearing was not part of Step One of the grievance process. 13 PLA § 12.2 (“Step 2: In the event that the representatives are 14 unable to resolve the dispute” in Step One, an involved party may 15 submit the grievance “to the Joint Administrative Committee”). 16 The grievance letter that constituted Step One of the procedure 17 was sent by a Union representative, Maloon, to a representative of 18 the involved contractor, Horak, and was also sent to Kalafati, on 19 behalf of B-Side. 20 requires that one member of the JAC Committee be a contractor. 21 Finally, the only evidence about Johnson’s employment or status 22 that B-Side has cited is inadmissible hearsay within Kalafati’s 23 declaration. See B-Side cites nothing in the record that 24 Second, B-Side argues that Horak was an executive or 25 managerial employee and thus that the hours that he worked were 26 not subject to the PLA, such that the JAC’s award of fringe 27 benefits to the Union on his behalf was improper. 28 that the JAC simply ignored the provision of the PLA that excluded 38 B-Side contends 1 from its coverage executives and managerial employees. 2 Opp. to Counter-Pls.’ Mot. for Summ. J. and Cross-Mot. 10-11 n.10. 3 B-Side does not raise the same argument as to the hours worked by 4 the other two employees. 5 B-Side’s B-Side’s assertion that the arbitrators ignored this provision is inaccurate. 7 JAC, which considered and rejected it. 8 excluded from its coverage executive and managerial employees only 9 when they performed work within those job descriptions, not tasks 10 United States District Court For the Northern District of California 6 that would normally be performed by a laborer who would be covered 11 by the PLA. 12 credible evidence that any work performed by Horak was actually 13 managerial. 14 the PLA and thus is entitled to judicial deference. 15 presents no such evidence either. 16 to raise a material dispute of fact that the JAC award should not 17 be confirmed. 18 This argument was brought up before the The JAC found that the PLA The JAC found that ZEI and Horak did not submit This conclusion is a “plausible interpretation” of B-Side Accordingly, B-Side has failed B-Side contends that it should not be held liable for the 19 portion of the JAC award that was for “Payment on behalf of 20 employees of Zoom Electric, Inc. to the IBEW, 595 Trust Funds 21 totaling $42,963.36 for hours worked in violation of the PLA.” 22 This portion of the award was intended to compensate for the 23 unpaid fringe benefits contributions to the trust funds on behalf 24 of those ZEI employees who actually worked on the Roosevelt Middle 25 School project during the relevant time period, including Horak. 26 As discussed above, by operation of section 2750.5, B-Side is the 27 employer of these three ZEI employees. 28 authority discussed above, B-Side is liable for the unpaid 39 Accordingly, under the 1 benefits contributions that were required to be made on their 2 behalf. 3 B-Side contends that it cannot be held liable for this amount 4 for several reasons. 5 meant to operate for the benefit of the employees of the 6 unlicensed subcontractor, so it cannot be used to require B-Side 7 to make payments to the trust funds in the absence of evidence 8 that the trust funds will in fact pay these amounts to those 9 employees. First, it argues that section 2750.5 is However, B-Side offers no authority to support that United States District Court For the Northern District of California 10 only the employees themselves may benefit from section 2750.5 or 11 that evidence must be offered that the employee will directly 12 benefit from its operation. 13 such requirement. 14 Side, as the general contractor, the employer of ZEI’s employees. 15 Thus, B-Side has the same legal responsibilities with respect to 16 these individuals as it would with respect to any other employees. 17 In addition, part of the intent underlying section 2750.5 was to 18 ensure that the use of unlicensed subcontractors would not result 19 in substantial loss in contributions to employee social insurance 20 and pension funds and to further the public policy of ensuring 21 that such funds are properly funded. 22 at 222-23. 23 general contractor liable for unpaid contributions to funds meant 24 to provide benefits for persons who are unemployed through no 25 fault of their own or through injury or sickness. 26 at 218. 27 show the individual employee will directly obtain a benefit 28 immediately or in the future. The text of the statute creates no As previously stated, section 2750.5 makes B- See Hunt, 79 Cal. App. 4th Other courts have held that section 2750.5 makes a See, e.g., id. These cases do not discuss any requirement that the fund Unemployment and disability 40 1 insurance contributions are not earmarked for individuals and 2 there is no guarantee that participating eligible employees will 3 become unemployed or disabled. 4 B-Side also argues that it should not be required to pay the 5 portion of the $42,963.36 component of the JAC award that is 6 attributable to Horak’s labor. 7 cannot be used to make him its employee because he himself held a 8 contractor’s license, even though ZEI did not. 9 irrelevant to the operation of section 2750.5 here that Horak It contends that section 2750.5 However, it is United States District Court For the Northern District of California 10 himself had a license. 11 the B-Side because it was unlicensed and makes B-Side liable for 12 ZEI’s unmet obligations for its employees. 13 had not met its obligation to pay the benefits contributions on 14 behalf of its employees who worked on the project, including 15 Horak, and, as previously stated, B-Side has offered no evidence 16 to dispute its conclusion. 17 4th 994 , 1004-06 (2008), B-Side also argues that Horak is estopped 18 from collecting compensation from it because he affirmatively 19 represented ZEI’s contractor’s licensing status. 20 court held, based on estoppel, that an individual who had himself 21 misrepresented his licensing status to a company could not 22 maintain certain causes of action against that company that were 23 dependent on a finding that he was an employee of the company 24 rather than its independent contractor. 25 at 1002-06. 26 estoppel extends to trust funds seeking unpaid contributions to 27 employee funds. The code section makes ZEI the employee of The JAC found that ZEI Citing Chin v. Namvar, 166 Cal. App. In Chin, the Chin, 166 Cal. App. 4th However, B-Side offers no authority that this 28 41 1 B-Side also disputes its liability for the portion of the JAC 2 award that was for “Payment to workers on the IBEW 595 Available 3 for Work list of 1648 hours totaling $116,299.36.” 4 of the award was intended to compensate workers who would have 5 been eligible to work on the project but who were not employed 6 because of ZEI’s failure to abide by the PLA’s referral 7 provisions. 8 employees of ZEI but were not, because of ZEI’s malfeasance. 9 Side argues that section 2750.5 cannot operate to make these This portion Thus, it compensated individuals who would have been B- United States District Court For the Northern District of California 10 individuals its employees because that code section affects the 11 burden of proof for “a worker performing services for which a 12 license is required” and these individuals did not perform 13 services on the Richmond Middle School project. 14 that, as a result, it is not responsible for ZEI’s injury to these 15 third parties. 16 B-Side contends However, ZEI did perform services for which a license was 17 required, did not have a license and, by operation of section 18 2750.5, was made an employee of B-Side at the time that it caused 19 the injury to these third parties for which this portion of the 20 award was intended to compensate. 21 does not affect employment status only in cases seeking recovery 22 of wages and benefits. 23 the hearing, at least one California court has found the code 24 section applicable to tort cases involving injuries to third 25 parties. 26 (1983) (concluding, however, that it was not retroactive). 27 Foss, a company hired an unlicensed partnership to excavate a 28 swimming pool site, work for which a license was required. On its face, section 2750.5 As pointed out by Counter-Plaintiffs at See Foss v. Anthony Industries, 139 Cal. App. 3d 794 42 In Id. at 1 796-97. 2 and killed a motorcyclist. 3 motorcyclist’s estate brought suit against the company and the 4 partnership. 5 applied only in workers’ compensation cases, not in tort, and 6 granted nonsuit in favor of the company. 7 of Appeal reversed, finding that it applied both to workers’ 8 compensation and tort cases. 9 noted that it was “clear the basic provisions of the Labor Code on A truck driven by an employee of the partnership struck Id. Id. at 796. The administrator of the The trial court concluded that section 2750.5 Id. at 797. Id. at 797-99. The Court The appellate court United States District Court For the Northern District of California 10 employee status are not limited to cases involving disputes 11 between employer and employee” and that such provisions have long 12 been cited “on employment status in tort cases involving injuries 13 to third parties.” 14 public policy” supported the application of section 2750.5 in such 15 instances because it was “consistent with the reasoning of 16 imposing vicarious liability under the doctrine of respondeat 17 superior” upon an employer for the torts of an independent 18 contractor, including that “he is the party primarily benefited by 19 it, that he selects the contractor, is free to insist upon one who 20 is financially responsible, and to demand indemnity from him.” 21 Id. at 799. 22 policy approach to deny “an employer the opportunity to raise the 23 independent contractor defense if he has hired a worker who has 24 not shown the competence and financial responsibility 25 prerequisites to obtaining a contractor’s license.” 26 Similarly, here, section 2750.5 applies to make B-Side the 27 employer of ZEI and thus responsible for ZEI’s failure to hire Id. at 798. The court recognized that “strong The court concluded that it was consistent with that 28 43 Id. 1 laborers for the project in compliance with the provisions of the 2 PLA, to which both B-Side and ZEI were parties. 3 Accordingly, the Court grants Counter-Plaintiffs’ motion for 4 summary judgment on the first cause of action and denies B-Side’s 5 cross-motion for summary judgment on it. 6 7 CONCLUSION For the reasons set forth above, the Court DENIES B-Side’s 8 motion to stay (Docket No. 107), GRANTS Counter-Plaintiffs’ motion 9 for summary judgment (Docket No. 108) and DENIES B-Side’s United States District Court For the Northern District of California 10 11 cross-motion for summary judgment (Docket No. 112). This Order resolves all remaining claims in this action, 12 except for those brought by B-Side against Counter-Defendant and 13 Cross-Defendant Vieko Horak. 14 Defendant Vieko Horak has filed for bankruptcy, the claims against 15 him are stayed pursuant to 11 U.S.C. § 362. 16 reason for delaying the other claims during the stay, the Court 17 directs the Clerk to enter partial judgment on the claims that do 18 not involve Horak, including the claims against B-Side and those 19 resolved in the Court’s Order of March 20, 2012, the Union’s 20 claims against ZEI and ZEI’s claim against the Union. 21 Plaintiffs shall recover their costs from ZEI and B-Side on a 22 joint and several basis. Because Counter-Defendant and Cross- Finding no just Counter- 23 Because the remaining claims are subject to an ongoing 24 automatic bankruptcy stay, there appears to be no further reason 25 to maintain the file as an open one at this time. 26 the Clerk is directed to close the file. 27 this Order shall be considered a dismissal or disposition of the 28 claims against Horak. Accordingly, Nothing contained in Should further proceedings regarding those 44 1 claims become necessary or desirable, any party may initiate it in 2 the same manner as if this Order had not been entered. 3 IT IS SO ORDERED. 4 5 6 Dated: 2/8/2013 CLAUDIA WILKEN United States District Judge 7 8 9 United States District Court For the Northern District of California 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 45

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