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

Filing 134

ORDER by Judge Claudia Wilken DENYING B SIDES 107 MOTION TO STAY, GRANTING COUNTER-PLAINTIFFS 108 MOTION FOR SUMMARY JUDGMENT, DENYING B-SIDES 112 CROSS-MOTION FOR SUMMARY JUDGMENT AND DIRECTING THE CLERK TO ENTER PARTIAL JUDGMENT. (Attachments: # 1 Certificate/Proof of Service) (ndr, COURT STAFF) (Filed on 2/8/2013)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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ZOOM ELECTRIC, INC.,

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Petitioner,
v.
INTERNATIONAL BROTHERHOOD OF
ELECTRICAL WORKERS, LOCAL 595,
and DOES 1-20,
Respondents.

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United States District Court
For the Northern District of California

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________________________________/

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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,

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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

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B-SIDE, INC.,

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Cross-Claimant,
v.
VEIKO HORAK, doing business as
ZOOM ELECTRIC,
Cross-Defendant.
________________________________/
Counter-Defendant B-Side, Inc. moves to stay proceedings

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pending resolution of a state court action between it and
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Counter-Plaintiff International Brotherhood of Electrical Workers,
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United States District Court
For the Northern District of California

Local 595 (the Union).

The Union and the other Counter-

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Plaintiffs, the employee benefit trust funds, Alameda County
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Electrical Industry Service Corporation (EISC), which is the
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collection agent for the trust funds, and Victor Uno and Don
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Campbell, who are trustees for the trust funds and officers of
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EISC, oppose the motion to stay and move for summary judgment on
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their claims against B-Side.

B-Side opposes Counter-Plaintiffs’

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motion for summary judgment and also moves for summary judgment.
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Having considered the papers filed by the parties and their
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arguments at the hearing, the Court DENIES B-Side’s motion to
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stay, GRANTS Counter-Plaintiffs’ motion for summary judgment and
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DENIES B-Side’s cross-motion for summary judgment.

This resolves

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all remaining claims in this action, except for those brought by
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B-Side against Counter-Defendant and Cross-Defendant Vieko Horak.
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Because Horak has filed for bankruptcy, the claims against him are
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stayed pursuant to 11 U.S.C. § 362.

Finding no just reason for

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delaying the other claims during the stay, the Court directs the
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Clerk to enter partial judgment on the claims that do not involve
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Horak, including Counter-Plaintiffs’ claims against B-Side and

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those resolved in the Court’s Order of March 20, 2012, which were

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the Union’s claims against Petitioner and Counter-Defendant Zoom

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Electric, Inc. (ZEI) and ZEI’s claim against the Union.

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BACKGROUND

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The following facts are taken from the evidence already in

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the record and that submitted by the parties in connection with

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the instant motions.

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ZEI was first incorporated in 2007.

Request for Judicial

United States District Court
For the Northern District of California

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Notice (RJN), Docket No. 27, Ex. D.

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suspended at all times relevant to this action, until it was

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revived on July 11, 2011.

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Ex. A.

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and its agent for service of process, and his address was the same

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as ZEI’s address.

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Horak has also been registered to do business under the fictitious

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business name “Zoom Electric” in the City and County of San

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Francisco. RJN, Docket No. 27, Ex. E.

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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),

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which governs the wages and hours, and terms and conditions of

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employment, for construction work at the Oakland Unified School

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District (OUSD).

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(PLA).

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Assent on behalf of ZEI, agreeing to be bound by the terms of the

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PLA while performing work on OUSD construction projects.

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Decl., Docket No. 43, ¶ 9, Ex. C; Martin Decl., Docket No. 21, ¶ 3

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& Ex. B.

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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.
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On ZEI’s

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Letter of Assent, Horak listed ZEI’s California contractor’s

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license number as C10 857743.

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Ex. C; Martin Decl., Docket No. 21, ¶ 3 & Ex. B.

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not ZEI’s but was Horak’s individual contractor’s license number,

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which was registered for him to do business under the fictitious

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name of “Zoom Electric.”

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Docket No. 27, Exs. A-C, E; Maloon Decl., Docket No. 43, ¶ 19.

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More than a year later, on September 12, 2011, ZEI applied for its

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own contractor’s license; the State rejected its application on

United States District Court
For the Northern District of California

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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.

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The PLA sets forth certain requirements with which

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contractors must comply to hire workers for covered projects,

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including that contractors must hire Union members who are out of

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work, in a one-to-one ratio with the contractor’s own employees;

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hiring of either must take place through a referral from the

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Union.

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first hire a Union worker, then may hire the contractor’s own

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qualified worker through a referral from the Union, then may hire

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a second Union worker, then a second of the contractor’s workers,

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and so on, until the contractor has a sufficient crew for the job

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or he has hired ten of his own workers.

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the contractor, the contractor’s employees must first apply to the

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Union to work on the project and must meet certain qualifications.

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Id.

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executives, managerial employees, engineering employees,

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supervisors . . .”

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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
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certain specified rates, in accordance with the PLA.

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¶¶ 9.3-9.4.

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established vacation, pension or other form of deferred

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compensation plan, apprenticeship, and health benefit funds for

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each hour worked on the Project” in certain specified amounts.

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Id. at ¶ 9.1.

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A, which consists of the Alameda County Inside Construction

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Agreement.

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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

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funds, which are among the Counter-Plaintiffs to this action.

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Maloon Decl., Docket No. 43, ¶ 7 & Ex. B.

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jointly managed by Union and employer trustees and are governed by

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written Trust Agreements.

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bound by the written terms of the Trust Agreements.

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Id.

The trust funds are

Signatories to the PLA agree to be
PLA ¶ 2.

The PLA further provides that it is “the responsibility of

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the Contractor(s) and Unions to investigate and monitor compliance

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with the provisions of the agreement” described above.

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X.

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be construed to interfere with or supersede the usual and

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customary legal remedies available to the Unions and/or employee

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benefit Trust Funds to collect delinquent Trust Fund contributions

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from Contractors on the Project.”

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PLA Art.

The PLA specifically states, “Nothing in this agreement shall

Id.

The PLA also establishes a “grievance arbitration procedure.”

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See id. at Art. XII.

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to resolve a dispute arising “out of the meaning, interpretation

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or application of the provisions of this Agreement, including the

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Schedule A agreements” by meeting and conferring about the dispute

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(Step 1), they are required to submit the dispute to the Joint

Under the procedure, if parties are unable

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Administrative Committee (JAC), which must meet “to confer in an

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attempt to resolve the grievance” (Step 2).

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If the dispute is not resolved within the time allowed for

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resolution by the JAC, either party may refer the dispute to an

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arbitrator within five days (Step 3).

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arbitrator must conduct a hearing on the dispute and give the

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parties a binding decision within five days after the hearing.

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Id.

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authority to change, amend, add to or detract from any of the

United States District Court
For the Northern District of California

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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

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project at Roosevelt Middle School in the OUSD, Project 7099.

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Kalafati 1st Decl., Docket No. 51, ¶ 1; Kalafati 2nd Decl., Docket

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No. 112-2, ¶ 3;1 Hwang Decl., Docket No. 108-1, Ex. A (B-Side’s

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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.
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Resp. to Requests for Admission), 3-4.

On August 18, 2010, Horak

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United States District Court
For the Northern District of California

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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.
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submitted a price quote to B-Side to provide certain services in

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connection with the Roosevelt Middle School job.

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Docket No. 70, Ex. F (Horak Depo. as Rule 30(b)(6) witness of ZEI,

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hereinafter Horak/ZEI Depo.), 19:16-20:24 & Ex. 5.

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of the quote listed “Zoom Electric, Inc.” and “Zoom Electric Lic.

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# 857743.”

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School as 1926 19th Avenue in Oakland, California.

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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

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California State University, East Bay.

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No. 112-2 ¶ 2; Horak/ZEI Depo. 22:14-21.

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subcontract for the California State University job,

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Kalafati, President and Responsible Managing Officer of B-Side,

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checked the website of the Contractors State License Board and saw

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that “Zoom Electric,” Horak’s fictitious business name, held a

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valid license.

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Kalafati does not state whether he checked the licensing status of

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Zoom Electric, Inc. as well.

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Kalafati 2nd Decl., Docket
Before awarding the
Anton

Kalafati 2nd Decl., Docket No. 112-2 ¶ 2.

Kalafati attests that, after deciding to award “Zoom

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Electric” the subcontract on the Roosevelt Middle School job, he

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sent Horak a version of B-Side’s standard subcontractor’s

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agreement by email.

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Kalafati attaches to his declaration a copy of the version of the

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agreement that he says he emailed to Horak, but not of the email

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itself.

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is identified in two places as “Zoom Electrical,” and the “License

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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

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Id.

The

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only address that appears for the property at issue in the job is

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“950 High Street Oakland CA.”

Id.

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Kalafati states in his declaration that Horak sent him an

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email stating “that the address of the project was incorrect,” and

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that Kalafati then emailed Horak “a corrected version which he

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brought to my office and signed.”

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112-2 ¶ 4.

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the document that he sent to Horak identified the subcontractor as

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“Zoom Electric,” the version Horak returned had “Inc.” added after

Kalafati further attests that, although the version of

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United States District Court
For the Northern District of California

Kalafati 2nd Decl., Docket No.

“Zoom Electric.”

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and Kalafati did not notice it.

Id.2

Horak did not tell Kalafati of this change
Id.

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However, in the signed version of the Subcontractor’s

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Agreement, dated August 19, 2010, the address remained “950 High

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Street Oakland CA” and was not changed.

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Also, no license number appears for the subcontractor.

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one part of the signed agreement, the subcontractor is referred to

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as “Zoom Electrical,” and in another part, it is identified as

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“Zoom Electric, INC.”

Id.

Horak/ZEI Depo., Ex. 5.
Id.

In

(capitalization in original).

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Kalafati attests that he noticed this interlineation sometime

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after the Union began the grievance procedure on December 21, 2010

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and he assumed it meant that the contracting party was ZEI, owned

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by Horak, and not Horak doing business as “Zoom Electric,” a sole

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proprietorship; however, he does not state exactly when he noticed

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this.

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Kalafati 2nd Decl., Docket No. 112-2, ¶ 6; Maloon Decl.,
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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.
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Docket No. 43, ¶ 12.

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late March 2011 that ZEI was not licensed.

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Docket No. 112-2, ¶ 6.

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the course of the work on the Roosevelt Middle School project, he

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assumed that B-Side had been dealing with “Zoom Electric,” a sole

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proprietorship, and corroborates this by offering checks that he

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made out to “Zoom Electric” throughout 2010 and 2011 and tax forms

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he addressed to “Vieko Horak, Zoom Electric” for those years.

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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

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However, the checks themselves do not corroborate Kalafati’s

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statement that he assumed he was dealing with a sole

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proprietorship; these exhibits include checks dated as recently as

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December 2011, long after Kalafati and B-Side learned of the

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distinction between ZEI and Zoom Electric, and had acknowledged

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that it had hired the former and not the latter.

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Ex. C2.3

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Kalafati’s understanding of the entity with which B-Side had

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contracted.

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Id. at ¶¶ 5, 6,

Thus, the checks were made out in this way regardless of

On October 14, 2010, three ZEI employees began electrical

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work on the Roosevelt Middle School project.

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No. 21, ¶ 4; Maloon Decl., Docket No. 43, ¶ 11.

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Horak, owner and Chief Executive Officer of ZEI; Aleh Holdvekht,

Martin Decl., Docket
These included:

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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).
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project manager; and Valentin Penkin, electrical wiring

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supervisor.

Martin Decl., Docket No. 21, ¶ 4.

On December 20, 2010, Union representative Matt Maloon

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visited Roosevelt Middle School and observed Holdvekht and Penkin

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working without any accompanying Union workers.

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Docket No. 21, ¶ 4; Maloon Decl., Docket No. 43, ¶ 11.

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subsequently began the grievance procedures contained in the PLA

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for ZEI’s work in October through December 2010.

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Docket No. 21, ¶¶ 5-6; Maloon Decl., Docket No. 43, ¶ 12.

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United States District Court
For the Northern District of California

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December 21, 2010, Maloon, on behalf of the Union, sent a

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grievance letter to Horak.

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D.

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B-Side and Kalafati has stated that he received a copy of the

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grievance.

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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

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failed to comply with the PLA’s referral process and that ZEI

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failed to make contributions to the trust funds on behalf of the

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employees who had worked on the project.

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43, ¶ 12, Ex. D.

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should have gone to Union workers and for employee benefit

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contributions for all hours worked on the project.

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grievance did not name B-Side as a respondent.

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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

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Union and journeyman electricians Wilberto Cuellar-Arandia and

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Douglas R. Lindsey were dispatched to the Roosevelt Middle School

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fire alarm replacement job.

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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
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violations and subsequently accepted written briefs from the

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parties.

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ZEI had not disputed “that hours were worked in violation of the

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PLA” and disputed only the amount of money for which it should be

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liable.

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its employees were exempt from coverage by the PLA, because they

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performed managerial work.

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the Union was seeking to recover “double benefits” to the trust

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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

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received had ZEI complied with the PLA, because the Union sought

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one award for the benefits contribution and a second award for

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wages, which also included a benefits contribution.

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Finally, ZEI argued that it should be penalized only for the

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number of hours that Union workers would have worked had ZEI

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complied with the referral process.

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Id. at 5-6.

Id. at 3-4, 6.

Kalafati attended the JAC evidentiary hearing as a

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representative of B-Side.

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¶ 8.

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at the evidentiary hearing “for” ZEI.

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attests that he “did not participate in the hearing or submissions

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to the JAC other than to assure the representatives of the Local

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595 that going forward B-Side would oversee ZEI’s compliance with

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the Project Labor Agreement and offer a compromise payment to the

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Union.”

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Kalafati Reply Decl., Docket No. 117-1, ¶ 2.

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“did not advocate for ZEI” and “did not offer any testimony in

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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.

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On or about February 18, 2011, B-Side submitted to the trust

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funds reports of hours worked under the PLA by ZEI employees for

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the month of January 2011.

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E.

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contributions on behalf of Cuellar-Arandia and Lindsey for

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thirty-two hours of work each.

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or about February 20, 2011, the Union received a timely check from

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ZEI in the amount of $1,961.88, which the Union forwarded to the

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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

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Depo., Ex. 35.

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Cuellar-Arandia and Lindsay each worked eight hours for ZEI during

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the month of January, which ZEI did not report and for which ZEI

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did not make fringe benefit contributions.

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37-38.

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the project in January 2011, which ZEI did not report and for

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which ZEI did not make fringe benefit contributions, though

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payment of these contributions was required by the PLA.

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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
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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

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contractor, including that “he is the party primarily benefited by

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it, that he selects the contractor, is free to insist upon one who

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is financially responsible, and to demand indemnity from him.”

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Id. at 799.

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policy approach to deny “an employer the opportunity to raise the

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independent contractor defense if he has hired a worker who has

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not shown the competence and financial responsibility

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prerequisites to obtaining a contractor’s license.”

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Similarly, here, section 2750.5 applies to make B-Side the

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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

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Id.

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laborers for the project in compliance with the provisions of the

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PLA, to which both B-Side and ZEI were parties.

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Accordingly, the Court grants Counter-Plaintiffs’ motion for

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summary judgment on the first cause of action and denies B-Side’s

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cross-motion for summary judgment on it.

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CONCLUSION
For the reasons set forth above, the Court DENIES B-Side’s

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motion to stay (Docket No. 107), GRANTS Counter-Plaintiffs’ motion

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for summary judgment (Docket No. 108) and DENIES B-Side’s

United States District Court
For the Northern District of California

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cross-motion for summary judgment (Docket No. 112).
This Order resolves all remaining claims in this action,

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except for those brought by B-Side against Counter-Defendant and

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Cross-Defendant Vieko Horak.

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Defendant Vieko Horak has filed for bankruptcy, the claims against

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him are stayed pursuant to 11 U.S.C. § 362.

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reason for delaying the other claims during the stay, the Court

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directs the Clerk to enter partial judgment on the claims that do

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not involve Horak, including the claims against B-Side and those

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resolved in the Court’s Order of March 20, 2012, the Union’s

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claims against ZEI and ZEI’s claim against the Union.

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Plaintiffs shall recover their costs from ZEI and B-Side on a

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joint and several basis.

Because Counter-Defendant and Cross-

Finding no just

Counter-

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Because the remaining claims are subject to an ongoing

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automatic bankruptcy stay, there appears to be no further reason

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to maintain the file as an open one at this time.

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the Clerk is directed to close the file.

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this Order shall be considered a dismissal or disposition of the

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claims against Horak.

Accordingly,

Nothing contained in

Should further proceedings regarding those
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claims become necessary or desirable, any party may initiate it in

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the same manner as if this Order had not been entered.

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IT IS SO ORDERED.

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Dated: 2/8/2013

CLAUDIA WILKEN
United States District Judge

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United States District Court
For the Northern District of California

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