Norton et al v. Assured Performance Network

Filing 34

MEMORANDUM DECISION AND ORDER Plaintiffs' motion for partial summary judgment (docket no. 26 ) is GRANTED. Plaintiffs are deemed employees under the FLSA and the Idaho law. Defendants' motion for summary judgment (docket no. 25 ) is DENIED. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (jp)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
MICHAEL NORTON and STEVEN
DELACUESTA,
Case No. 4:14-CV-486-BLW
Plaintiff,
MEMORANDUM DECISION AND
ORDER

v.
ASSURED PERFORMANCE NETWORK,
dba ASSURED PERFORMANCE
NETWORK, INC.,
Defendants.

INTRODUCTION
The Court has before it cross-motions for summary judgment. The Court held oral
argument on the motions on January 20, 2016, and took them under advisement at the
conclusion of the argument. For the reasons expressed below, the Court will grant the
plaintiffs’ motion, which the Court will treat as a motion for partial summary judgment,
and will deny the defendants’ motion.
FACTUAL BACKGROUND
Defendant Assured Performance Network, Inc., owns the Zeph Creek Ranch near
Lemhi Idaho. Assured’s CEO is defendant Scott Biggs. He hired plaintiffs to install a
sprinkler system, remodel buildings, fix fences, landscape yards, and do other similar
work on the ranch. At the time, the plaintiffs lived in California, and Biggs drove them in
his truck to the ranch in Idaho. They worked for Biggs from June 13, 2014, to July 15,
Memorandum Decision & Order – page 1

2014, at which time Biggs fired plaintiff Norton, prompting plaintiff Delacuesta to leave
with Norton.
The plaintiffs responded by bringing this lawsuit against Assured and Biggs
claiming that they violated the Fair Labor Standards Act (FLSA) by failing to pay the
required minimum wage and overtime. The plaintiffs also claim that defendants violated
Idaho law by failing to pay them their agreed-upon wages for the last week of their work.
Both sides have brought motions for summary judgment. The issue raised by both
motions is whether the plaintiffs are employees or independent contractors. If they are
employees, they are covered by the FLSA and the Idaho law; if they are independent
contractors, they are not covered by either law. The Court must decide whether this
determination can be made as a matter of law or whether its resolution must await a trial.
LEGAL STANDARDS
One of the principal purposes of the summary judgment “is to isolate and dispose
of factually unsupported claims . . . .” Celotex Corp. v. Catrett, 477 U.S. 317, 323-24
(1986). It is “not a disfavored procedural shortcut,” but is instead the “principal tool[ ] by
which factually insufficient claims or defenses [can] be isolated and prevented from
going to trial with the attendant unwarranted consumption of public and private
resources.” Id. at 327. “[T]he mere existence of some alleged factual dispute between
the parties will not defeat an otherwise properly supported motion for summary
judgment; the requirement is that there be no genuine issue of material fact.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).

Memorandum Decision & Order – page 2

The evidence must be viewed in the light most favorable to the non-moving party,
id. at 255, and the Court must not make credibility findings. Id. Direct testimony of the
non-movant must be believed, however implausible. Leslie v. Grupo ICA, 198 F.3d
1152, 1159 (9th Cir. 1999). On the other hand, the Court is not required to adopt
unreasonable inferences from circumstantial evidence. McLaughlin v. Liu, 849 F.2d
1205, 1208 (9th Cir. 1988).
The moving party bears the initial burden of demonstrating the absence of a
genuine issue of material fact. Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir.
2001)(en banc). To carry this burden, the moving party need not introduce any
affirmative evidence (such as affidavits or deposition excerpts) but may simply point out
the absence of evidence to support the nonmoving party’s case. Fairbank v. Wunderman
Cato Johnson, 212 F.3d 528, 532 (9th Cir.2000).
This shifts the burden to the non-moving party to produce evidence sufficient to
support a jury verdict in her favor. Id. at 256-57. The non-moving party must go beyond
the pleadings and show “by her affidavits, or by the depositions, answers to
interrogatories, or admissions on file” that a genuine issue of material fact exists.
Celotex, 477 U.S. at 324.
ANALYSIS
FLSA
“Courts have adopted an expansive interpretation of the definition of ‘employer’
and ‘employee’ under the FLSA, in order to effectuate the broad remedial purpose of the
[FLSA].” Real v. Driscoll Strawberry Associates, Inc., 603 F.2d 748, 754 (9th Cir.1979).
Memorandum Decision & Order – page 3

Under that expansive interpretation, “employees are those who as a matter of economic
reality are dependent upon the business to which they render service.” Id. To measure
dependence, the Circuit has listed six factors for the Court to consider:
1)The degree of the alleged employer's right to control the manner in
which the work is to be performed; 2) the alleged employee's opportunity
for profit or loss depending upon his managerial skill; 3) the alleged
employee's investment in equipment or materials required for his task, or
his employment of helpers; 4) whether the service rendered requires a
special skill; 5) the degree of permanence of the working relationship;
and 6) whether the service rendered is an integral part of the alleged
employer's business.
Donovan v. Sureway Cleaners, 656 F.2d 1368, 1370 (9th Cir.1981). But ultimately the
Court must examine all the facts and is not bound to consider only these six factors.
Real, 603 F.2d at 754-55.
The undisputed facts point to only one conclusion in this case – the plaintiffs were
entirely dependent upon Biggs while working for him: (1) They were transported from
their residences in California to Idaho as passengers in Biggs’ car; (2) While at the ranch
their only transportation was provided by Biggs; (3) They never had an opportunity to
work for others, hire others,1 or make profits based on their managerial skills; (4) While
they provided some small tools, Biggs provided all the heavy equipment and specialized
tools; and (5) They relied entirely on Biggs for food and housing.
Biggs points out that he hired the plaintiffs as independent contractors, and filed
IRS Form 1099s for both men, listing their pay as “nonemployee compensation” and not

11

At oral argument, defense counsel argued that Delacuesta was Norton’s assistant. If the gist of this argument was
that Norton should appear more like an independent contractor becaue

Memorandum Decision & Order – page 4

withholding any taxes from their pay. See Exhibits B & C (Dkt. No. 25-5). But Real
holds that “the subjective intent of the parties . . . cannot override the economic realities
reflected in the factors.” Id. at 754. Here, the economic reality is that plaintiffs were
entirely dependent on Biggs, regardless of how Biggs labeled the relationship.
Biggs argues, however, that the plaintiffs were “unsupervised and had full
authority and autonomy in their agribusiness contract work.” See Biggs Affidavit (Dkt.
No. 28-2) at ¶ 12. Assuming this is true, “[t]he presence of any individual factor is not
dispositive of whether an employee/employer relationship exists.” Id. The other five
factors listed above, based on undisputed facts, overwhelm this single factor and compel
a decision that the plaintiffs were entirely dependent on Biggs and hence were employees
under the FLSA.
Idaho Law
Like the FLSA, the Idaho law protects only employees and does not extend to
independent contractors. Ostrander v. Farm Bureau Mut. Ins. Co. of Idaho, Inc., 851
P.2d 946, 951 (1992). Under Idaho law, the ultimate question in finding an employment
relationship is “whether the employer assumes the right to control the time, manner and
method of executing the work of the employee, as distinguished from the right merely to
require certain definite results in conformity with their agreement.” Burdick v. Thornton,
712 P.2d 570, 572 (Id.Sup.Ct. 1985); see also I.C. § 72–102(9), (13). Four factors are
used in determining whether a “right to control” exists, including, (1) direct evidence of
the right; (2) the method of payment; (3) furnishing major items of equipment; and (4)
the right to terminate the employment relationship at will and without liability. Id.
Memorandum Decision & Order – page 5

Here, the undisputed evidence shows that Biggs had the right to terminate the
relationship at will and, in fact, did so. He furnished the major items of equipment and he
controlled the plaintiffs by assigning them so many tasks that they had no opportunity to
work for others or profit from their managerial efforts. In essence, as discussed above in
relation to the FLSA claim, Biggs controlled the plaintiffs because he set up an
employment relationship where the plaintiffs were completely dependent on him. For
these reasons, the Court finds that plaintiffs were employees under the Idaho law.
Conclusion
The plaintiffs have filed what they entitle as a “motion for summary judgment,”
but it is really a motion for partial summary judgment because it only seeks to resolve the
issue whether the plaintiffs are employees as opposed to independent contractors. The
issue of damages remains to be litigated. The Court will therefore treat plaintiffs’ motion
as a motion for partial summary judgment, and grant the motion. The Court will deny the
defendants’ motion for summary judgment.
ORDER
In accordance with the Memorandum Decision set forth above,
NOW THEREFORE IT IS HEREBY ORDERED, that the plaintiffs’ motion for
partial summary judgment (docket no. 26) is GRANTED. Plaintiffs are deemed
employees under the FLSA and the Idaho law.
IT IS FURTHER ORDERED, that the defendants’ motion for summary judgment
(docket no. 25) is DENIED.

Memorandum Decision & Order – page 6

IT IS FURTHER ORDERED, that counsel contact the Court’s Clerk Jamie Bracke
([e-mail] or 208-334-9021) to schedule a trial setting conference
where the trial date and associated deadlines can be discussed and set.
DATED: January 21, 2016

_________________________
B. Lynn Winmill
Chief Judge
United States District Court

Memorandum Decision & Order – page 7