Angel Uribe et al v. All State Cleaning et al, No. 2:2012cv08351 - Document 88 (C.D. Cal. 2014)
Court Description: ORDER GRANTING DEFENDANT ALL STATE CLEANINGS MOTION FOR SUMMARY JUDGMENT 38 by Judge Dean D. Pregerson. (lc). Modified on 11/4/2014. (lc).
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Angel Uribe et al v. All State Cleaning et al Doc. 88 1 2 O 3 4 5 NO JS-6 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 ANGEL URIBE and GUSTAVO URIBE, 12 Plaintiffs, 13 v. 14 15 ALL STATE CLEANING, CLASSEN ENTERPRISES INC. and CARLOS MUNGUIA, 16 Defendants. 17 ___________________________ ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. CV 12-08351 DDP (PLAx) ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT [Dkt. 38] 18 19 Presently before the court is Defendant All State Cleaning 20 (“All State”)’s Motion for Summary Judgment. 21 submissions of the parties and heard oral argument, the court 22 grants the motion and adopts the following order. 23 I. 24 Having considered the Background1 Plaintiffs Angel and Gustavo Uribe are former janitorial 25 employees of Defendant Classen Enterprises, Inc. 26 (Defendant’s Statement of Evidence (“SOE”) Ex. 2 at 100:11-14; Ex. (“Classen”). 27 1 28 All State’s motion is based solely on the issue of successor liability and, with respect to Angel Uribe, exhaustion of administrative remedies. Accordingly, facts not relevant to those issues are omitted from the following discussion. Dockets.Justia.com 1 7 at 10:6-8.) Classen was a franchisee of ServiceMaster Acceptance 2 Company (“ServiceMaster”), from which Classen obtained equipment 3 and customer lists. (SOE Ex. B ¶ 8; Ex. C ¶ 6.) 4 In September 2010, Plaintiff Gustavo Uribe (“Mr. Uribe”) 5 complained to Classen manager Cecilia Cortez (“Cortez”) that he was 6 having an adverse reaction to chlorine cleaning products used at a 7 job site. 8 Classen’s proprietary, non-chlorine product, and informed the 9 client that Classen employees would not use bleach products. 10 (SOE Ex. B ¶ 12.) Cortez instructed Mr. Uribe to use (Id. ¶ 13.) 11 Later that year, Classen received reports that Mr. Uribe was 12 arriving at job sites too early in the day, and began cleaning 13 during the client’s business hours. 14 received a warning, but continued to arrive early, and was then 15 suspended. 16 visit job sites while suspended, Classen terminated his employment 17 on September 15, 2010. 18 (Id.) (Id. ¶ 14.) Mr. Uribe Following reports that Mr. Uribe continued to (Id. ¶ 16.) At the time of his termination, Mr. Uribe told manager Craig 19 Classen that he intended to sue Classen “for discrimination, for 20 hours, for mileage, for the mistreatment . . . .” 21 173.) 22 Disabilities Act, his issue with chlorine, or any allegations of 23 racial bias during the termination meeting. 24 testify that he told Craig Classen he intended to sue “because of 25 my injury, the abuse, and all of that.” 26 (SOE Ex. 2 at Mr. Uribe could not recall mentioning the Americans with (Id.) Mr. Uribe did (Id.) On September 19, 2010, Plaintiff Angel Uribe (“Ms. Uribe”) was 27 reprimanded for allowing Mr. Uribe to accompany her to job sites 28 after he had been terminated. (SOE Ex. C ¶ 10.) 2 At the time of 1 the reprimand, Ms. Uribe alleged that two other Classen employees 2 had sexually harassed her. 3 the two alleged harassers denied Ms. Uribe’s allegations and 4 received a warning. 5 Defendant Munguia, admitted one of the allegations, and was 6 terminated. 7 Classen’s disciplinary actions, and never returned to work. 8 Ex. B ¶ 20.) 9 (Id.) (Id. ¶¶ 11-12.) (Id. ¶ 12.) That same day, one of The other alleged harasser, Ms. Uribe did not return calls regarding (SOE Soon after, on October 8, 2010, Plaintiffs filed suit in 10 Ventura County Superior Court (the “Ventura action”), alleging wage 11 claims against Classen. 12 Classen managers Craig Classen and Celia Cortez (“Cortez”) as 13 defendants, as well as Classen owners Ron and Claudia Classen. 14 (SOE Ex. 14; Ex. 15.) 15 ownership interest in Classen. 16 Ventura action did not include claims for discrimination or sexual 17 harassment. 18 moved to be relieved as counsel, indicating that Classen would soon 19 be filing for bankruptcy. 20 Claudia Classen filed for bankruptcy, but Classen itself did not. 21 (Dec. of H.R. Martinez Exs. 12-14.) 22 on November 28, 2011. 23 been no activity in the Ventura action, which remains pending. 24 (Id.) (SOE Ex. 13.) Plaintiffs later named Craig Classen and Cortez did not have any (SOE Ex. 13.) (SOE Ex. B ¶ 2; Ex. C ¶ 2.) The In November 2011, Classen’s counsel (SOE Ex. 16.) (SOE Ex. 17.) Ultimately, Ron and Classen’s counsel was relieved Since that time, there has 25 In early 2012, Blain Bibb (“Bibb”), a ServiceMaster franchisee 26 from elsewhere in California, approached Craig Classen to discuss a 27 partnership in a new ServiceMaster franchise in Ventura. 28 A ¶¶ 3-4; Ex. B ¶ 4; Ex. 24 at 95:15-97:8.) 3 (SOE Ex. In April 2012, Bibb, 1 Classen, and Cortez formed a limited partnership named All State 2 Cleaning (“All State”). 3 3-4; Ex. 19.) 4 repossessed Classen’s equipment and customer lists and sold them to 5 Defendant All State. 6 Classen terminated all of its employees. 7 9.) 8 requested applications from Classen’s former employees and hired 9 approximately 90% of them. 10 11 (SOE Ex. A ¶¶ 5-7; Ex. B ¶¶ 5-6; Ex. C ¶¶ Soon after, on April 13, 2012, ServiceMaster (SOE Ex. A ¶ 10; Ex. B ¶ 8.) That same day, (SOE Ex. A ¶ 13; Ex. B ¶ All State, who was in need of janitors in the Ventura area, (Id.; Dec. of H.R. Martinez Ex. 5 at 154:9-155:21) Immediately thereafter, All State began advertising its 12 services to former Classes customers. 13 10; Ex. C ¶ 6.) 14 composed of the same cleaners and supervisors, and using the same 15 ServiceMaster systems, as Classen. 16 All State required each new customer to sign a new contract, though 17 the terms of those contracts were identical to those between the 18 customers and Classen. 19 All State successfully obtained new contracts for 90% of the 20 customers on the Service Master customer lists that had been 21 repossessed from Classen. 22 (SOE Ex. A ¶¶ 11-12; Ex. B ¶ All State advertised itself as a new company (Dec. of H.R. Martinez Ex. 1.) (Id.; Dec. of H.R. Martinez Ex. 3 at 177.) (Id.) Three days later, on August 16, 2012, All State became fully 23 operational, and serviced Classen’s previous customers at the same 24 locations without interruption. 25 at 187:4-13; Ex. 4 at 49:16-20.) 26 (Id.; Dec. of H.R. Martinez Ex. 3 On September 27, 2012, Plaintiffs filed suit in this court 27 against All State, Classen, and Carlos Munguia. 28 Amended Complaint (“FAC”) alleges nine causes of action against All 4 Plaintiffs’ First 1 State. 2 include employment discrimination and harassment in violation of 3 both Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000 et 4 seq.) and California Government Code §12940. 5 moves for summary judgment on all claims against it. 6 II. 7 Based upon a successor liability theory, Plaintiffs’ claims (Id.) All State now Legal Standard Summary judgment is appropriate where the pleadings, 8 depositions, answers to interrogatories, and admissions on file, 9 together with the affidavits, if any, show “that there is no 10 genuine dispute as to any material fact and the movant is entitled 11 to judgment as a matter of law.” 12 seeking summary judgment bears the initial burden of informing the 13 court of the basis for its motion and of identifying those portions 14 of the pleadings and discovery responses that demonstrate the 15 absence of a genuine issue of material fact. 16 Catrett, 477 U.S. 317, 323 (1986). 17 the evidence must be drawn in favor of the nonmoving party. 18 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 242 (1986). 19 If the moving party does not bear the burden of proof at trial, it 20 is entitled to summary judgment if it can demonstrate that “there 21 is an absence of evidence to support the nonmoving party’s case.” 22 Celotex, 477 U.S. at 323. 23 Fed. R. Civ. P. 56(a). A party See Celotex Corp. v. All reasonable inferences from See Once the moving party meets its burden, the burden shifts to 24 the nonmoving party opposing the motion, who must “set forth 25 specific facts showing that there is a genuine issue for trial.” 26 Anderson, 477 U.S. at 256. 27 party “fails to make a showing sufficient to establish the 28 existence of an element essential to that party’s case, and on Summary judgment is warranted if a 5 1 which that party will bear the burden of proof at trial.” 2 477 U.S. at 322. 3 that a reasonable jury could return a verdict for the nonmoving 4 party,” and material facts are those “that might affect the outcome 5 of the suit under the governing law.” 6 There is no genuine issue of fact “[w]here the record taken as a 7 whole could not lead a rational trier of fact to find for the non- 8 moving party.” 9 475 U.S. 574, 587 (1986). 10 Celotex, A genuine issue exists if “the evidence is such Anderson, 477 U.S. at 248. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., It is not the court’s task “to scour the record in search of a 11 genuine issue of triable fact.” 12 1278 (9th Cir. 1996). Counsel has an obligation to lay out their 13 support clearly. 14 1026, 1031 (9th Cir. 2001). 15 file for evidence establishing a genuine issue of fact, where the 16 evidence is not set forth in the opposition papers with adequate 17 references so that it could conveniently be found." 18 III. Discussion 19 Keenan v. Allan, 91 F.3d 1275, Carmen v. San Francisco Sch. Dist., 237 F.3d The court “need not examine the entire Id. The parties do not dispute that Plaintiffs never worked for 20 All State, but rather for All State’s predecessor, Classen. 21 State’s motion for summary judgment is premised upon its contention 22 that the facts in the record do not support the imposition of 23 successor liability on All State for Classen’s liabilities. 24 employment discrimination action, the successor liability analysis, 25 derived from equitable principles, turns on three principal 26 factors: “(1) continuity in operations and work force of the 27 successor and predecessor employers; (2) notice to the successor 28 employer of its predecessor’s legal obligation; and (3) ability of 6 All In an 1 the predecessor to provide adequate relief directly.” Criswell v. 2 Delta Air Lines, Inc., 868 F.2d 1093, 1094 (9th Cir. 1989) (citing 3 Bates v. Pac. Maritime Ass’n, 744 F.2d 705, 709-10 (9th Cir. 1984). 4 Of these, the second and third factors are most critical. 5 Criswell, 868 F.2d at 1094 (citing Musikiwamba v. Essi, Inc., 760 6 F.2d 740, 750 (7th Cir. 1985). 7 A. 8 In most cases, it would be “grossly unfair” to impose 9 successor liability on a purchaser that, for lack of notice, did Notice 10 not have the chance to protect itself against potential 11 liabilities, such as by negotiating an indemnification clause or a 12 lower purchase price reflecting the assumed risks. 13 F.2d at 1094; Musikiwamba, 760 F.2d at 750. 14 Criswell, 868 All State has submitted evidence that at the time All State 15 purchased the franchise and assets from Service Master, none of All 16 State’s founding partners was aware that Plaintiffs had any claims 17 for sexual harassment or discrimination based on disability or 18 race. 19 Ex. C ¶¶ 14-15.) (Statement of Evidence, Ex. A ¶¶ 9, 15; Ex B ¶¶ 21, 24-25; 20 Plaintiffs argue that there is a triable issue of fact 21 regarding All State’s notice of Plaintiffs’ discrimination claims 22 for three reasons. 23 Craig Classen and Celia Cortez had notice that Plaintiffs had filed 24 discrimination charges with the EEOC. 25 evidentiary support for this assertion is unclear. 26 opposition makes no specific reference to any particular piece of 27 evidence, but appears to refer to several documents that were not First, Plaintiffs contend, All State partners 28 7 (Opposition at 9.) The Plaintiffs’ 1 produced in discovery, which this court will not consider.2 2 Fed. R. Civ. P. 37(c). 3 addressed a right to sue letter to Classen in June 2012, Classen 4 had ceased operations by that time, and there is no evidence that 5 Cortez, Craig Classen, or anyone connected with All State ever saw 6 the letter.3 7 See Though All State concedes that the EEOC (All State SOE, Ex. B ¶ 25, Ex. A ¶ 15, Ex. C ¶ 15.) Plaintiffs also appear to refer, without specific discussion, 8 to meetings Craig Classen and Celia Cortez held with Plaintiffs 9 during Plaintiffs’ employment with Classen. Plaintiffs cite to 10 various portions of deposition transcripts, not all of which are 11 included in the record. 12 attended a meeting at which Plaintiff Angel Uribe complained about 13 being “touched by someone” and receiving a text message. 14 Decl., Ex. 6 at 95:23-96:1.) 15 learned of Plaintiff Angel Uribe’s allegations of inappropriate 16 behavior later in 2010, when reprimanding her. 17 Ex. 3 at 87:22-25.) 18 discrimination claims, Mr. Uribe testified at this deposition that, 19 at the time of his termination, he told Craig Classen that he 20 intended to sue Classen “for discrimination, for hours, for 21 mileage, for the mistreatment . . . .,” but did not specifically 22 mention any race or disability-related issues. When deposed, Cortez testified that she (Martinez Craig Classen testified that he (Martinez Decl., With respect to Plaintiff Gustavo Uribe’s (SOE Ex. 2 at 173.) 23 24 25 26 27 2 Plaintiffs also move, under Federal Rule of Civil Procedure 56(d), for a continuance of the instant motion and a “relaxation of any discovery cut-offs” to allow them to file documents that have never been produced. Plaintiffs apparently also seek to compel the production of additional documents, though not explicitly. Plaintiffs’ motion and requests are DENIED. 3 28 The letter was addressed to Classen, care of owner Ron Classen. (All State SOE Ex. 5.) 8 1 None of this testimony supports Plaintiffs’ contention that 2 Cortez and Craig Classen knew that one or both Plaintiffs had filed 3 any charges with the EEOC. 4 Craig Classen, were aware that Ms. Uribe had made allegations of 5 sexual harassment at one point, Classen took disciplinary measures 6 against the alleged perpetrators, including termination of 7 Defendant Munguia’s employment, the same day Ms. Uribe complained. 8 Ms. Uribe never responded to Classen’s attempts to contact her 9 regarding her complaint or returned to work, let alone intimated Though Cortez, and to a lesser degree, 10 that she would bring a claim for sexual harassment. 11 Uribe’s brief reference to unspecified “discrimination,” alongside 12 threats of legal action “for hours, for mileage, for the 13 mistreatment,” have put Craig Classen on notice of potential claims 14 for disability or race discrimination. 15 intensified when Plaintiffs soon filed the Ventura action, which 16 did not include any claims for harassment or discrimination. 17 the time All State formed, approximately a year and a half later, 18 Craig Classen and Cortez were not on notice of any extant 19 discrimination claims, let alone EEOC charges. 20 Nor could Mr. That ambiguity only At Second, Plaintiffs contend, without any citation to authority, 21 that All State need not have had notice of Plaintiffs’ 22 discrimination claims because Bibb did not diligently investigate 23 any potential liabilities. 24 assert that Bibb did not care whether he was acquiring liabilities 25 because he was obtaining Classen’s former assets at a low price. 26 (Opp. at 10:9-10.) 27 Bibb’s testimony that “it was in [his] interest to go after the[] 28 abandoned clients for no cost, as opposed to pay any money for them (Opp. at 10.) Plaintiffs further Plaintiffs’ only support for this contention is 9 1 . . . .” (Martinez Decl., Ex. 2 at 80:3-5.) That statement, 2 however in no way suggests that Bibb was indifferent to potential 3 liabilities. 4 would not have purchased Classen’s former assets from Service 5 Master if he had known of the discrimination claims. 6 9.) To the contrary, Bibb’s declaration states that he (SOE, Ex. A ¶ 7 Lastly, Plaintiffs argue, again without any citation to 8 authority or evidence, that “the knowledge of Craig [Classen] and 9 Celia [Cortez] is imputed to All State under well settled agency 10 principles” because Cortez and Craig Classen were managers of both 11 All State and Classen. 12 any notice of Plaintiffs’ EEOC charges. 13 court, no reasonable trier of fact could conclude that All State 14 had notice of the discrimination claims Plaintiffs filed with the 15 EEOC. As discussed above, neither individual had On the record before the 16 B. 17 Classen’s ability to provide direct relief to Plaintiffs is Classen’s Ability to Provide Relief 18 also a critical factor in the successor liability analysis. 19 Criswell, 868 F.2d at 1094. 20 when the predecessor could have provided relief, but the successor 21 cannot, as “an injured employee should not be made worse off by a 22 change in the business.” 23 same token, however, an employee who could not have recovered 24 against a predecessor employer should not be made better off by the 25 arrival of a new, deeper-pocketed successor. 26 here. 27 they concede that “there is no way [Classen] could provide a remedy 28 to Plaintiffs,” as it was on the verge of bankruptcy and Successor liability may be appropriate Musikiwamba, 760 F.2d at 749. Id. By the Such is the case Though Plaintiffs do not specifically discuss this factor, 10 1 dissolution. 2 weigh against the imposition of successor liability. 3 C. (Opp. at 10.) Policy considerations, therefore, Id. Continuity of Operations 4 Because the notice and availability of direct relief factors 5 both weigh heavily against successor liability, the court need not 6 address the continuity of operations factor. 7 All State did operate as a continuation of Classen’s business, that 8 is not sufficient to outweigh the other, more important factors in 9 the successor liability analysis. 10 11 12 IV. Even assuming that Conclusion For the reasons stated above, All State’s Motion for Summary Judgment is GRANTED. 13 14 15 16 IT IS SO ORDERED. 17 18 19 Dated: November 4, 2014 DEAN D. PREGERSON United States District Judge 20 21 22 23 24 25 26 27 28 11
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