Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_05-cv-01329/USCOURTS-casd-3_05-cv-01329-2/pdf.json

Nature of Suit Code: 710
Nature of Suit: Fair Labor Standards Act
Cause of Action: 28:1441 Petition for Removal- Labor/Mgmnt. Relations

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

GORDON J. PERRY, an individual,

Plaintiff,

CASE NO. 05cv1329-LAB (CAB)

ORDER GRANTING IN PART

AND DENYING IN PART

DEFENDANTS’ MOTION FOR

SUMMARY JUDGMENT

vs.

THE UPPER DECK COMPANY, LLC, a

Delaware limited liability company licensed

to do business in the State of California;

LUCA CONSTRUCTION, INC., formerly

known as ADVANCED ANOMALY, INC., a

Delaware corporation licensed to do business

in th State of California; ADMINISTAFF

COMPANIES II, L.P., a Delaware limited

partnership licensed to do business in the

State of California; RICHARD P.

McWILLIAM, an individual; and DOES 1

through 100, inclusive,

Defendants.

Plaintiff, a former employee of Defendant Upper Deck Company, LLC (“Upper Deck”), seeks

damages for alleged willful violation of the Fair Labor Standards Act (“FLSA”) as well as damages

and declaratory and injunctive relief for allegedviolations of several California state statutes regulating

labor and business practices. The essence of the complaint is that Defendants misclassified the

employment of Plaintiff and others and, by so doing, avoided paying overtime wages as required by

law. Although the First Amended Complaint (“FAC”) mentions other employees besides Plaintiff,

Plaintiff is seeking damages only on his own behalf.

Case 3:05-cv-01329-CAB Document 71 Filed 05/11/07 Page 1 of 9
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Defendants Upper Deck and Richard McWilliam (“McWilliam”) moved for summary

judgment. They contend Defendant McWilliam cannot be considered Plaintiff’s employer and

therefore cannot be responsible for failure to pay wages or any of the other California state claims.

They contend Plaintiff’s cause of action for conversion of wages is untenable because the amount

owed is uncertain. They further contend Plaintiff’s claims under conversion, unjust enrichment

(quantum meruit), and Cal. Bus. & Prof. Code § 17200 are untenable because California’s Labor Code

provides the exclusive remedy. Finally they maintain summary judgment is appropriate because

Plaintiff was properly classified as exempt from overtime pay under the Fair Labor Standards Act.

They argue Perry spent the majority of his working time as a project manager, regularly exercising his

discretion and independent judgment in performing his work. Plaintiff opposes the motion.

Defendants Upper Deck and McWilliam have also requested the Court take judicial notice of

a California state court ruling, involving the same Defendants and somewhat similar facts, Luca

Construction v. Markoff, No. GIN044456 (San Diego Superior Ct., June 12, 2006). 

I. Legal Standards

Federal Rule of Civil Procedure 56(c) empowers the court to enter summary judgment on

factually unsupported claims or defenses, and thereby “secure the just, speedy and inexpensive

determination of every action.” Celotex Corp. v. Catrett, 477 U.S. 317, 325, 327 (1986). Rule 56

allows a party to move for summary adjudication on any part of a claim or defense. See Fed. R. Civ.

P. 56(a)–(d). Summary judgment or adjudication is appropriate if the “pleadings, depositions, answers

to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of

law.” Fed. R. Civ. P. 56(c); see also Arpin v. Santa Clara Valley Transp. Agency, 261 F.3d 912, 919

(9th Cir. 2001). 

The moving party bears the initial burden of demonstrating the absence of a “genuine issue of

material fact for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). If the movant

meets his burden, the burden shifts to the nonmovant to show that summary adjudication is not

appropriate. Celotex, 477 U.S. at 317, 324. The nonmoving party cannot oppose a properly supported

summary adjudication motion by “rest[ing] on mere allegations or denials in his pleadings.”

Case 3:05-cv-01329-CAB Document 71 Filed 05/11/07 Page 2 of 9
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Anderson, 477 U.S. at 256. The nonmovant must go beyond the pleadings to designate specific facts

showing that there are genuine factual issues that “can be resolved only by a finder of fact because they

may reasonably be resolved in favor of either party.” Id. at 250. 

Only admissible evidence may be considered in deciding the motion. Fed. R. Civ. P. 56(e);

Beyene v. Coleman Sec. Serv., Inc., 854 F.2d 1179, 1181 (9th Cir. 1988). In addition, the nonmovant’s

evidence is to be believed and all justifiable inferences are to be drawn in his favor. Id. at 255.

Determinations regarding credibility, the weighing of evidence, and the drawing of legitimate

inferences are jury functions, and are not appropriate for resolution by the court on a motion for

summary adjudication. Id. 

II. Judicial Notice

As noted above, Defendants Upper Deck and McWilliam have asked this Court to take judicial

notice of a ruling in a California state court action involving some of the same parties and a somewhat

similar fact pattern. This Court may take notice of the records of an inferior court in other cases.

United States v. Wilson, 631 F.2d 118, 119 (9th Cir.1980). The Court finds this record relevant as

having some bearing on the Court’s analysis of the issues in this case. Therefore, the request for

judicial notice is GRANTED.

III. Factual Analysis

The parties agree Upper Deck paid employee wages to Plaintiff from January 1, 2001 through

December 7, 2003 and issued him a Form W-2 for the years 2001 through 2003. (Joint Statement of

Undisputed Facts in Furtherance of Motion for Summary Judgment (“Joint Statement”), §§ 1, 9.)

Defendant Rocci Construction, Inc. (“Rocci”) paid Plaintiff employee wages from December 8, 2003

through August 1, 2004 and issued him a Form W-2 for these two years. (Id., §§ 2, 9.) Defendant

Luca Construction Inc. (“Luca”) paid Plaintiff employee wages from August 2, 2004 through

December 31, 2004. (Id., § 3.) Defendant Administaff Companies II issued him a Form W-2 for 2004.

(Id., § 10.) Plaintiff was employed even earlier, beginning in April, 1998, although it is disputed

whether he was employed by Upper Deck or McWilliam. (Compare Perry Decl. at 2:4 and Memo of

P. & A. in Supp. of Mot. for Summ. J. (“Memo”), at 3:1–2.) Defendants also present evidence that

McWilliam, in his personal capacity, never issued Plaintiff a W-2. (Id. at 3:6–7.)

Case 3:05-cv-01329-CAB Document 71 Filed 05/11/07 Page 3 of 9
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Defendants Upper Deck and McWilliam present evidence that McWilliam has been an officer

of Upper Deck from April, 1998 until the present, and that he has been president, treasurer, and

secretary of Luca since August 29, 2002. (Memo at 2:20–27.) They also present evidence describing

Plaintiff’s duties while employed by the various Defendant companies, and how he was supervised.

(Id. at 3:9–5:3, 5:14–25.) 

Plaintiff contests Defendants’ evidence regarding for whom he worked. Plaintiff offers

evidence in the form of his own declaration stating Defendant McWilliam was his employer. (Opp’n

to Mot. for Summ. J., (“Opp’n”) at 2:19–3:9.) Plaintiff contends an employee may have joint

employers or co-employers. (Id. at 6:4–8.) Defendants apparently do not dispute this point. Plaintiff

also offers evidence that Defendant McWilliam controlled the employers who issued his W-2 forms,

(Opp’n at 6:8–10), and that Plaintiff was working as McWilliam’s personal assistant, on McWilliam’s

personal business, rather than the business of Upper Deck or the other companies identified as

employers. (Id. at 7:11–16, 25–26.) He declares he believes Upper Deck’s business involves selling

sports memorabilia (Perry Decl. at 2:10–22), while Defendant McWilliam had him work on

McWilliam’s own “personal tasks, residences, vehicles and possessions.” (Opp’n at 7:14–16; see also

Perry Decl., ¶ 9 (detailing personal tasks).) He declares his duties never changed during the course

of his employment, and that the only change was which entity issued his paycheck. (Opp’n at 7:8–11.)

In essence, Plaintiff argues, and presents evidence, that even if Upper Deck, Luca, and Rocci were his

employers, Defendant McWilliam was a co-employer.

Plaintiff also contends he was not exempt from overtime wages. He focuses his argument on

the nature of the work he performed and how he was supervised, rather than the amount of his

compensation or the method by which it was determined. (Opp’n at 9:3–26.) As Perry describes his

work in his declaration, it consisted largely of moving and caring for McWilliam’s personal property,

maintaining his residential properties, maintaining his vehicles, driving, making purchases as directed

by McWilliam, and, in short “performing diverse errands, chores and handyman tasks for Mr.

McWilliam.” (Perry Decl. at 3:12–23.) He declares he generally did not supervise any other

employees, except when assigned an assistant by McWilliam or McWilliam’s secretary, or when

directed by McWilliam to hire a “day laborer” to help him with his work. (Id. at 4:1–3, 5:6–9.)

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Plaintiff presents no argument or evidence opposing Defendants’ contention that the

conversion claim should be dismissed.

IV. Discussion

A. Conversion, Unjust Enrichment (Quantum Meruit), and § 17200 Claims

Defendants cite Green v. Party City Corp., 2002 WL 553219, *4–*5 (C.D.Cal. 2002) for the

principles that the claim for unpaid wages cannot be brought under a conversion theory, and that the

California Labor Code supplants these two common-law claims and the § 17200 claim. The Court

cautions Defendants that this unpublished opinion, issued in 2002, is not citable even under the newly

modified Ninth Circuit rules. See Circuit Rule 36–3. However, the Court has reviewed the published

and fully citable authorities cited in Green and has relied on them. See Cortez v. Purolator Air

Filtration Products, 23 Cal.4th 163 (2000) (holding that a plaintiff who recovered under § 17200 could

not also recover on a conversion theory); Kraus v. Trinity Management Services, 23 Cal.4th 116

(2000).

The arguments presented in Green and in Defendants’ Memo have apparently persuaded

Plaintiff, who does not oppose this substantial argument. The cited authority, however, does not show

that the California Labor Code’s remedies supplant those provided for under § 17200. In Cortez, the

court held the plaintiff was entitled to proceed under § 17200, even after the trial court had granted her

summary judgment on the Labor Code Claim. Absent further explanation, the Court will not grant

summary judgment on the § 17200 claim.. The Court, however, finds summary judgment is

appropriate on the conversion and unjust enrichment claims.

B. Classification of Plaintiff as Exempt Under the FLSA

As 29 C.F.R. § 541.2 explains, “A job title alone is insufficient to establish the exempt status

of an employee. The exempt or nonexempt status of any particular employee must be determined on

the basis of whether the employee’s salary and duties meet the requirements of the regulations in this

part.” Defendants cite requirements incorporated by reference, now codified at 29 C.F.R.

§ 541.200(a). These provide that an employee employed in a bona fide administrative capacity means

an employee meeting certain salary and responsibility requirements and “[w]hose primary duty is the

/ / /

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performance of office or non-manual work directly related to the management or general business

operations of the employer or the employer's customers . . . .” § 541.200(a)(2). 

In his opposition, Plaintiff pointed to evidence from which a jury could find a large part of his

duties included manual labor and work unrelated to the management or general business operations

of Upper Deck or the other entities Defendants contend were Plaintiff’s employers. For example,

Plaintiff refers to transporting, storing, and loading furniture, art, and other personal property

belonging to McWilliam, repairing residential properties, maintaining McWilliam’s personal vehicles,

delivering goods, and performing general errands and repairs. (Perry Decl. at 3, ¶ 9.) 

In their Reply, however, Defendants only briefly address the portion of Plaintiff’s opposition

in which he addresses the nature of his work. Without reaching the question of whether Plaintiff’s job

required the exercise of discretion and independent judgment, the Court holds a reasonable jury could,

on the basis of the evidence Plaintiff identifies, find Plaintiff’s job did not primarily consist of “office

or non-manual work directly related to the management or general business operations of the employer

or the employer's customers . . . .” This alone is an adequate basis on which a jury could find Plaintiff

was not an exempt employee. The Court therefore finds this triable issue of material fact renders the

summary adjudication of this issue inappropriate.

C. Defendant McWilliam’s Status as Employer

Defendants cite authority for the principle that under California law a corporate officer, such

as McWilliam, is not an employer merely because he hired Plaintiff, set Plaintiff’s salary, supervised

his duties, or dominated corporate affairs. (Memo at 9:6–11) (citing Reynolds v. Bement, 36 Cal.4th

1075 (2005); Jones v. Gregory, 137 Cal.App.4th 798 (Cal.App. 4 Dist. 2006).) Defendants do not

argue McWilliam would not be considered an employer under the FLSA, but rather focus on his joint

liability for Plaintiff’s California state law claims. (Amended Notice of Motion at 2:17–24 (requesting

the claims against Defendant McWilliam based on California statutes be summarily adjudicated in his

favor on the basis that such claims cannot be brought against a corporate principal).) (See also FAC,

¶¶ 36, 37, 39 (citing Cal. Lab. Code §§ 501, 1194, 1198.)) Both Reynolds and Jones, however,

implicitly accept the proposition that status as a joint employer could give rise to liability for wages,

and Defendant does not contest this portion of Plaintiff’s argument.

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As noted above, the Court has granted this request, but finds this ruling to be of limited use.

First, it carries only persuasive weight. Second, the paragraph dealing with Defendant McWilliam is

brief and depends wholly on the holding in Reynolds, which this Court is already considering. The

tentative ruling indicates that, under Reynolds, Defendant McWilliam was not personally liable for

wages owed to a different employee merely because he was a principal of that employee’s employers

and induced those employers to fire her.

If Plaintiff were merely alleging and presenting evidence that Defendant McWilliam served

as an officer of Plaintiff’s employers and directed Plaintiff’s work, this would, under Reynolds, be an

insufficient basis on which to hold Defendant McWilliam liable for unpaid wages. See Reynolds, 36

Cal.4th at 1087 (“[C]orporate agents acting within the scope of their agency are not personally liable

for the corporate employer’s failure to pay its employees’ wages.”) However, Plaintiff is also alleging,

and offering evidence to show much of his work was not done for Upper Deck or the other entities,

but for Defendant McWilliam personally. Plaintiff presents his own declaration as evidence

McWilliam directed his work, his duties included numerous personal tasks for Defendant McWilliam

and McWilliam’s wife, and his work for McWilliam took precedence over all other work. (Perry

Decl., at 3:11–4:1; 4:23–24.). He also presents evidence his job included keeping McWilliam and

McWilliam’s wife’s personal data confidential even from employees of Upper Deck, Rocci, and Luca.

(Id. at 4:11–15.) In directing Plaintiff to perform these tasks, Plaintiff argues, McWilliam could not

have been acting simply in his role as a principal of the employing entities, but must have been acting,

at least in part, on his own behalf. (Opp’n at 2:22–3:2.) 

Although Plaintiff contends Defendant McWilliam’s dominance of the employing entities

should be considered as part of the analysis, the Jones opinion, relying on Reynolds, makes clear this

is an inadequate basis on which to find a principal personally liable for wages. Jones, 137 Cal.App.4th

at 803. 

Plaintiff also offers evidence suggesting Defendant McWilliam transferred his employment

from entity to entity. (Perry Decl. at 4:18–20; Opp’n at 2:25–3:1.) Although the evidence is not

explicit on this point, the Court believes a jury that believed Plaintiff’s evidence could reasonably infer

McWilliam did this for his own personal convenience and not in the scope of his duties as principal

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of the entities concerned, as Plaintiff has argued. (See Opp’n at 7:4–6 (“[H]e was hired by

McWILLIAM and shuffled between the payrolls of these various entities at the whim of

McWILLIAM.”)) Defendants offer explanations for these transfers but at this stage the Court does not

weigh the evidence. Beyene, 854 F.2d at 1181. Plaintiff also points out that his duties and the

conditions of his employment remained substantially the same even though he was transferred between

employing entities. (Id. at 7:6–11.) 

In short, Plaintiff is contending Reynolds and Jones do not preclude claims against Defendant

McWilliam because McWilliam, in employing Plaintiff, was not “acting within the scope of [his]

agency” — or, at least, that this was true with regard to a substantial amount of Plaintiff’s employment.

Reynolds, 36 Cal. 4th at 1087. (See Opp’n at 7:11–14 (“McWILLIAM was not acting as a corporate

agent of UPPER DECK when he put PERRY on its payroll; instead, McWILLIAM was acting in his

own, personal financial self-interest.”))

NeitherReynolds nor Jonesidentifies a statutory definition of “employer” under California law;

rather, each relies on common law principles, such as those governing the liability of corporate

principals. Reynolds, 36 Cal.4th at 1086–87 (holding that statutes are construed in light of the

common law unless the Legislature clearly and unequivocally indicates otherwise) (citation omitted)

; Jones, 137 Cal.App.4th at 804 (“[T]he presumption is that the common law definition of an employer

applies . . . .”) Other than arguing Reynolds held that a corporate principal can never be an employer,

Defendants do not address the definition of employer. Plaintiff cites FLSA and California Industrial

Welfare Commission standards for determining co-employer status. (Opp’n at 4:19–6:10.) However,

in light of Reynolds’ reliance on the common law definition of employer, the Court cannot rely on

these definitions here. 

Reynolds sheds light on this issue when it cites two older cases, Oppenheimer v. Robinson, 150

Cal.App.2d 420, 424 (1957) and Oppenheimer v. Moebius, 151 Cal.App.2d 818, 820 (1957). There,

the courts held the supervisory employees were not personally liable for unpaid wages, in part because

they did not contract with the plaintiff. Implicit in this holding is the principle that, if they had been

party to the employment agreement, they could be held liable. Here, although the evidence is in

conflict, Plaintiff has presented evidence from which a jury could conclude Defendant McWilliam

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himself employed Plaintiff for his own personal benefit beginning in 1998 (Perry Decl. at 2:4), after

which McWilliam transferred Plaintiff’s employment to various entities as a matter of convenience

while keeping Plaintiff’s duties and conditions of employment the same. If a jury were to so find, it

could reasonably infer Defendant McWilliam was also an employer, in addition to the other entities

that nominally employed Plaintiff. Even though the parties have agreed Upper Deck, Rocci, and Luca

employed Plaintiff, this does not preclude a finding that Defendant McWilliam was a joint employer.

If this were the case, Defendant McWilliam could be jointly liable to Plaintiff on the state law claims.

Whether Defendant McWilliam was an employer of Plaintiff therefore presents a triable issue

of material fact and precludes summary adjudication.

V. Conclusion and Order

For these reasons, themotion brought by Defendants McWilliam and Upper Deck for summary

adjudication of all claims on the basis that Plaintiff was an exempt employee is DENIED. Summary

adjudication of all claims against Defendant McWilliam on the basis that he was not an employer is

DENIED. Summary adjudication of the conversion and unjust enrichment claims is GRANTED.

Summary adjudication of Plaintiff’s claims brought under Cal. Bus. & Prof. Code § 17200 is

DENIED. 

IT IS SO ORDERED.

DATED: May 11, 2007

HONORABLE LARRY ALAN BURNS

United States District Judge

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