Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_18-cv-02066/USCOURTS-caed-2_18-cv-02066-26/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 12:635 Breach of Insurance Contract

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UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

ZURICH AMERICAN INSURANCE 

COMPANY OF ILLINOIS,

Plaintiff,

v.

VFORCE INC., et al.,

Defendants.

No. 2:18-cv-02066-DAD-CKD

ORDER GRANTING PLAINTIFF’S MOTION 

FOR SUMMARY JUDGMENT

(Doc. No. 189)

VFORCE INC.,

Cross-Claimant and 

Third-Party Plaintiff,

v.

CORTECH, LLC, et al.,

Cross-Defendant and 

Third-Party Defendants.

This matter is before the court on the motion for summary judgment filed by plaintiff 

Zurich American Insurance Company of Illinois (“Zurich”) on July 8, 2024. (Doc. No. 189.) The 

pending motion was taken under submission on August 2, 2024. (Doc. No. 202.) For the reasons 

explained below, the court will grant plaintiff’s motion for summary judgment in its favor and 

against defendant VForce Inc. (“VForce”).

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BACKGROUND

This case arises from defendant VForce, a staffing company, allegedly failing to pay the 

additional insurance premium owed to plaintiff in breach of their workers’ compensation 

insurance contract.

On March 2, 2021, plaintiff filed its first motion for summary judgment, seeking summary 

judgment in its favor and against defendant VForce on its sole claim for breach of contract.1 

(Doc. No. 92.) On February 5, 2024, the court granted plaintiff’s first motion for summary 

judgment in part. (Doc. No. 182.) Rather than repeat the entire factual and procedural 

background included in that order, the court incorporates that background section by reference 

herein.

In the February 5, 2024 order, the court granted partial summary judgment in favor of 

plaintiff and against VForce as to the first, second, and third elements of plaintiff’s breach of 

contract claim (i.e., that the workers’ compensation insurance policy was a valid contract, Zurich 

performed under the contract, and VForce breached the contract by failing to pay additional 

premiums due under the contract). (Id.) The court denied plaintiff’s motion for partial summary 

judgment as to the fourth element, the issue of the amount of damages, because plaintiff had “not 

established that the $612,656.00 amount of additional premium it seeks in damages is an accurate 

figure, let alone an undisputed amount.” (Id. at 29.) 

On July 8, 2024, plaintiff filed the pending second motion for summary judgment to 

clarify the amount of additional premium owed under the Policy and provide additional evidence 

to substantiate that amount of damages. (Doc. No. 189.) The court reviewed the evidence 

submitted on summary judgment and identified one issue that had not been addressed by the 

parties in their briefing in connection with plaintiff’s second motion for summary judgment. 

Consequently, on September 4, 2024, the court issue an order directing plaintiff (and defendant 

VForce if it so desired) to submit supplemental evidence to address that issue. (Doc. No. 211.) 

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 Plaintiff did not move for summary judgment against defendant Cortech, LLC, the only other 

defendant named in its operative first amended complaint. (See Doc. No. 6 at ¶ 13.)

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Rather than repeat the factual background and analysis set forth in that order, the court 

incorporates that order by reference herein.

In short, the court concluded that based on the evidence before the court on summary 

judgment, there was no genuine dispute of material fact that $1,927,154 was the total earned 

premium, from which defendant’s deposit premium amount is subtracted to arrive at the amount 

of additional premium due. (Id. at 6–7.) The amount of defendant’s deposit premium, however, 

was unclear because plaintiff’s first motion for summary judgment referenced an error by plaintiff 

in failing to give credit to defendant VForce for $65.00 it had paid, whereas the second motion for 

summary judgment was silent as to this $65.00 error. (Id. at 7–8.) The court explained that “[t]he 

only remaining question is whether the correct deposit premium to subtract from that

[$1,927,154] amount is $1,314,498.00 (with no $65.00 error) or $1,314,563.00 (accounting for 

the $65.00 error).” (Id. at 7.)

On September 10, 2024, plaintiff filed a supplemental brief along with an accompanying 

supplemental affidavit from Sheryl Totzke, a legal collections specialist who has been employed 

by Zurich for twenty years. (Doc. Nos. 212, 212-1.) Defendant VForce did not file any 

supplemental evidence, despite being given the option to do so. 

DISCUSSION

In its supplemental brief, plaintiff clarified that the $65.00 payment shown in Zurich’s 

payment log records for VForce’s account is payment for installment fees, not a payment toward 

the premium deposit. (Doc. No. 212 at 2.) Specifically, in her declaration, Ms. Totzke clarifies 

that “VForce paid its deposit premium in installment payments, as opposed to one lump sum,” 

and “[w]hen a deposit premium is paid in installments, there is a fee that is charged by Zurich for 

each payment.” (Doc. No. 212-1 at ¶ 3.) Ms. Totzke confirmed from her review of Zurich’s 

payment log system for VForce’s account “that the accurate amount of deposit premium paid by 

[VForce] or on VForce’s behalf for this Policy[] is $1,314,498.” (Id. at ¶¶ 4, 6.) Ms. Totzke 

further confirmed that because “the total earned premium after payroll audit owed for this 

[Policy] is $1,927,154, and [she] confirmed that $1,314,498 [is the deposit premium paid], the 

amount of additional premium owed after audit is $612,656.” (Id. at ¶¶ 6, 7.)

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As noted above, defendant VForce did not submit any evidence of its own regarding how 

much it paid for the deposit premium or dispute Zurich’s evidence that the $65.00 amount was 

paid for installment fees, not deposit premium.

Based on the undisputed supplemental evidence before the court on summary judgment, 

the court finds that plaintiff has established that its damages amount is $612,656.00, which is the 

amount of additional premium due to Zurich on the Policy. Plaintiff has therefore established the 

fourth and final element of its breach of contract claim against defendant VForce. For this 

reason, the court will grant plaintiff’s motion for summary judgment in its favor on its sole claim 

of breach of contract brought against defendant VForce. As noted above, plaintiff did not seek 

summary judgment against the only other defendant named in its operative first amended 

complaint, defendant Cortech LLC. Thus, because the granting of plaintiff’s motion does not 

“end the action” as to plaintiff or defendant VForce, the court will not direct the Clerk of the 

Court enter final judgment at this time. See Fed. R. Civ. P. 54(b) (“When an action presents more 

than one claim for relief—whether as a claim, counterclaim, crossclaim, or third-party claim—or 

when multiple parties are involved, the court may direct entry of a final judgment as to one or 

more, but fewer than all, claims or parties only if the court expressly determines that there is no 

just reason for delay.”).

CONCLUSION

Accordingly,

1. Plaintiff’s motion for summary judgment (Doc. No. 189) is granted;

a. Plaintiff is entitled to judgment as a matter of law on its sole claim of 

breach of contract brought against defendant VForce Inc.; and

b. Plaintiff is entitled to judgment in its favor and against defendant VForce 

Inc., for damages in the amount of $612,656.00 and prejudgment interest 

according to proof; and

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2. Consistent with Rule 54(b) of the Federal Rules of Civil Procedure, the court will 

not direct entry of final judgment at this time, given that plaintiff’s claims against 

defendant Cortech LLC remain in this case.

IT IS SO ORDERED.

Dated: September 17, 2024 

DALE A. DROZD

UNITED STATES DISTRICT JUDGE

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