Filed 2/28/23 Schwade v. South Pasadena Rehabilitation Center LLC CA2/2

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions 

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION TWO

PATRICIA SCHWADE,

Plaintiff and Appellant,

v.

SOUTH PASADENA 

REHABILITATION CENTER LLC 

et al.,

Defendants and Respondents.

 B314052

 (Los Angeles County

 Super. Ct. No. BC694824)

APPEAL from a judgment of the Superior Court of 

Los Angeles County. Amy D. Hogue, Judge. Affirmed.

Matern Law Group, Matthew J. Matern, Mikael H. Stahle, 

Kiran Prasad and Irina A. Kirnosova for Plaintiff and Appellant.

Munger, Tolles & Olson, Joseph D. Lee, Margaret G. 

Maraschino, Stephen A. Hylas and Jessica O. Laird for 

Defendants and Respondents.

______________________________
2

Following the termination of her employment by South 

Pasadena Care Center, LLC (Care Center) at its skilled nursing 

facility (the facility), plaintiff and appellant Patricia Schwade 

brought this action against Care Center and its owners, as well 

as the former owners of the facility. The former owner 

defendants1 moved for summary judgment (Code Civ. Proc., 

§ 437c), arguing that they were not plaintiff’s employer. The trial 

court agreed and granted them summary judgment. Plaintiff 

appeals, contending that the trial court erred in finding that the 

former owner defendants were not plaintiff’s joint employers.

We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

I. The Parties

Rehab Center operated the facility in Pasadena on Mission 

Street until August 2015. Brius Management was the manager 

of Rehab Center before it ceased operations. Rechnitz is the chief 

executive officer of Brius Management and an owner of Brius, 

LLC, a separate entity.2

In August 2015, Rehab Center transferred operations of the 

facility to Care Center. Care Center is a separate entity from 

Rehab Center owned and controlled exclusively by Elliot Zemel 

1

The former owner defendants include defendants and 

respondents South Pasadena Rehabilitation Center, LLC (Rehab 

Center), Brius Management Co. (Brius Management), Brius, 

LLC, and Shlomo Rechnitz (Rechnitz).

2 While Rehab Center had a license with the California 

Department of Public Health (CDPH), Rechnitz, Brius 

Management, and Brius were not named on the license.
3

(Zemel) and Yehuda Schmukler (Schmukler), who were not 

affiliated with Rehab Center.

II. Factual Background

A. Transfer of operations to Care Center

On August 10, 2015, Rehab Center transferred “operational 

and financial responsibility” of the facility to Care Center 

pursuant to a Management and Operations Transfer Agreement 

(MOTA) signed by the parties. The MOTA was needed because 

“California law requires a license from the State Department of 

Public Health (CDPH) in order to operate or manage skilled 

nursing facilities,” and Care Center had not yet obtained a 

license. (California Advocates for Nursing Home Reform v.

Aragón (2021) 60 Cal.App.5th 500, 504 (Aragón).) The MOTA 

required Care Center to submit a change of ownership 

application with the CDPF, “pursuant to which [it would] obtain 

its own license,” as mandated by California law.

Care Center filed its application shortly after the transfer

and received a license on November 23, 2015. On that date, the 

MOTA expired.

While the transfer was processing, however, Rehab Center 

remained on the facility’s license. The MOTA accordingly sought 

to ensure that during the transition period, the facility was 

operated “in compliance with the Lease and applicable law and in 

a manner which does not jeopardize the health and welfare of the 

residents of the [f]acility.” To achieve these purposes, the MOTA 

delegated certain responsibilities to Care Center while also 

providing that Rehab Center had a right to “confer and consult” 

with Care Center on business matters related to the facility and, 

as the law requires, remained “ultimately responsible for the 

daily operational decisions and the care delivered to the residents 
4

at the [f]acility,” while the MOTA was in effect.3 The MOTA 

expressly provided that Rehab Center’s “ultimate responsibility 

shall not relieve [Care Center] from its obligations” under the 

MOTA.

Care Center’s obligations also included hiring “all 

employees whom [Care Center] determine[d] to be necessary to 

effectively and efficiently operate the [f]acility,”4 and 

responsibility over “all aspects of administration of employees, 

including hiring, training, supervision, and termination.” Thus, 

the MOTA required Care Center to provide benefits, maintain 

payroll, issue paychecks, and withhold taxes for employees. In 

contrast, the MOTA required Rehab Center to “terminate all of 

the [f]acility employees . . . on the day immediately prior to 

[August 10, 2015].”

Rehab Center adhered to this requirement and ceased all 

operations and terminated all of its employees on August 9, 2015. 

According to the former owner defendants, as of August 9, 2015, 

Rehab Center had no operational or financial involvement with 

the facility or with Care Center, and no Rehab Center employee 

3

This provision parallels the basic requirements of 

California law. (See, e.g., Aragón, supra, 60 Cal.App.5th at 

p. 510 [“the licensee is still ultimately responsible” for a facility 

“even if management companies are running the day-to-day 

operations”].)

4

Regarding employment, Care Center advised Rehab Center 

that it “intend[ed] to offer employment to at least 2/3 of the 

employees of the [f]acility”; “in reliance on such statements 

[Rehab Center and Care Center] agreed that a closure notice” 

would not be provided.
5

worked at or for the facility. Rather, Care Center made all 

decisions regarding employment at the facility after that day, 

including who to hire and fire.

According to plaintiff, certain text messages between Amy 

Johnson (Johnson), the vice president of regional operations for 

Rockport Healthcare Services (Rockport)5 and the person most 

qualified to testify on behalf of Brius Management and Brius, and

Zemel evidence the former owner defendants’ continued 

involvement in the day-to-day operations of the facility. These 

text messages concern the transferring of nurses from one 

location to the facility. Plaintiff also contends that “Rehab 

Center supplied Care Center employees, including [plaintiff], 

with the employee handbook it had implemented when it was the 

sole owner and operator of the [f]acility.”

B. Care Center employs plaintiff

On or about September 1, 2015, Care Center hired plaintiff 

to work at the facility.6 It employed her until it terminated her 

employment in May 2017. During that entire period, Care 

Center controlled all aspects of plaintiff’s employment.

5

Rockport provides administrative services to various skilled 

nursing facilities. Johnson declared that before August 10, 2015, 

Rockport provided such services to Rehab Center, including its 

assistance with winding down Rehab Center’s operations. 

Plaintiff’s assertion that Johnson was the vice president of Rehab 

Center is misleading and wholly unsupported by the appellate 

record.

6

At her deposition, plaintiff admitted that she does not 

recall communicating with anyone from Rehab Center; nor can 

she identify anyone who worked for Rehab Center.
6

1. Recruitment

In August 2015, Care Center’s owners, Zemel and 

Schmukler, recruited plaintiff and her colleagues from an 

unrelated nursing facility. Care Center hired the group “as a 

team” after taking them on a tour of the facility.

2. Hiring

Care Center’s first administrator, Dolores Diehl (Diehl), 

told plaintiff that she was hired. Either Diehl or Care Center’s 

director of staff development informed plaintiff of her salary.

3. Onboarding

Care Center employees gave plaintiff a two-day orientation, 

during which she received policies and training materials. Those 

materials identify Care Center as the issuing entity.

Plaintiff later signed other documents, including Care 

Center’s employee handbook, although plaintiff denies that she 

received the handbook. Plaintiff is unaware of anyone besides 

Care Center issuing such documents or implementing policies 

governing her employment.

4. Supervision

Diehl (and later, her replacement Mr. Tucker) was 

plaintiff’s supervisor. If plaintiff had issues, such as problems 

with a colleague, she took them to Diehl or Mr. Tucker. She 

knows of nobody else she would have told of such issues.

5. Pay

Care Center collected plaintiff’s time records and provided 

her with paychecks. These records all identify Care Center as 

plaintiff’s employer, and plaintiff is not aware of any other entity 

that paid her or tracked her hours. If her paycheck did not come 

or she missed a meal break, she would have informed Diehl or 
7

Mr. Tucker, or “the bookkeeper” who “worked for Zemel and 

Schmukler.”

6. Materials

Care Center provided plaintiff with a phone, a printerphotocopier, and other supplies she used to work. It also gave 

her a name tag, which her Care Center supervisor required her to 

wear.

7. Assignments, Scheduling, and Performance

Review

Care Center employees trained plaintiff, set her work 

schedule, assigned her work, responded to her time off requests, 

and evaluated her performance.

8. Termination of employment

On or around May 5, 2017, Mr. Tucker, on behalf of Care 

Center, terminated plaintiff’s employment. Plaintiff knows of no 

one else involved in that decision or who had authority to 

terminate her.

9. Plaintiff identifies Care Center as her employer

After plaintiff’s employment was terminated, she identified

Care Center as her sole employer on an unemployment

application and her resume. She never represented to a later 

employer that she was employed at the facility by anyone other 

than Care Center.

III. Procedural History

A. Pleadings

On February 16, 2018, plaintiff initiated this lawsuit, 

asserting individual and class claims under the Labor Code 

against Care Center, Zemel, and Schmukler, as well as Rechnitz, 

Brius Management, and Brius. A year later, she added Rehab 

Center as a Doe defendant.
8

As is relevant to the issues in this appeal, the first 

amended complaint, which is the operative pleading, alleges that 

the former owner defendants and Care Center were plaintiff’s 

joint employers, formed an integrated enterprise, and/or were 

alter egos of one another during the transitionary period when 

plaintiff was first hired and when Rehab Center was the sole 

license holder.

B. Motion for summary judgment

On October 23, 2020, the former owner defendants moved 

for summary judgment on the ground that they were not 

plaintiff’s employer.

C. Plaintiff’s opposition

On March 2, 2021, plaintiff filed her opposition to the 

motion for summary judgment. Her principal contention was 

that there was a triable issue of fact regarding the former owner 

defendants’ status as her employer, as an integrated enterprise 

and as alter egos.

Her opposition identified and discussed certain evidence, 

including Johnson’s text messages with Zemel and copies of 

employee handbooks. But, plaintiff’s counsel failed to attach to 

her declaration copies of those text messages and handbooks, 

both of which were exhibits to particular deposition transcripts. 

Plaintiff also omitted evidence supporting her claim that the 

former owner defendants were liable based upon theories of 

integrated enterprise and alter ego, even though that evidence 

was discussed in her opposition brief and in her supporting 

separate statement.

D. Reply

On March 16, 2021, the former owner defendants filed their 

reply brief, noting that plaintiff had failed to attach copies of 
9

evidence referenced in the opposition brief and separate 

statement. The movants nonetheless addressed those exhibits in 

their reply brief, arguing why they did not raise a triable issue of 

material fact. 

E. Plaintiff’s file a notice of errata

On April 8, 2021, the day before the scheduled hearing, 

plaintiff filed a notice of errata and attached the four omitted 

exhibits for the trial court to review. Plaintiff requested that the 

trial court continue the hearing on the motion “to consider the 

attached exhibits and provide [the former owner defendants] with 

the opportunity to address” them.

F. Trial court order and judgment

At the April 9, 2021, hearing, the trial court stated that it 

had received the notice of errata and asked whether the former 

owner defendants had received the filing. Counsel responded: 

“And just for the purposes of putting it on the record, we do object 

to the newly-submitted evidence as untimely and would move to 

strike the notice of errata for that reason and in violation of due 

process rights. [¶] But we’re also prepared to discuss it, Your 

Honor, which is why we don’t think these new documents make a 

difference.”

The trial court then inquired as to how the exhibits “would 

raise a triable issue of fact.” Plaintiff responded that the 

evidence created triable issues on the former owner defendants’ 

“rights and ability and, indeed, obligation under the law to 

control the operations and the management decisions” at the 

facility. She also contended that the MOTA evidenced Rehab 

Center’s control over the “day-to-day operational decisions.”

After taking the matter under submission, partly to review 

the omitted evidence, the trial court granted the former owner 
10

defendants’ motion. In a 28-page order, the trial court found it 

undisputed that the former owner defendants did not employ 

plaintiff. And, plaintiff could not show an employment 

relationship under a joint employer, integrated enterprise, or 

alter ego theory. In so doing, the trial court sustained the former 

owner defendants’ objection to several documents that plaintiff 

filed late, including an employee handbook and Johnson’s text 

messages with Zemel. But, the trial court went on to consider the 

late-filed evidence: “Even if the documents were admissible, the 

Court concludes they do not raise a triable issue of whether [the 

former owner defendants] exercised control over [plaintiff’s] 

wages, hours, or working conditions, suffered or permitted her to 

work, or engaged her.”

Judgment was entered on May 18, 2021.

G. Appeal

This timely appeal ensued.

DISCUSSION

I. Late-filed Evidence in Support of Plaintiff’s Opposition

The parties devote much of their appellate briefs to the 

question of whether the trial court properly refused to consider 

plaintiff’s late-filed evidence. We need not decide this issue. 

Notwithstanding plaintiff’s argument to the contrary, it is 

evident from both the reporter’s transcript and the trial court’s 

lengthy and detailed minute order that it did consider the 

belatedly filed evidence.7 We too consider the evidence that was 

belatedly filed with the trial court.

7

Curiously, plaintiff also concedes in her opening brief that 

the trial court “explicitly addressed” the evidence in its order 

granting summary judgment.
11

II. Trial Court Properly Granted Summary Judgment

A. Standard of review

“Summary judgment is subject to de novo review. To 

analyze the issues, ‘we follow the traditional three-step analysis. 

“We first identify the issues framed by the pleadings, since it is 

these allegations to which the motion must respond. Secondly, 

we determine whether the moving party has established facts 

which negate the opponents’ claim and justify a judgment in the 

movant’s favor. Finally, if the summary judgment motion prima 

facie justifies a judgment, we determine whether the opposition 

demonstrates the existence of a triable, material factual issue. 

[Citation.]” [Citation.]’ [Citation.]” (Kaney v. Custance (2022) 74 

Cal.App.5th 201, 213.)

“In ‘reviewing the trial court’s decision to grant summary 

judgment, we liberally construe the evidence in support of the 

party opposing summary judgment and resolve all doubts about 

the evidence in that party’s favor. [Citation.]’ [Citation.] ‘[W]e 

must draw from the evidence all reasonable inferences in the 

light most favorable to the party opposing summary judgment. 

[Citation.]’ [Citation.]” (Kaney v. Custance, supra, 

74 Cal.App.5th at p. 213.)

B. No evidence that the former owner defendants were 

plaintiff’s employer

As set forth above, plaintiff’s claims stem from alleged 

violations of the Labor Code. “[N]o generally applicable rule of 

law imposes on anyone other than an employer a duty to pay 

wages.” (Martinez v. Combs (2010) 49 Cal.4th 35, 49 (Martinez).) 

Accordingly, to maintain each of her causes of action, plaintiff 

was required to show that each of the former owner defendants 

was her employer. (Taylor v. Financial Casualty & Surety, Inc.
12

(2021) 67 Cal.App.5th 966, 984 (Taylor); see Cal. Code Regs., tit. 

8, § 11050, subd. 2(E).)

To establish an employment relationship, plaintiff was 

required to introduce evidence that each of the former owner 

defendants (1) “exercise[d] control over [her] wages, hours, or 

working conditions;” (2) engaged her, thereby creating a common 

law employment relationship; or (3) “suffer[ed] or permit[ted]” 

her to work. (Martinez, supra, 49 Cal.4th at p. 64.)

1. None of the former owner defendants exercised

control over plaintiff’s wages, hours, or working conditions

Under the “control” test, a plaintiff must show that the 

defendant had the right to exercise control over her employment. 

(See Ayala v. Antelope Valley Newspapers, Inc. (2014) 59 Cal.4th 

522, 531.) “What matters is whether the hirer ‘retains all 

necessary control’ over its operations.” (Ibid.) In Martinez, for 

example, the California Supreme Court held that farm workers 

were not jointly employed by produce merchants because the 

farmer alone “hired and fired plaintiffs, trained and supervised 

them, determined their rate and manner of pay . . . , and set their 

hours, telling them when and where to report to work and when 

to take breaks.” (Martinez, supra, 49 Cal.4th at p. 72.)

The same is true here. As set forth above, Care Center 

alone recruited plaintiff, hired her, onboarded and trained her, 

set her schedule and addressed her time off requests, set 

workplace policies, assigned her tasks, supervised her and 

reviewed her performance, set her pay, provided her paychecks, 
13

required her to wear a name tag, provided her materials to do her 

job, and ultimately exercised its authority to terminate her.8

Thus, plaintiff failed to raise a triable issue of fact 

regarding the “control” test. (See Martinez, supra, 49 Cal.4th at 

p. 71 [affirming summary judgment for defendant where “[t]he 

undisputed facts . . . show that another entity alone controlled 

plaintiffs’ wages, hours and working conditions”]; Curry v. 

Equilon Enterprises, LLC (2018) 23 Cal.App.5th 289, 302–303 

(Curry) [where another entity “was responsible for hiring, firing, 

disciplining, training, and compensating” the plaintiff-employee, 

“had control over [the plaintiff-employee’s] wages and hours,” and 

controlled “the tasks [the plaintiff-employee] was made to 

perform, and the conditions in which she performed them,” the 

defendant “ha[d] met its burden of establishing there [was] not a 

triable issue of fact concerning [defendant] being [the plaintiffemployee’s] employer”].)

On appeal, plaintiff suggests that a few particular 

documents—namely, Care Center’s handbook, some 

mischaracterized text messages, and the MOTA9—created a 

8

Although arguably not dispositive, we note that plaintiff 

specifically conceded that she could not identify any admissible 

evidence of any of the former owner defendants hiring her, 

paying her, controlling her working conditions, or suffering or 

permitting her to work. (See Martinez, supra, 49 Cal.4th at p. 76 

[ “[n]o evidence suggest[ed] [the farmer’s] employees viewed the 

field representatives as their supervisors or believed they owed 

their obedience to anyone but [the farmer] and his foremen”].)

9

The MOTA is discussed at length in section 2.a., infra.
14

triable issue. However, none of those documents are sufficient to 

establish that Rehab Center or any other former owner defendant 

controlled plaintiff’s employment.10

a. Handbook

At most, the record shows that Care Center used a 

handbook that was similar to the one Rehab Center had 

previously used, and that Johnson, who was never employed by 

Rehab Center, sent the handbook to Zemel before the sale 

because a “union representative asked for it.” There was no

evidence, however, that Rehab Center required or even suggested

that Care Center use its prior policies. Thus, as the trial court 

correctly held, “[e]ven assuming Care Center did use Rehab 

Center’s employee handbook, this fact does not raise a triable 

issue as to whether Rehab Center exercised control over 

[plaintiff’s] wages, hours, or working conditions.”

This is quite different from the cases that plaintiff cites,

each of which involved an entity that imposed or enforced 

policies. (Castaneda v. Ensign Group, Inc. (2014) 229 

Cal.App.4th 1015, 1022 (Castaneda) [parent provided “policy and 

training videos” that subsidiary was required to show to 

employees]; Estrada v. FedEx Ground Package System, Inc.

(2007) 154 Cal.App.4th 1, 11–12 [FedEx controlled “every 

10 As noted during oral argument, plaintiff often conflates the 

former owner defendants by referring to them collectively and 

generically throughout her briefs as “Defendants.” She does not 

explain or argue how these documents demonstrate that each of 

the four former owner defendants was her joint employer.
15

exquisite detail of the drivers’ performance, including the color of 

their socks and the style of their hair”].)

b. Text messages

Plaintiff relies heavily upon a late-2016 text message 

exchange between Zemel, Care Center’s owner, and Johnson. 

Johnson is repeatedly and incorrectly described as “Rehab 

Center’s Vice President of Operations.” However, plaintiff cites 

no evidence that Johnson ever held this role or was ever 

employed by Rehab Center, and the undisputed evidence 

establishes that she simply was not.11 Thus, text messages sent 

by Johnson do not compel a finding that Rehab Center had 

control over plaintiff’s employment.

In any event, the text messages do not show Rehab Center 

exercising any control over plaintiff because the messages have 

nothing to do with her. Rather, they related to Care Center’s 

recruitment of a handful of third-party nurses from an unrelated 

facility, over a year after plaintiff was hired and long after Rehab 

Center had ceased all operations.12

The text messages also do not show that Rehab Center had 

an unexercised “right” to control Care Center’s employees more 

11 Johnson testified that she worked for Rockport, a separate 

entity that provides services to many different nursing facilities. 

She previously provided these services at the facility prior to its 

sale.

12 Plaintiff’s assertion that “the text messages showed that 

Rehab Center was transferring employees from its other locations 

to the Facility” is not supported by any evidence. In fact, plaintiff 

directs us to no evidence that Rehab Center ever had any other 

locations.
16

broadly. (See Ayala v. Antelope Valley Newspapers, Inc., supra, 

59 Cal.4th at p. 531.) Johnson’s messages merely mention a 

“friendly agreement,” and indicate to Zemel that there was one 

nurse from an unrelated facility that Johnson would “rather 

[Care Center] not take.” These messages, at most, frame a 

request, and do not assert some control that Johnson had the 

authority to exercise. Nothing in the record shows that Johnson, 

on behalf of the former owner defendants, had power over Zemel 

or anyone else at Care Center over a year after the transition of 

operational control of the facility had been completed. In fact,

Zemel testified that Care Center alone had power to determine 

who to hire and fire after the sale.

2. None of the former owner defendants meets the 

common law test as plaintiff’s employer

The California Supreme Court has explained that under 

“traditional common law principles” that apply in determining 

whether an employment relationship exists, courts have long 

“emphasized ‘the control exercised by the employer over the 

employee’s performance of employment duties.’” (Patterson v. 

Domino’s Pizza, LLC (2014) 60 Cal.4th 474, 499 (Patterson).) 

Like the “control” test, which is derived from the wage orders, the 

common law “requires ‘a comprehensive and immediate level of

‘day-to-day’ authority’ over matters such as hiring, firing, 

direction, supervision, and discipline of the employee.” (Ibid.)

As with the control test, plaintiff has not introduced and

cannot introduce evidence that any of the former owner 

defendants had control over her own “hiring, firing, direction, 

supervision, and discipline.” (Patterson, supra, 60 Cal.4th at 

p. 499 [ruling that in the absence of evidence of such control, 

“Domino’s lacked the general control of an ‘employer’ . . . over 
17

relevant day-to-day aspects of the employment”’].) In the absence 

of such evidence, none of the former owner defendants meets the 

common law test as plaintiff’s employer.

a. The MOTA does not establish that the

former owner defendants had control over plaintiff’s employment

Effectively conceding that she cannot establish actual 

control over her employment by any of the former owner 

defendants, plaintiff argues that she “was not required” to prove 

this element because Rehab Center had a theoretical “right to 

control” based on the MOTA provision giving Rehab Center “the 

right to confer and consult with [Care Center]” on various 

business “matters, concerning the operation of the [f]acility” for a 

few months after the facility was transferred while Rehab Center 

remained on the facility’s license. This argument, however, 

misconstrues both the terms of the MOTA as well as the common 

law employment test.

As an initial matter, far from granting Rehab Center a

right to control employees at the facility, the MOTA assigned all 

such responsibility to Care Center. It expressly provided that 

Rehab Center would terminate all of its own employees before the 

transfer occurred. Thereafter, Care Center was responsible for 

hiring “all employees whom [Care Center] determine[d] to be 

necessary to effectively and efficiently operate the [f]acility.” The 

MOTA also provided that Care Center “shall be responsible for 

all aspects of administration of employees, including hiring, 

training, supervision, and termination,” as well as for providing 

all benefits, maintaining payroll records, issuing paychecks, and 

withholding taxes for its employees at the facility. Plaintiff 

admitted that she had no reason to believe that the terms of the 

MOTA “impacted [her] job duties,” or her “working conditions”;
18

nor could she point to any evidence showing that Rehab Center’s 

responsibility to ensure patient care resulted in any exercise of 

control over her day-to-day work.

In addition, a party’s contractual right to oversee or ensure 

quality control at a business generally is not sufficient to create a 

triable fact that the party exercised control over the business’s 

employees. (See, e.g., Curry, supra, 23 Cal.App.5th at pp. 294, 

304; Salazar v. McDonald’s Corp. (9th Cir. 2019) 944 F.3d 1024, 

1029–1030 [holding that McDonald’s did not employ its 

franchisee’s employees because, although it had the ability to 

provide oversight and quality control of its franchisee’s 

restaurants, it did “not retain ‘a general right of control’ over 

‘day-to-day aspects’ of work at the franchises,” and its 

“involvement in its franchises and with workers at the franchises 

. . . [did] not represent control over wages, hours, or working 

conditions”]; Henderson v. Equilon Enterprises, LLC (2019) 40 

Cal.App.5th 1111, 1115–1116, 1121, 1123.)

The cases cited by plaintiff prove the same point. For

example, in Medina v. Equilon Enterprises, LLC (2021) 68 

Cal.App.5th 868, 878 (Medina), the court found a joint 

employment relationship based upon significant evidence of the 

putative joint employer’s power to control beyond its contractual 

right to oversee or ensure quality control: the plaintiff testified 

that the putative joint employer’s trainers had directly 

threatened to fire him and had caused other station operators to 

be fired. In other words, there was direct control over the 

plaintiff’s employment. The contract also set forth “extremely 

detailed technical instructions” that were mandatory for station 

owners. (Id. at p. 879.)
19

In contrast here, there is no evidence of the former owner 

defendants’ control over plaintiff’s employment. And, the terms 

of the contract in Medina are a far cry from Rehab Center’s mere 

ability to “confer and consult” under the MOTA.

Mattei v. Corporate Management Solutions, Inc. (2020) 52 

Cal.App.5th 116 (Mattei) is also distinguishable. That case 

involved a collective bargaining agreement where the signatory 

(CMS) lent its status to a third party to allow the third party to 

hire union crewmembers. (Id. at p. 120.) CMS was a defined 

employer under the terms of the collective bargaining agreement 

and bound to pay its employees on a timely basis. (Id. at p. 121.) 

Nothing in the collective bargaining agreement “relieve[d] 

signatories of their responsibility . . . when they ‘len[t]’ their 

signatory status to a nonsignatory.” (Id. at p. 126.) Under these 

circumstances, “CMS remained an employer with all concomitant 

responsibilities imposed by that agreement.” (Id. at p. 127.)

There was also evidence of CMS participating in hiring 

decisions, listing jobs associated with the production with the call 

steward, identifying itself as a “joint producer,” administering 

payroll, and collecting and paying union dues on behalf of 

employees. (Mattei, supra, 52 Cal.App.5th at p. 128.)

Here, in contrast, the MOTA is not vague as to which entity 

is responsible for employees, but rather expressly delegates “all 

aspects” of administering employees to Care Center. There is no 

agreement that adheres the former owner defendants to plaintiff 

in any way.

Furthermore, no such evidence of actual control by Rehab 

Center exists. In fact, other than repeatedly citing a single 

MOTA provision providing for the right to “confer and consult,” 

plaintiff points to no evidence showing that Rehab Center had a 
20

right to control her employment. As the trial court correctly 

explained, she only put forth the handbook and the text 

messages, which, as set forth above, do not create a triable issue 

that Rehab Center controlled her employment.

b. State licensing regulations did not give

Rehab Center the right to control plaintiff’s employment

The trial court also properly rejected plaintiff’s argument 

that Rehab Center’s obligation to comply with patient care 

regulations as the facility’s licensee somehow transformed Rehab 

Center into the “employer” of all individuals who performed 

services at the facility.

The Fifth District rejected a similar argument in a different

regulatory context in Taylor, supra, 67 Cal.App.5th at page 979. 

There, the plaintiffs argued that a surety that contracted with 

their direct employer, a bail bond company named Hotline, jointly 

employed them because it retained certain regulatory 

responsibilities, such as facing penalties if a defendant failed to 

appear in court, and took actions related to those responsibilities, 

such as performing audits, “ensur[ing] bond paperwork was in 

order,” and seeking “status updates [from Hotline] on forfeitures.” 

(Id. at pp. 989, 993, 1003.) The Taylor court held that nothing in 

the regulations or contracts between Hotline and the surety gave 

the surety “the right to control the means and manner of

Hotline’s employees day-to-day work.” (Id. at pp. 993, 996.) 

Rather, the contracts gave Hotline “‘exclusive control’ over its 

agency and employees” (id. at p. 992), and there was no evidence 

“demonstrating [the surety] had input into the hiring, firing, or 

payment of fugitive recovery personnel, dictated how such 

personnel accomplished their work, or supervised that work.” 

(Id. at p. 1003.)
21

The same is true here. The regulations cited by plaintiff

show only that while it was named on the license, Rehab Center 

retained responsibility for ensuring a lawful level of patient care. 

(See Taylor, supra, 67 Cal.App.5th at p. 989.) These regulatory 

duties, however, did not give Rehab Center control over Care 

Center’s employees. (See id. at p. 998.) Like the contract in 

Taylor, the MOTA also disavows Rehab Center’s control over 

employees, instead expressly delegating that responsibility to 

Care Center.

Plaintiff incorrectly argues that Rehab Center was not

permitted to delegate its responsibility under California Code of 

Regulations, title 22, section 72501 to provide adequate personnel 

to ensure patient care. (See Aragón, supra, 60 Cal.App.5th at 

pp. 511–512 [a licensee may lawfully delegate management of the 

“day-to-day operations” of a skilled nursing facility to a 

management company].)

In any event, plaintiff’s argument that a licensee’s duties 

are “nondelegable” has no bearing on employer status. As the 

trial court correctly explained, Rehab Center’s nondelegable 

duties related to its potential liability “in a private action under 

the patients’ bill of rights,” not in a private action by Care 

Center’s employees under the Labor Code. (See, e.g., California

Assn. of Health Facilities v. Department of Health Services (1997) 

16 Cal.4th 284, 302.)

Plaintiff’s contention that Rehab Center had the “motive” to

control Care Center’s employees is equally irrelevant. Not only 

did plaintiff fail to raise this argument below (Mundy v. Lenc

(2012) 203 Cal.App.4th 1401, 1406 [failure to raise a point in the 

trial court constitutes a waiver on appeal]), but she cites no 

California law that confers “employer” status on an entity that 
22

could be “motivated” to care about the performance of another 

entity’s employees. (Benach v. County of Los Angeles (2007) 149 

Cal.App.4th 836, 852.)

Citing Medina, supra, 68 Cal.App.5th 868, plaintiff argues 

that Rehab Center imposed “extremely detailed technical 

instructions” regarding patient care on workers at the facility 

based on various state regulations that apply to skilled nursing 

facilities. But nothing in Medina suggests that the existence of 

state-imposed regulations governing the operation of a nursing 

facility can establish the requisite control over that facility’s 

workers and establish an employment relationship—especially 

when the law provides that a licensee subject to those regulations 

may retain a management company to operate its facility, which 

can, in turn, hire its own employees. (See Aragón, supra, 

60 Cal.App.5th at p. 504.)

Finally, Guerrero v. Superior Court (2013) 213 Cal.App.4th 

912 does not compel a different result. In that case, the 

petitioner was employed to provide in-home support services to 

eligible recipients in Sonoma County (County) under the In-Home 

Support Services Act (IHSS). (Id. at p. 917.) She was not paid 

for services she rendered to a program recipient, “despite a 

comprehensive scheme of federal and California statutes, 

implemented within the County through enactment of local 

ordinances that spell out the responsibilities of County and the 

Sonoma County In-Home Supportive Services Public Authority 

(Public Authority) for establishing and monitoring IHSS 

providers’ wages, hours, and conditions of employment.” (Ibid.) 

The petitioner filed suit against the County and Public Authority; 

they demurred, and the trial court sustained their demurrer 

without leave to amend on the grounds that the County and 
23

Public Authority were not her employers or joint employers. (Id. 

at pp. 917–918.)

The Court of Appeal held that the trial court erred. 

(Guerrero v. Superior Court, supra, 213 Cal.App.4th at p. 918.) 

The court reasoned that because the County and Public Authority 

exercised considerable control over the structure and conditions 

of the petitioner’s employment, the petitioner’s pleading survived 

the demurrer stage of the litigation. (Id. at pp. 937, 949.)

Here, in contrast, there is no comprehensive legislative 

scheme (or anything for that matter) that gives the former owner 

defendants control over the conditions of plaintiff’s employment. 

And there is no evidence that they exercised any such control.

3. None of the former owner defendants suffered or

permitted plaintiff to work

Finally, the trial court correctly found that plaintiff did not 

establish a triable issue under the “suffer or permit” test. “[T]he 

basis of liability” under this test “is the defendant’s knowledge of 

and failure to prevent the work from occurring.” (Martinez, 

supra, 49 Cal.4th at p. 70; see also Futrell v. Payday California, 

Inc. (2010) 190 Cal.App.4th 1419, 1434 [defendant was not the 

plaintiff’s employer because there was no evidence that it “had 

the power to either cause him to work or prevent him from 

working”].)

Plaintiff did not address the “suffer or permit” test in the 

trial court and has never before suggested that the former owner 

defendants had the ability to “block” plaintiff from working. 

Setting that procedural obstacle aside, the undisputed evidence 

establishes that the former owner defendants were unable to 

prevent plaintiff from working because, as set forth above, Rehab 
24

Center ceased operations before plaintiff started working and had 

no authority over plaintiff’s schedule or work.

Plaintiff continues to rely upon Johnson’s text messages, 

arguing that they establish Rehab Center’s authority to prevent 

Care Center’s employees from working. But nothing in these text 

messages suggests that Johnson or Rehab Center had such 

authority.

Plaintiff also argues that the “suffer or permit” test is

intended to reach “sham arrangements” where the actual 

employer is a “straw man,” suggesting that there was some sort 

of sham arrangement here. However, plaintiff cites no evidence 

of a sham or that shows that Care Center is not a legitimate 

employer. Rather, the undisputed evidence establishes that the 

parties entered into the MOTA so that Rehab Center could 

delegate to Care Center the responsibility to manage the facility 

through a common, valid, and enforceable type of management 

agreement. (See Aragón, supra, 60 Cal.App.5th at p. 504.)

C. Plaintiff failed to present a triable issue as to integrated 

enterprise

Initially, we note that the parties dispute whether plaintiff 

may rely upon the integrated enterprise theory. Assuming that 

an integrated enterprise argument is available, “an employee 

who seeks to hold” an entity liable for another entity’s actions 

under an integrated enterprise theory bears a “heavy burden” to 

show that the entities, which are “presumed to have separate 

existences,” in fact “constitute a single employer.” (Laird v. 

Capital Cities/ABC, Inc. (1998) 68 Cal.App.4th 727, 737 (Laird), 

criticized on other grounds by Reid v. Google, Inc. (2010) 

50 Cal.4th 512.) To meet that burden, plaintiff was required to 

satisfy four prongs: (1) interrelation of operations; (2) common 
25

management; (3) common ownership or financial control; and 

(4) centralized control of labor relations. (Ibid.) Plaintiff did not 

present evidence meeting any of them.

1. No evidence showing interrelation of operations

The interrelation of operations prong requires plaintiff to 

show “‘“a degree”’” of control of Care Center’s operations “‘“that 

exceeds the control normally exercised by a parent corporation”’” 

over a subsidiary. (Maddock v. KB Homes, Inc. (C.D. Cal. 2007) 

631 F.Supp.2d 1226, 1239 (Maddock).) Factors include whether a 

parent company “kept [the subsidiary’s] books, issued its 

paychecks, or paid its bills,” and whether the companies had 

shared employees, headquarters, or office space. (Laird, supra, 

68 Cal.App.4th at p. 739.)

None of these factors is present here. Not only are the

former owner defendants not a parent entity to Care Center, but 

plaintiff offers no evidence that any of the former owner

defendants kept Care Center’s books, issued its paychecks, or 

paid its bills.13 Indeed, after Rehab Center ceased operations on 

August 9, 2015, it “neither had employees nor shared employees 

with Care Center,” “did not share offices with Care Center,” did 

13 Plaintiff claims that “Rehab Center presumably ‘paid the 

bills’ ‘since the MOTA provided for it to “ensure that ‘the levels of 

supplies and inventory at the Facility, including without 

limitation, perishable food, non-perishable food, central supplies 

linen, housekeeping and other supplies’ met requirements ‘under 

applicable law.’” This argument omits the adjacent language 

providing that Rehab Center was only obligated to supply the 

facility on the day it was initially transferred to Care Center (“on 

the Operations Transfer Date”).
26

not “receive any revenue from Care Center’s operations,” and had 

no “access to Care Center’s financial information.”

Plaintiff’s argument that Rehab Center shared addresses

with Care Center because a corporate form listed the Mission 

Street address is purely conclusory and unsupported by evidence. 

The form does not show that Rehab Center operated out of that 

address after selling the facility to Care Center.

14 And, while 

shared addresses can be a factor supporting interrelation of

operations, the cases plaintiff cites involved significant additional 

evidence of interrelated operations not present here. (See Perry 

Farms, Inc. v. Agricultural Labor Relations Bd. (1978) 

86 Cal.App.3d 448, 465 [owner owned “all stock” in subsidiary, 

“ma[de] all of the material decisions” for it, and “establish[ed] and 

negotiate[d] the deals in which the two corporate entities 

participate[d]”]; Taylor v. Shippers Transport Express, Inc. (C.D. 

Cal., Sept. 30, 2014, No. CV 13-02092 BRO (PLAx)) 2014 U.S. 

Dist. Lexis 180061 [one company managed the other’s accounts 

payable, accounts receivable, and payroll]; Van Norman v. 

Harman Management Corp. (N.D. Cal., July 6, 1995, No. C93-

2880 MHP) 1995 U.S. Dist. Lexis 9970 [one company kept the 

other’s books and personnel records and issued its paychecks].)

Finally, plaintiff contends that Johnson’s text messages 

“showed that Rehab Center was transferring employees from its 

other locations to the Facility” without citing any evidence that 

Rehab Center had any other locations. Not only is there no 

evidence of such “other locations,” but, as set forth above, 

14 Johnson testified at her deposition that she had no reason 

to believe that Rehab Center maintained a business at the facility 

address, now owned and operated by Care Center. She guessed 

that the address on the form was a “typo.”
27

plaintiff merely speculates that Johnson’s messages were sent on 

behalf of Rehab Center, which, at that time, had ceased all 

operations. (See Silva v. See’s Candy Shops, Inc. (2016) 

7 Cal.App.5th 235, 246 [“An ‘issue of fact . . . is not created by 

“speculation, conjecture, imagination or guess work”’”], overruled 

in part on other grounds in Donohue v. AMN Services, LLC (2021) 

11 Cal.5th 58, 77.)

2. No evidence of common ownership, management,

or financial control

Even though common ownership is “never enough” on its 

own, it is typically required of an integrated enterprise. (Laird, 

supra, 68 Cal.App.4th at p. 738.) As the trial court correctly 

found, there is no common ownership here.15 Since its inception, 

Care Center has been solely and exclusively operated,

maintained and controlled by Zemel and Schmukler. Zemel and 

Schmukler have no ownership interest in any of the former owner 

defendant entities. Likewise, Rechnitz has no ownership interest 

in Care Center; neither do Brius Management, Brius, or Rehab 

Center. Plaintiff even admitted that she has “no information” 

related to the alleged business relationships between the former 

owner defendants and Care Center.

15 Plaintiff argues that a sublease agreement, under which 

Care Center subleased the facility to Rehab Center while the 

MOTA was in effect somehow shows common ownership or 

management. But, as the sublease provides, Care Center entered 

into that agreement so Rehab Center would “remain in legal 

possession of the [f]acility so that [Rehab Center’s] license to 

operate the [f]acility [would] remain in effect.” That does not 

show that the former owner defendants and Care Center had 

ownership or management in common.
28

Urging us to find a triable issue of fact, plaintiff again

relies upon mischaracterized text messages and a claim that 

Rehab Center was obligated to provide the facility with supplies. 

But she cannot dispute that Care Center has never shared 

managers with any of the former owner defendants. Plaintiff 

reported to Diehl and Mr. Tucker, who worked exclusively for 

Care Center. And as noted above, none of the former owner 

defendants had any financial control over Care Center—Rehab 

Center did not “receive any revenue from Care Center’s 

operations,” and had no “access to Care Center’s financial 

information.”

3. No evidence of centralized control of labor relations

The last prong, centralized control of labor relations, 

requires plaintiff to show that the former owner defendants 

“control[led] the day-to-day employment decisions of” Care 

Center and “made the final decisions regarding employment 

matters related to [plaintiff].” (Laird, supra, 68 Cal.App.4th at

p. 738.) The trial court correctly concluded that plaintiff did not

show this factor. After all, the evidence shows that Care Center 

alone controlled plaintiff’s day-to-day employment.

Other than continuing to mischaracterize Johnson’s text 

messages, plaintiff again points to Rehab Center’s obligations 

under the MOTA as evidence of centralized control. But a 

general right to oversee operations is insufficient to show control 

over plaintiff’s day-to-day employment. (See Maddock, supra, 

631 F.Supp.2d at p. 1242 [“evidence that KB Home provided 

unspecified guidance to management personnel . . . and helped 

them to complete a ‘strategic plan’ does not demonstrate that KB 

Home had any involvement in the day-to-day personnel 

decisions”].)
29

D. Plaintiff failed to present a triable issue as to her alter 

ego theory

Alter ego is “an extreme remedy, sparingly used.” (Sonora 

Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 539

(Sonora Diamond).) Courts invoke the doctrine only in “narrowly 

defined circumstances” where “one corporation uses another to 

perpetrate fraud, circumvent a statute, or accomplish some other 

wrongful or inequitable purpose.” (Gopal v. Kaiser Foundation 

Health Plan, Inc. (2016) 248 Cal.App.4th 425, 431.) Establishing 

liability based on an alter ego theory—to the extent such a theory 

is even cognizable16— requires that the plaintiff demonstrate two 

essential elements: (1) “a unity of interest and ownership 

. . . [such] that the separate personalities of the corporation and 

the [individual] do not in reality exist,” and (2) “an inequitable 

result if the acts in question are treated as those of the 

corporation alone.” (Sonora Diamond, supra, 83 Cal.App.4th at 

pp. 538–539.) Without evidence of these elements, “the alter ego 

doctrine cannot be invoked.” (Id. at p. 539.)

Here, plaintiff adduced no evidence of legal or equitable 

ownership, which is dispositive on its own. (SEC v. Hickey (9th 

Cir. 2003) 322 F.3d 1123, 1128 [“[o]wnership is a pre-requisite to 

alter ego liability, and not a mere ‘factor’ or ‘guideline’”].)

Even if common ownership were not required, plaintiff’s 

contention that Care Center is a “mere instrumentality” of Rehab 

Center is without merit. That standard “envisions pervasive 

16 As the trial court acknowledged, the doctrine may not apply 

to Labor Code claims because the statutory scheme is broad 

enough to impose liability on “other persons.” (See Atempa v. 

Pedrazzani (2018) 27 Cal.App.5th 809, 824–826.) We express no 

opinion on this issue.
30

control” that “‘dictates every facet of the subsidiary’s business—

from broad policy decisions to routine matters of day-to-day 

operation.’” (Ranza v. Nike, Inc. (9th Cir. 2015) 793 F.3d 1059, 

1073 (Ranza).) Plaintiff did not provide any such evidence. She 

cannot show that Rehab Center and Care Center disregarded 

corporate formalities or commingled funds. (See Sonora 

Diamond, supra, 83 Cal.App.4th at p. 538 [listing factors].) 

Instead, she cites only the same evidence—the MOTA, the 

corporate form, the mischaracterized text messages, and the fact 

that Care Center chose to use Rehab Center’s prior handbook. 

None of these documents show that Rehab Center had any 

control over Care Center at all, much less that it dictated every 

facet of its business.

Plaintiff fares no better on the second prong. She presents

no evidence there would be an “inequitable result” if her sole 

employer, Care Center, is treated as such. (Sonora Diamond, 

supra, 83 Cal.App.4th at p. 538.) Her only argument is that 

California’s wage-and-hour laws are important as a matter of 

public policy. But no public policy supports requiring entities to 

pay people they did not employ. And the type of case has no 

effect on the alter ego analysis—the “‘“requisite element of fraud 

under the alter ego theory must come from an inequitable use of 

the corporate form itself as a sham, and not from the underlying 

claim.”’” (MacRae v. HCR Manor Care Services, LLC (C.D. Cal., 

Sept. 14, 2017, No. SA CV 14-0715 DOC (RNB)) 2017 U.S. Dist.

Lexis 226097 p. *13.)
31

DISPOSITION

The judgment is affirmed. The former owner defendants 

are entitled to costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.

_____________________, Acting P. J.

ASHMANN-GERST

We concur:

________________________, J.

CHAVEZ

________________________, J.

HOFFSTADT