Court Opinion

ID: 9374683
Source: CourtListenerOpinion
Date Created: 2023-02-23 18:03:36.358023+00
Date Added: 2024-06-11T17:16:52.347532
License: Public Domain

Filed 2/23/23 Ameritemps of PA v. U.S. Continental Marketing CA4/1
                 NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

                COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                                                 DIVISION ONE

                                         STATE OF CALIFORNIA

AMERITEMPS OF PA, INC.,                                              D080514

     Plaintiff, Cross-Defendant and
Appellant,
                                                                     (Super. Ct. No. RIC1902823)
         v.

U.S. CONTINENTAL MARKETING,
INC.,

     Defendant, Cross-Complainant
and Respondent.

         APPEAL from a judgment of the Superior Court of Riverside County,
Irma Poole Asberry, Judge. Affirmed.
         Ellis Law Group and Mark E. Ellis for Plaintiff, Cross-Defendant and
Appellant.
         Law Offices of Steven R. Lovett and Steven R. Lovett for Defendant,
Cross-Complainant and Respondent.
         Ameritemps of PA, Inc., (Ameritemps PA), a temporary staffing agency,
appeals from a judgment entered after a bench trial. The trial court ruled
that Ameritemps PA must indemnify one of its contracting employers, U.S.
Continental Marketing, Inc. (USCM), for expenses and damages USCM
incurred in defending an employment lawsuit (Jimenez lawsuit) brought by a
temporary employee, Elvia Velasco Jimenez, who was placed with USCM by
Ameritemps PA. In its appeal, Ameritemps PA primarily argues that
(1) USCM did not give it adequate notice of the Jimenez lawsuit to trigger its
indemnity obligation, and (2) there is no substantial evidence to support the
trial court’s finding that it is the “alter ego” of Ameritemps West, Inc.
(Ameritemps West), which it alleges is the responsible employer.
      We conclude that Ameritemps PA has forfeited its notice argument by
failing to address the evidence and theory relied on by the trial court in its
ruling on the issue. We find it unnecessary to determine whether there is
sufficient evidence to support the “alter ego” finding, because we conclude
that it could not have been prejudicial to Ameritemps PA in light of the
court’s uncontested factual findings that Ameritemps PA was Jimenez’s
direct employer and was liable based on its own negligence in screening and
terminating her. Because we reject Ameritemps PA’s other claims of error,
we affirm the judgment.
              FACTUAL AND PROCEDURAL BACKGROUND
      A.    Trial Evidence
      Ameritemps PA is a staffing agency that provides temporary employees
to various businesses. USCM is a contract manufacturer of chemical
products and occasionally relies on temporary employees in its workforce.
Ameritemps PA and USCM entered into a staffing agreement in June 2015
for Ameritemps PA to provide temporary employees to USCM. The staffing
agreement was in effect from June 23, 2015 to June 23, 2016.
      Section 11 of the staffing agreement provides that Ameritemps PA
would defend, indemnify, and hold USCM harmless from all claims, losses,

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and liabilities (including reasonable attorneys’ fees) to the extent caused by
Ameritemps PA’s breach of the agreement; its failure to discharge its duties
set forth in the agreement; or the negligence, gross negligence, or willful
misconduct of Ameritemps PA in the discharge of those duties and
responsibilities.
      Section 14 provides that, as a condition precedent to indemnification,
the party seeking indemnification must inform the other party within three
business days after it receives notice of any claim, loss, liability or demand
for which it seeks indemnification from the other and must cooperate in the
investigation and defense of such matter.
      In 2015, Elvia Velasco Jimenez, a temporary employee assigned to
USCM by Ameritemps PA, reported that she was being sexually harassed by
a coworker on the job. USCM and Ameritemps PA investigated and held
meetings with Jimenez, her coworker, and other employees. USCM and
Ameritemps PA could not corroborate her allegations.
      Steven Toloday, chief financial officer of USCM, testified that before
Jimenez filed her lawsuit, she complained to USCM’s human resources
manager that she was being sexually harassed. USCM brought the
complaint to the attention of Ameritemps PA in writing, and Toloday had a
conversation about it with Jesse Proctor, owner and president of Ameritemps
PA. There were also complaints against Jimenez, including “bullying,” which
prompted USCM to request that Ameritemps PA transfer her to a different
assignment. Instead of transferring her, however, Ameritemps PA
terminated Jimenez’s employment because “they didn’t want to deal with
her.” USCM also learned that Ameritemps PA failed to screen Jimenez
adequately and that she was “undocumented and didn’t have a right to work

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in the U.S.” Valid work authorization “was something [USCM] required [the]
temporary agency to screen.”
      Shortly after her termination, Jimenez filed a wrongful termination
lawsuit against USCM, Ameritemps West and the USCM employee who
allegedly harassed her. The Jimenez lawsuit ultimately settled after having
gone through trial and subsequent appeal and remand to the trial court.
      David Williams, owner and president of USCM, testified that
Ameritemps PA and Ameritemps West are “one and the same.” Michael
Pruitt, USCM’s director of operations, testified about his understanding that
Ameritemps West was a “franchise” of Ameritemps PA. Proctor testified that
Ameritemps PA was “going to establish a franchise in California under an
ordinary agreement of the franchise.” When that did not work out, he “tried
to make other business arrangements, because I already had money invested
flying out there and doing some things.” All invoices for services rendered by
Ameritemps West were invoiced by Ameritemps PA. The two entities shared
at least one employee, Leilani Williams, who “carried a dual role for both
companies.” Additionally, both companies shared the same phone number
and shared the same office space. Jose Hernandez, a former assigned
employee, was asked if he knew whether he was employed by Ameritemps PA
or Ameritemps West, he replied that he was unsure and that he “only
know[s] of one.” Toloday similarly testified that both companies “disclosed
themselves as Ameritemps.”
      David Williams further testified that he asked Ameritemps PA and
Proctor to assist USCM with the defense costs of the Jimenez lawsuit in April
2018. Proctor seemed familiar with the Jimenez complaint and “was not
surprised” by it.

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      B.    Trial Court Proceedings
      Ameritemps PA filed this lawsuit against USCM seeking fees for the
transfer of temporary employees to another staffing agency after the
relationship between USCM and Ameritemps PA ended in 2018. USCM then
filed a cross-complaint alleging that Ameritemps PA failed to indemnify it for
the Jimenez lawsuit, including $300,000 to settle the lawsuit and
$265,236.24 in attorneys’ fees and costs incurred in defending the lawsuit.
The matter was tried without a jury over four days in January 2021.
      In its final decision, the trial court ruled that Ameritemps PA “had
knowledge of Ms. Jimenez’ claims against USCM . . . at least by 10-30-15.”
The court relied in part on trial exhibit 115, a letter written to Jimenez by
Leilani Williams, the branch manager of Ameritemps PA, stating “that after
conducting an investigation, there was no confirmation of Ms. Jimenez’

accusations of sexual harassment.”1 The court concluded: “The evidence
established Jesse Proctor [the owner of Ameritemps PA] had notice of
Ms. Jimenez’ claims as early as October 2015 because Ms. Williams,
[Ameritemps PA]’s branch manager, was directly involved in the
investigation of Jimenez’ claims. Thereafter, upon service of the complaint in
the Jimenez lawsuit, Mr. Toloday [USCM’s chief financial officer] gave
instructions to notify [Ameritemps PA] and Mr. Proctor. At the meeting of

1      It is unclear from the record whether trial exhibit 115 was formally
admitted into evidence. Although Ameritemps PA’s opening brief quotes the
trial court’s order referring to trial exhibit 115, it raises no issue on appeal
regarding the trial court’s reliance on it and has therefore forfeited any such
objection. Absent any claim of error, we must presume that the trial court
properly relied on the exhibit and that its order accurately stated the
substance of the letter. (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130,
1133 [“A judgment or order of a lower court is presumed to be correct on
appeal, and all intendments and presumptions are indulged in favor of its
correctness”].)
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4-2-18 between Jesse Proctor and David Williams [chief executive officer of
USCM], Mr. Proctor was asked to contribute to the costs of the lawsuit. The
request to contribute was followed up in writing on 4-2-18. . . . The testimony
of witnesses does not show delays on the part of USCM to notify [Ameritemps
PA] of Ms. Jimenez’ claims. The evidence established that [Ameritemps PA]
had the requisite notice regarding claims of Jimenez.”
      The court also concluded that “Ms. Jimenez was an assigned employee
of [Ameritemps PA]” and “that [Ameritemps PA] was the staffing agency in
place from 6-23-15 to 6-23-16.” The court discussed USCM’s evidence that
Ameritemps PA was negligent because: (1) Ameritemps PA fired Jimenez
instead of transferring her, as USCM had specifically requested; and
(2) Ameritemps PA failed to properly screen Jimenez and therefore failed to
discover that she was undocumented. The court concluded “that
[Ameritemps PA’s] negligence was one of the proximate causes of the
[Jimenez] lawsuit” but that USCM also bore responsibility because one of its
own employees committed the alleged harassment. The court ruled that
Ameritemps PA and USCM were equally responsible for USCM’s total losses
of $565,236.24 incurred as a result of the Jimenez lawsuit, and therefore
awarded USCM damages in “the sum of $282,618.12 to indemnify USCM for
damages incurred in the Jimenez lawsuit.”
      Finally, the court concluded that Ameritemps PA and Ameritemps
West were acting “with a unity of interest, such that the separate
personalities of the corporations did not exist and they should be treated, as a
matter of equity, as the same legal entity.” Accordingly, the court found
Ameritemps PA and Ameritemps West jointly and severally liable for the
damages owed to USCM.

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      Ameritemps PA appeals the trial court’s ruling on USCM’s cross-
complaint for indemnification. Ameritemps West is not a party to the appeal.
Moreover, Ameritemps PA does not challenge the trial court’s ruling on its

complaint for transfer fees.2
                                DISCUSSION
                                       I
      Ameritemps PA first contends that USCM violated Section 14 of the
staffing agreement because USCM failed to notify it of Jimenez’s claim
within three business days. According to Ameritemps PA, “[n]otice here was
not given to [Ameritemps PA] for two years.” Ameritemps PA asserts that
“the only evidence the court cited to get past the three-day notice condition
precedent in the agreement” was a “foundationless comment” by USCM’s
owner David Williams that during an April 2, 2018 meeting (two years after
Jimenez filed her lawsuit), “Proctor seemed to be familiar with the lawsuit.”
Ameritemps PA asserts that “[t]his is not substantial evidence.”
      Contrary to Ameritemps PA’s assertion, however, this was not the only
or even the primary evidence the trial court relied on in deciding the notice
issue. Specifically, the court found that Ameritemps PA “had knowledge of
Ms. Jimenez’ claims against USCM . . . at least by 10-30-15” based on trial
exhibit 115, the letter written to Jimenez by Leilani Williams, the branch
manager of Ameritemps PA, stating “that after conducting an investigation,
there was no confirmation of Ms. Jimenez’ accusations of sexual harassment.”
The court concluded: “The evidence established that Jesse Proctor [the owner
of Ameritemps PA] had notice of Ms. Jimenez’ claims as early as October
2015 because Ms. Williams, [Ameritemps PA]’s branch manager, was directly

2      The court ruled that Ameritemps PA failed to prove USCM owed it any
transfer fees. Because Ameritemps PA does not challenge the court’s ruling
on its complaint, we do not discuss it any further.
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involved in the investigation of Jimenez’ claims. Thereafter, upon service of
the complaint in the Jimenez lawsuit, Mr. Toloday [USCM’s chief financial
officer] gave instructions to notify [Ameritemps PA] and Mr. Proctor.”
      Ameritemps PA has failed to discuss any of this evidence or make any
argument why it does not constitute substantial evidence to support the trial
court’s finding that it had notice of Jimenez’s claims by at least October 30,
2015, before she even filed her lawsuit. Nor does Ameritemps PA make any
legal argument why this would be insufficient to satisfy the three-day notice
condition. “A party who challenges the sufficiency of the evidence to support
a finding must set forth, discuss, and analyze all the evidence on that point,
both favorable and unfavorable.” (Doe v. Roman Catholic Archbishop of
Cashel & Emly (2009) 177 Cal.App.4th 209, 218.) The appellant must also
“show how and why it is insufficient.” (In re Marriage of Marshall (2018) 23
Cal.App.5th 477, 487 [internal quotation marks omitted].) “Because
[Ameritemps PA] has failed in [its] obligations concerning the discussion and
analysis of a substantial evidence issue, we deem the issue waived.” (Doe, at

p. 218.)3

3      It is also questionable whether Ameritemps PA adequately preserved
this issue in the trial court. Although Ameritemps PA mentioned the three-
day notice provision in its trial brief, it never referred to it during trial and
did not argue the three-day notice issue in closing argument. A party may
not abandon a theory during trial and then seek to revive it on appeal.
(Carmichael v. Reitz (1971) 17 Cal.App.3d 958, 969.) We need not decide this
question, however, because we conclude that Ameritemps PA forfeited the
argument in its briefing on appeal.
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                                        II
      Ameritemps PA also argues that the trial court erred in determining
that it was the “alter ego” of Ameritemps West, the entity that initially
placed Jimenez with USCM before Ameritemps PA took over and entered
into the June 2015 staffing agreement. But the trial court found that
Ameritemps PA was liable for its own negligence as the direct employer of
Jimenez during the relevant time period. And Ameritemps West is not a
party to this appeal. Ameritemps PA has failed to explain how the alter ego
finding could have prejudiced it given the trial court’s findings that it was
liable for its own negligence as the direct employer of Jimenez and was
responsible for negligently screening her and negligently terminating her
employment. Because Ameritemps PA has failed to show any prejudice from
the alter ego finding, and Ameritemps West has not appealed, we need not
decide whether there is sufficient evidence to support the finding. An
appellant has the burden to show not only error, but also that the error is
prejudicial. (Cal. Const., art. VI, § 13; Code Civ. Proc., § 475; Pool v. City of
Oakland (1986) 42 Cal.3d 1051, 1069.) As to Ameritemps PA, any error
regarding the alter ego finding would be harmless given the uncontested
findings by the trial court that Ameritemps PA was directly liable for its own
negligence.
                                        III
      Finally, Ameritemps PA’s opening brief mentions in passing several
other issues that are not referenced in a proper argument heading and not
developed in any meaningful way. We conclude that these issues are
forfeited as well. (See Cal. Rules of Court, rule 8.204(a)(1) [“Each brief must:
[¶] . . . [¶] (B) State each point under a separate heading or subheading

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summarizing the point, and support each point by argument”]; Provost v.
Regents of University of California (2011) 201 Cal.App.4th 1289, 1294
[appellate court does not need to consider arguments “not clearly set out in a
heading and supported by reasoned legal argument”].)
      Even if we were to consider these arguments, however, we would reject
them on the merits. Ameritemps PA first contends that USCM’s contractual
indemnity claim must fail because USCM voluntarily settled with Jimenez.
But voluntary settlement does not defeat a contractual indemnity claim as a
matter of law. Settlement “is presumptive evidence of liability of the
indemnitee and of the amount of liability.” (Linear Technology Corp. v.
Applied Materials, Inc. (2007) 152 Cal.App.4th 115, 130.) “[O]ne acting in
good faith in making payment under a reasonable belief that it is necessary
to his protection is entitled to indemnity or subrogation, even though it
develops that he in fact had no interest to protect.” (Bostick v. Flex
Equipment Co., Inc. (2007) 147 Cal.App.4th 80, 132.)
      The only case cited by Ameritemps PA on this point explained that “a
voluntary payment made by the indemnitee, without regard to its legal
liability, is not recoverable thereunder.” (Southern California Gas Co. v.
Ventura Pipe Line Constr. Co. (1957) 150 Cal.App.2d 253, 257 (So. Cal. Gas).)
In So. Cal. Gas, the court concluded that there was no evidence the parties
had “contemplated and intended the defendant would be required to
indemnify plaintiff against a claim such as the one now asserted.” (Id. at
pp. 259–260.) There, although the indemnification claim also involved a
“voluntary payment,” the court determined it was a voluntary payment to a
third party in a situation not contemplated by the indemnification
agreement. (Ibid.)

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      Here, by contrast, USCM clearly faced legal liability in a situation
covered by Section 11 of the staffing agreement, which obligated Ameritemps
PA to indemnify USCM from all claims resulting from Ameritemps PA’s
negligence in the discharge of its duties. In contrast to Ameritemps PA’s
argument that USCM did not have “the compulsion of an existing legal
liability,” the trial court found that USCM settled the case to mitigate further
damages and prevent further losses. Ameritemps PA does not challenge this
factual finding on appeal.
      Similarly, Ameritemps PA’s argument that it had “no comparative
liability” lacks merit. The trial court found that Ameritemps PA’s
“negligence was one of the proximate causes of the lawsuit” because
Ameritemps PA was negligent in screening Jimenez and firing her despite
her allegations of sexual harassment and USCM’s request that she be
transferred. Once again, Ameritemps PA has not made any meaningful
argument challenging the trial court’s findings of negligent screening and
termination.
      Ameritemps PA’s attempt to rely on GEM Developers v. Hallcraft
Homes of San Diego, Inc. (1989) 213 Cal.App.3d 419, is misplaced. Unlike
GEM Developers, this is not a strict liability case and USCM did not rely on
comparative equitable indemnification. (Id. at p. 423.) On the contrary,
indemnification here is based on a contract, which provides for Ameritemps
PA’s liability to indemnify USCM for claims caused by the negligent
discharge of its duties. Accordingly, we reject Ameritemps PA’s arguments
for reversal of the judgment.

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                              DISPOSITION
     The judgment is affirmed. Respondent shall recover its costs on appeal.

                                                           BUCHANAN, J.

WE CONCUR:

O’ROURKE, Acting P. J.

IRION, J.

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