Babayan v. Aurafin, LLC

Filed 4/16/10 Babayan v. Aurafin, LLC CA2/8

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

APPEAL from a judgment of the Superior Court of Los Angeles County,

Teresa Sanchez-Gordon. Affirmed.

Law Office of Motaz M. Gerges and Motaz M. Gerges for Plaintiff and Appellant.

Ford & Harrison, Lyne A. Richardson, Steven M. Kroll and Alice S. Wang for Defendants and Respondents.

__________________________

This appeal arises from an employment action in which plaintiff sued multiple defendants for wrongful termination on four causes of action unlawful discrimination based on disability under the Fair Employment and Housing Act or FEHA (Gov. Code,  12940 et seq.), violation of public policy, retaliation under the FEHA, and violation of the Labor Code. The trial court entered an order for summary judgment in favor of two defendants because the undisputed evidence established that they were never plaintiffs employer. In the same order, the court granted summary adjudication of issues (SAI) in favor of the actual employers on three of plaintiffs four causes of action. The trial court thereafter entered summary judgment in favor of the non-employers. Although no formal summary judgment was entered in favor of the actual employers, plaintiff dismissed his last remaining cause of action against the actual employers, with prejudice, and we find his appeal is properly taken from a summary judgment which we construe in favor of all of the defendants. We affirm the judgment.

FACTS

In 1986, OroAmerica, Inc., a gold jewelry manufacturer, hired Manuel Babayan to work in the casting division of its Product Development Department which was located in a facility in Burbank. In 2001, Aurafin-OroAmerica, LLC purchased the OroAmerica corporation, and, in 2004, Aurafin-OroAmerica, LLC merged into Aurafin, LLC. At all times from 1986 into the 2000s, Babayan remained continuously employed by this series of Aurafin-related entities.

In early January 2004, Babayan took a leave of absence from Aurafin. According to Babayan, his [d]octors stopped [him at that time] because [he] was unable to continue anymore. Between February 2004 and April 2004, Babayan appears to have filed claims both for workers compensation benefits, and state disability insurance benefits. The record before us on appeal does not readily lend itself to any conclusions about the outcomes of Babayans 2004 claims, but it is not disputed that, after January 2004, he never returned to work at Aurafin.[1] Although he never earned any further hourly wages at Aurafin after January 2004, the company continued to pay the cost of Babayans medical insurance.

Meanwhile, beginning in 2001, and continuing into 2007, Aurafins facility in Burbank experienced ongoing financial problems, which the company addressed by downsizing all departments, including Sales, Customer Service, Merchandizing, Purchasing, Distribution, Manufacturing Department, Staff, and Product Development. In 2001, Aurafin employed a workforce of approximately 386 employees in all of its departments at its Burbank facility. In 2006, the remaining workforce at Aurafins facility in Burbank consisted of 18 employees.[2] In the course of this reduction in force, Aurafin restructured its Product Development Department, including a decision to outsource all casting work. As a result, the entire casting division within the department was eliminated, and all of the casting positions were abolished, including Babayans position.

In a letter (sent by certified mail) dated March 19, 2007, Aurafin advised Babayan that his medical insurance would be discontinued at the end of March 2007, and provided him with a check for his unused vacation time.

In May 2007, Babayan filed a FEHA complaint alleging he had been terminated by Aurafin on March 19, 2007, and that his termination was the result of discrimination based on a physical disability. Babayan requested an immediate right-to-sue letter. On May 4, 2007, the Department of Fair Employment and Housing closed Babayans FEHA case in light of his request for a right-to-sue letter, and issued the letter.

At the same time that Babayan was initiating his disability discrimination claims against Aurafin (i.e., May 2007), Richline Group, Inc. was incorporated, with Berkshire Hathaway, Inc. as Richlines sole shareholder.

In July 2007, Richline purchased Aurafins assets. In a declaration filed in support of the motion for summary judgment motion which underlies Babayans current appeal, Nicholas Romano, Richlines Chief Accounting Officer, testified that the purchase agreement specifically provided that Richline was not assuming any liabilities of Aurafin other than those expressly and intentionally identified in the agreement, and that Richline did not retain or assume liabilities of the alleged nature involved in Babayans later-filed lawsuit. Victoria J. Elliot, Richlines Secretary, and Marc D. Hamburg, Berkshires Treasurer, explained the purchase agreement in similar terms.

In September 2007, Babayan filed a complaint for damages against Aurafin, LLC, Aurafin-OroAmerica, LLC, Berkshire Hathaway, Inc., and Richline Group, Inc. The complaint alleged four causes of action, each against all four defendants: (1) wrongful termination based on disability discrimination in violation of the FFEHA; (2) wrongful termination in violation of public policy; (3) retaliatory termination in violation of the FEHA; and (4) failure to pay wages and other benefits in violation of the Labor Code.

In May 2008, all four defendants filed a joint motion for summary judgment, or, in the alternative, SAI on each of Babayans four causes of action. The parties argued the joint motion to the trial court on July 21, 2008. The court granted summary judgment in favor of Berkshire and Richline on the ground the undisputed evidence established that neither defendant had been Babayans employer. The trial court granted SAI in favor of Aurafin and Aurafin-OroAmerica (hereafter collectively Aurafin) on Babayans first cause of action alleging disability discrimination on the ground the undisputed evidence established that the company had a legitimate non-discriminatory reason for terminating his employment. For the same reason, the trial court granted SAI in favor of Aurafin on Babayans second cause of action alleging wrongful termination in violation of public policy. The court granted SAI in favor of Aurafin on Babayans third cause of action for retaliation on the ground that Babayan could not establish a causal connection between his filing of a workers compensation claim (or any other protected acts) and his ultimate termination.

On August 14, 2008, Babayan dismissed his fourth cause of action for Labor Code violations with prejudice.

On August 18, 2008, the trial court signed and entered a formal order granting the motion for summary judgment in favor of Richline and Berkshire, and SAI of Babayans first three causes of action in favor of Aurafin.

On September 27, 2008, the trial court entered summary judgment in favor of Richline and Berkshire. Because Babayan had then already dismissed his last remaining cause of action, and because the trial courts earlier order had resolved all of Babayans other claims against Aurafin, we construe the summary judgment as applying to Richline and Berkshire, and to Aurafin.

DISCUSSION

I. Richline and Berkshire Hathaway

Babayan contends (Argument G) summary judgment in favor of Berkshire and Richline must be reversed because there is a disputed issue of material fact whether he worked for Berkshire and/or Richline. We disagree.

Babayans arguments do not support his proposition that there is a factual dispute regarding who his employer was. The undisputed evidence in the record establishes that Aurafin paid Babayans wages, social security taxes, and benefits, and issued his annual W-2. Aurafin made all of the decisions regarding his hiring, terms of employment, rates of compensation, and, in the end, termination. Aurafin had the authority to hire, transfer, promote, discipline and discharge Babayan. Aurafin directed his work, and owned all of the equipment he used, and established his work schedules and assignments. Richline did none of these things, and Berkshire, which did no more than own Richline, also did none of these things. The undisputed evidence in the records establishes that Aurafin was Babayans employer, not Richline or Berkshire.

Babayan attempts to avoid the conclusion that neither Richline nor Berkshire had been his employer by arguing there is a disputed issue of fact whether Richline assumed Aurafins potential liability for Babayans not-yet-filed lawsuit when Richline purchased Aurafins assets in July 2007. Babayan argues that the declarations submitted in support of the summary judgment motion by Richline and Berkshire (by Nicholas Romano, Victoria J. Elliot, and Marc D. Hamburg), and describing the terms of the July 2007 purchase agreement, either amount to no evidence whatsoever or do not constitute admissible evidence.[3] He says that Richline and Berkshire never met their burden of proof for summary judgment because they failed to attach a copy of the alleged [purchase agreement] to their motion for summary judgment.

We reject Babayans argument because he has cited no authority in support of his proposition that the terms of an agreement must be evidenced exclusively by a copy of the agreement. Three corporate officers testified (by declaration) that Richline had only purchased Aurafins assets and specified liabilities, not including liabilities of the nature involved in Babayans lawsuit. No more was needed in the first instance. Babayan has not pointed us to any evidence which contradicts Richlines and Berkshires evidence. There is no factual dispute in the record before us.

II. Discrimination Claims In The Context of Summary Judgment Motions

California resolves discrimination claims under the FEHA by applying a burden-shifting procedure known as the McDonnell Douglas test. (See Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 354 (Guz), discussing McDonnell Douglas Corp. v. Green (1973) 411 U.S. 792.) Under this test, the plaintiff bears the initial burden of proving a prima facie case of discrimination by presenting evidence showing (1) he or she was a member of a protected class, (2) he or she was qualified for the position sought or was performing competently in the position held, (3) he or she suffered an adverse employment action, and (4) some other circumstance suggests a discriminatory motive. (Guz, supra, 24 Cal.4th at pp. 354-355.)

Where the plaintiff establishes such a prima facie case, a rebuttable presumption of discrimination arises and the burden shifts to the employer to rebut the presumption by producing admissible evidence sufficient to raise a genuine issue of fact and to justify a judgment for the employer that its employment action was taken for a legitimate, nondiscriminatory reason. Where the employer sustains this burden, the presumption of discrimination disappears, and the plaintiff must then have the opportunity to attack the employers proffered reasons as pretexts for discrimination, or to offer other evidence of discriminatory motive. (Guz, supra, 24 Cal.4th at pp. 355-356.) The ultimate burden of persuasion at the time of trial on the issue of actual discrimination is on the plaintiff. (Id. at p. 356.)

The rules are slightly adjusted in the context of a motion for summary judgment. The employer bears the initial burden of showing either that the plaintiff cannot establish one or more elements of her prima facie case, or that a legitimate, nondiscriminatory reason motivated its employment action. (Guz, supra, 24 Cal.4th at pp. 356-357; see also Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850-851.) Where the employer meets this initial burden on summary judgment, the burden then shifts to the plaintiff to produce evidence that the employers asserted nondiscriminatory reason for the employment action was pretextual, or that the employer acted with a discriminatory animus, or a combination of the two, such that a reasonable trier of fact could conclude the employer engaged in intentional discrimination. (Kelly v. Stamps.com Inc. (2005) 135 Cal.App.4th 1088, 1097-1098, applying Guz, supra, 24 Cal.4th at pp. 356-357, and Aguilar v. Atlantic Richfield Co. supra, 25 Cal.4th at pp. 850-851.) When the plaintiff fails to produces any evidence from which a reasonable fact finder could infer that the employers true reason was discriminatory, the employer is entitled to summary judgment. (Kelly v. Stamps.com Inc., supra, 135 Cal.App.4th at pp. 1097-1098.)

III. The Disability Element

Aurafins motion for summary judgment argued that (1) Babayan could not prove two elements of his prima facie case disability and adequate performance and that (2) it terminated him for a legitimate, nondiscriminatory reason, namely, its business had been suffering financial problems, and it had responded by abolishing jobs, including his. The trial court granted summary judgment in favor of Aurafin based on the latter ground. On appeal, Babayans first contention harkens back to his prima facie case; he contends summary judgment in favor of Aurafin must be reversed because there are disputed facts on the issue whether he had a disability. We are willing to agree, but find this disability issue to be unhelpful in saving Babayans case from summary judgment.

The FEHA defines a physical disability to include any physiological disease, disorder, condition, cosmetic disfigurement, or anatomical loss that both affects one of more of the bodys systems (e.g., neurological, immunological, respiratory, reproductive, cardiovascular) and [l]imits a major life activity. (Gov. Code,  12926, subd. (k).) Bababyans complaint, which framed the issues for his case, alleged that he suffered a serious industrial injury related to his employment (the nature of which is not stated), and that he has been diagnosed with [1] Sturge Weber Syndrome, [2] Congenital Cerebral Calcification Glaucoma, and [4] Facial Angcoma.

The evidence submitted by Aurafin in support of its summary judgment motion, largely consisting of Babayans deposition testimony, showed that Babayans allegation regarding Sturge Weber Syndrome meant he had a birthmark, and that his allegation regarding Congenital Cerebral Calcification Glaucoma meant he had the lowest of the glaucoma and that it was not dangerous. Babayan did not even known whether he had Facial Angcoma. We are satisfied that Aurafins initial showing in its summary judgment motion was sufficient.

In his opening brief on appeal, Babayan seems to argue that summary judgment was improper because Aurafin create[d] a genuine issue of disputed fact by making an assertion that Babayan was not disabled. We reject Babayans argument because it does not make sense that a defendant, by the very act of filing a summary judgment motion, thereby creates a circumstance which defeats the motion. The argument is a non sequitur.

Apart from that, Babayan refers us to pages 288-289 in the clerks transcript for disputed evidence. Those pages actually consist of his separate statement in support of his opposition. Nonetheless, his separate statement does cite to an exhibit (Exhibit J), which we found after our own search. Exhibit J is an unauthenticated copy of a report prepared by a psychologist in June 2005, more than one year after Aurafin terminated Babayan. The content of the report suggests it was prepared for the lawyer who represented Babayan in connection with the workers compensation case he filed in 2004. The report indicates that Babayan suffered from an impairment in cognitive functioning, and depression. Although we see some significant problems with Babayans evidentiary presentation, we are willing to accept that he did make enough of a showing to create a factual question about whether he had a disability on March 19, 2007, the date on which Aurafin terminated him.

Our conclusion, however, does not mean summary judgment should not have been entered in favor of Aurafin. As we noted above, it was Babayans burden in the summary judgment context to produce some evidence that Aurafins asserted non-discriminatory reason for the adverse action was pretextual, or that it acted with a discriminatory animus, or a combination of the two, such that a reasonable trier of fact could find it engaged in intentional discrimination. As we explain in the next sections, Babayan made no such showing.

IV. The Discrimination Element

Babayan argues summary judgment in favor of Aurafin must be reversed because there is a disputed issue of material fact whether the company discriminated against him based on his disability. It is at this point that we depart from agreement with Babayan.

The undisputed evidence in the record established the following fact: The number of Aurafin employees decreased from 386 in 2001 to 18 in 2006. The casting division in which Babayan worked until January 2004 was outsourced, and all of the jobs in that division, including Babayans position, were abolished. Aurafin ended up selling off its assets. Babayan has not cited us to any evidence which conflicts with these facts. Babayan did not show in the trial court, and has not shown us on appeal, that there exists evidence such that a reasonable trier of fact could conclude that Aurafin engaged in unlawful discrimination. It is legally immaterial whether Babayan suffered from a disability on disability on March 19, 2007, because the undisputed evidence showed that Aurafin terminated him because it had no job for him. The undisputed evidence showed that Aurafins termination decision rested on economics, not discrimination.

V. Accommodation

We reject Babayans argument that summary judgment in favor of Aurafin must be reversed because there is a disputed issue of material fact whether the company ever engaged in the requisite good faith interactive process required under FEHA, or offered him reasonable disability accommodations, before terminating him. Inasmuch as there is no dispute that Aurafin terminated Babayan on the ground that it had eliminated more than 90 percent of its workforce, including Babayans job position, it is legally immaterial once again whether the company failed to accommodate his disability before terminating him. When a businesss business is basically down the drain, the FEHA does not prohibit that business from terminating its employees, including an employee who has a disability.

VI. Pretext

For the reasons explained above, we summarily reject Babayans contention that summary judgment in favor of Aurafin must be reversed because there is a disputed issue of material fact whether the companys decision to terminate him was based on pretextual grounds.

VII. Public Policy

For the reasons explained above, we summarily reject Babayans contention that summary judgment in favor of Aurafin must be reversed because there is a disputed issue of material fact whether the companys decision to terminate him created a termination in violation of public policy.

VIII. Retaliation

Babayan argues summary judgment in favor of Aurafin must be reversed because there is a disputed issue of material fact whether the company retaliated against him. We disagree.

The trial court correctly determined that there was no evidence creating a triable issue of fact vis--vis the causation element of Babayans cause of action for retaliation. Our discussion in the sections above is equally applicable here. It is immaterial whether Babayan filed a workers compensation case, or whether he engaged in other protected activities because the undisputed evidence established that Aurafins decision to end his employment resulted from financial factors. In short, there is no evidence upon which a reasonable trier of fact could find causation between Babayans protected activities and his termination.

DISPOSITION

The summary judgment is affirmed.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

BIGELOW, P. J.

We concur:

RUBIN, J.

LICHTMAN, J.*

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[1] The record contains materials which suggest that Babayans workers compensation claim may have been settled at some uncertain date, and that the disability insurance department may have considered Babayans claim to have been a matter better assigned to the workers compensation forum.

[2] By our calculations, this means that Aurafin shed more than 95 percent of its workplace.

[3] The record does not disclose any objection by Babayan in the trial court to the declarations.

* Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.