Robinson v. Invensys

Filed 10/9/08 Robinson v. Invensys CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

Appeal from a judgment of the Superior Court of Orange County, David T. McEachen, Judge. Affirmed.

Anthony P. X. Bothwell and Rey Hassan for Plaintiffs and Appellants.

Paul, Plevin, Sullivan & Connaughton, Michael C. Sullivan and Martina M. Nagle for Defendants and Respondents.

Plaintiffs David L. Robinson (plaintiff), his wife, Marcia A. Robinson, and his company, R&R Consolidated Enterprises, Inc. (R&R), appeal from the judgment entered following the trial courts grant of summary judgment to defendants Invensys, PLC, David Golden, Brian Haynes, and Paul Mesmer. They contend summary judgment was improper because the trial court ignored evidence, including a decision by the U.S. Department of Labor, and misapplied the law in determining plaintiff was an independent contractor. Finding no error, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff is a nuclear engineer with over 30 years experience on over 60 nuclear projects. He created R&R in July 1984 and is its president. Both he and his wife are employees of R&R.

In 2004, plaintiff had a discussion with Haynes, who told him of a possible opportunity to work at Triconex, an operating unit of Invensys, where Haynes was a project manager. In July, Triconex commissioned plaintiff to perform a formal root cause analysis of some failed system testing performed by Invensys. Plaintiffs initial engagement was for six months and was not through R&R. Rather, he was hired through TAC Worldwide (TAC), a job agency, to provide services to Triconex as a temp employee with reimbursement for hotel, for car, for gas, . . . for food, and . . . biweekly trips home . . . if desired.

Plaintiff performed the root cause analysis and wrote a detailed report of Invensyss failures in the testing. At the end of the six months, Invensys extended the agreement for another six months. Although Invensys spoke to plaintiff about becoming an employee, plaintiff declined because he did not want to move to California. He preferred to remain an independent contractor based in Texas, which enabled him to enjoy a much higher rate of pay.

As an independent contractor, R&R was paid over $400,000 in 15 months for services provided to Invensys. Plaintiff estimated as an employee, his position would have paid $125,000 a year. Invensys continually sought to reduce its costs either by having plaintiff agree to work as an employee or by having an Invensys employee perform the work.

Plaintiff pushed for a corporation-to-corporation contract in order to move his engagement over to R&R. Per his request, in early July 2005, R&R and TAC entered into a Supplier Master Services Agreement (Agreement) prepared with plaintiffs assistance and input. Either TAC or R&R could terminate the Agreement upon 30 days written notice.

At the time he signed the Agreement, plaintiff understood he was agreeing to be an independent contractor and that it was a corp-to-corp [sic] agreement. Paragraph X.IV.A. states, The services which TAC . . . and its Associate Supplier shall render under this Agreement shall be as an independent contractor with respect to each other and to Client. Nothing contained in this Agreement shall be construed to create the relationship of principal and agent, or employer and employee, between TAC . . . and Client, TAC . . . and Associate Supplier, or Associate Supplier and Client. R&R is identified as the Associate Supplier. Plaintiff understood Client refers to mean Invensys.

In August, plaintiff performed quality assurance work on a test for the Nebraska Public Power District. During the project, plaintiff instructed and corrected the engineer working on the test on how to document the deficiencies and at one point directed him to pause the testing and make the necessary modifications. Plaintiff did not inform Haynes or Paul Mesmer, the Director of Quality Assurance for Invensys in Irvine, of the failure to follow procedure because he did not believe it was serious.

At the end of the month, David Golden, the Director of Quality for Invensys, and Mesmer determined that Invensys no longer needed plaintiffs services after September 2 and informed him. On September 2, plaintiff submitted a written complaint about irregularities during the Nebraska Public Power District test. He had not previously reported these irregularities to anyone at Invensys. Nor had he previously complained to a governmental agency. One month later, TAC gave 30 days written notice to R&R that the contract between them also was being terminated.

Plaintiff sued Ivensys for wrongful termination in violation of public policy, retaliatory discharge, breach of contract, interference with contract, intentional interference with prospective economic relations, and intentional and negligent infliction of emotional distress. The individual defendants, Golden, Haynes, and Mesmer, were also named in the emotional distress causes of action. R&R joined in the claims for breach of contract, interference with contract, and intentional interference with prospective economic advantage and plaintiffs wife asserted a cause of action for loss of consortium.

Defendants moved for summary judgment or alternatively summary adjudication in part on the grounds plaintiff was not an employee of Invensys and neither he nor Invensys were parties to the Agreement. The trial court granted the motion, stating, Defendants have met their burden . . . to establish that one or more elements of the cause of action, even if not separately pleaded cannot be established, or that there is a complete defense to that cause of action. . . . The burden then shifts to plaintiff[] to show that a triable issue of one or more material facts exists as to a cause of action. Plaintiff[ has] not met his burden. The plaintiff is not an employee of Ivensys as his circumstances [m]irrors those in Demski [v.] U.S. Dept of Labor (2005) 419[] F.3d 488 [Demski]. (Underscoring deleted.)

DISCUSSION

We review a grant of summary judgment de novo. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 860.) Summary judgment is proper when all papers filed in favor or opposition to the motion show there is no triable issue of material fact and the moving party is entitled to judgment as a matter of law. (Code Civ Pro., 437c, subd. (c).) When a defendant moves for summary judgment, its burden is to show the action has no merit, either by demonstrating one or more of the elements of the cause of action cannot be established, or that there is a complete defense . . . . (Code Civ. Proc., 437c, subd. (p)(2); see also Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 850.) Once this burden is met, the onus shifts to the plaintiff to provide sufficient evidence to demonstrate a triable issue of material fact exists. (Aguilar v. Atlantic Richfield, Co., supra, 25 Cal.4th at p. 850.)

Plaintiff raises two issues on appeal: (1) whether the court erred in characterizing him as an independent contractor, rather than an employee; and (2) [w]hether Invensys met its burden . . . to establish that one or more elements of every causes of action in [his] complaint, even if separately pleaded, could not be established, or that there was a complete defense to all causes of action, and that there remained no triable issue of material fact. But the entirety of plaintiffs opening brief is devoted to the first issue, which affects only the first and second causes of action for wrongful termination in violation of public policy and retaliatory discharge. Plaintiff has waived any argument relating to the remaining six causes of action contained in the first amended complaint by failing to present any reasoned argument or citations to authority. (Benach v. County of Los Angeles (2007) 149 Cal.App.4th 836, 852.) Although our review of a summary judgment is de novo, it is limited to issues which have been adequately raised and supported in [an appellants] brief. [Citations.] (Reyes v. Kosha (1998) 65 Cal.App.4th 451, 466, fn. 6.)

We turn now to the trial courts determination plaintiff was not an employee of Invensys. The existence of an employment relationship is a necessary element of a wrongful termination in violation of public policy cause of action. (Harris v. Atlantic Richfield Co. (1993) 14 Cal.App.4th 70, 72.) Because independent contractors are not employees, they lack standing to assert such a claim. (See Sistare-Meyer v. Young Mens Christian Assn. (1997) 58 Cal.App.4th 10, 17-18; Abrahamson v. NME Hospitals, Inc. (1987) 195 Cal.App.3d 1325, 1329-1330.)

In determining whether a hired party is an employee under the general common law of agency, we consider the hiring partys right to control the manner and means by which the product is accomplished. Among the other factors relevant to this inquiry are the skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; whether the hiring party has the right to assign additional projects to the hired party; the extent of the hired partys discretion over when and how long to work; the method of payment; the hired partys role in hiring and paying assistants; whether the work is part of the regular business of the hiring party; whether the hiring party is in business; the provision of employee benefits; and the tax treatment of the hired party. [Citation.] (Nationwide Mut. Ins. Co. v. Darden (1992) 503 U.S. 318, 323-324 [112 S.Ct. 1344, 117 L.Ed.2d 581].)

Demski, supra cited by the trial court, is instructive. There, the plaintiff was the president and sole shareholder of two corporations (ANR/Scope), which contracted to provide various services to the defendant. The plaintiff had an office at the defendants facility, participated in meetings, and responded to the defendants management inquiries. After the plaintiff complained of safety problems, the defendant terminated its contract with ANR/Scope. The plaintiff filed a complaint with the Department of Labor. An administrative law judge found, among other things, that the plaintiff was not an employee. (Demski, supra, 419 F.3d at p. 490.)

The appellate court agreed, stating [The defendant] never hired her in the sense that we understand the term. It is undisputed that no contractual relationship of any sort existed between [the defendant] and [the plaintiff]. Instead, [the defendant] had contracts with ANR/Scope, and [the plaintiff] was the sole shareholder of ANR/Scope. That [the plaintiff] was the sole shareholder does not mean that [the defendant] had any sort of a contractual or employment relationship with her. The law does not transfer contractual relationships so easily. (Demski, supra, 419 F.3d at p. 492.)

Demski further held that viewed in the light most favorable to [the plaintiff], the record in this case fails to disclose any dispute regarding any of the Darden factors. [The plaintiffs] relationship with [the defendant] is not a master-servant relationship. [The plaintiff] had complete control over how to fulfill ANR/Scopes contractual obligations. She chose whether to seek to renew the agreements, just as [the defendant] was free to renew or not renew them. [The defendant] could not assign more or different work to [the plaintiff] or ANR/Scope than the contracts allowed. [The plaintiff] had control over how ANR/Scope fulfilled its contractual obligations to [the defendant] and who should perform that work. She had exclusive control over the hiring and compensation of ANR/Scope employees who worked on the three contracts. The plaintiff], as the sole shareholder and principal of ANR/Scope, was in the business of providing services . . . . [The plaintiffs] compensation came from any profits ANR/Scope made on the contracts with [the defendant], not from a salary or an hourly wage provided by [the defendant]. Finally, the record does not contain any information that would indicate that [the defendant] provided [the plaintiff] any benefits, or that it withheld social security or income taxes from any payments to ANR/Scope on her behalf. The Darden factors indicate that [the plaintiff] was not an employee, but that her solely owned corporations were independent contractors. (Demski, supra, 419 F.3d at p. 492, fn. omitted.)

Here, as in Demski, plaintiff did not have a contractual relationship with defendant. Rather, the Agreement was between R&R and TAC, which in turn had a contract with Invensys. That plaintiff was an employee and the President of R&R does not transfer R&Rs contractual relationship to plaintiff.

Moreover, applying the Darden factors to the evidence here fails to show any triable issue of material fact. The record shows plaintiff had complete control over how to perform the root cause analysis of Invensyss failed system testing. He also had complete control over the quality assurance work performed on the Factory Acceptance Test for the Nebraska Public Power District. Although plaintiff claims he did not have the power to refuse assignments, he chose to renew the initial six-month term and was the one who sought the corporation-to-corporation contract. To this end, he helped prepare the Agreement, which expressly identified the work relationship as that of an independent contractor. Plaintiff admitted that at the time he signed it, he believed he was agreeing to be an independent contractor. Plaintiff and R&R were in the business of providing services to companies and had been doing so for over 20 years. As an employee of R&R, plaintiffs compensation came from R&R, not from a salary or an hourly wage provided by Invensys to him individually. Finally, neither R&R nor plaintiff were paid by Invensys; rather, TAC paid R&R, which deducted the wage withholdings from the paycheck.

Plaintiffs attempt to distinguish Demski is not persuasive because his only record citations are to his attorneys statements during argument at the hearing on the motion for summary judgment. [C]ounsels arguments are not evidence (Maudlin v. Pacific Decisions Sciences Corp. (2006) 137 Cal.App.4th 1001, 1015) and we are not required to scour the record for evidence supporting plaintiffs position. (Eistrat v. J. C. Wattenbarger & Sons (1960) 181 Cal.App.2d 57, 63.)

Plaintiff also contends the trial court ignored evidence supporting the factors defining a common-law employee as set forth in Darden and Empire Star Mines Co. v. Cal. Emp. Com. (1946) 28 Cal.2d 33. But the mere fact the court did not specifically address those factors in its the ruling does not mean it ignored them. The record demonstrates the court granted summary judgment only [a]fter full consideration of the evidence, the separate statements and points and authorities submitted by both parties, and all written and oral arguments and evidence submitted on the motion from both parties . . . . Plaintiff has not shown the court ignored any factors.

Plaintiff maintains the court erred in ignoring the U.S. Department of Labor [DOL] decision on [his] status as an employee. He cites a letter from the DOL Occupational Safety and Health Administration to attorneys for Triconex indicating that plaintiff made a prima facie showing he was terminated in retaliation for reporting programmatic noncompliance with procedural requirements on the Nebraska Public Power project and unsafe work conditions on another project. Although he acknowledges the ruling is under appeal, and thus is not final, he argues it is persuasive and should be reviewed under the standard of review for federal administrative decisions. We disagree.

Contrary to plaintiffs apparent belief, this case does not involve a direct appeal from the DOL ruling and plaintiff has cited no controlling authority requiring a state court to apply the substantial evidence standard of review to a federal administrative agencys decision when it is cited in a state case involving a state common law claim. In any event, the DOL findings do not demonstrate a triable issue of material fact. Plaintiff fails to indicate in what context they were made or what standards the DOL used. Also, the decision is not final and in fact the DOL made no actual determination of whether plaintiff was an employee but rather summarily concluded he was covered under the provision of the ERA.

DISPOSITION

The judgment is affirmed. Defendants shall recover their costs on appeal.

RYLAARSDAM, J.

WE CONCUR:

SILLS, P. J.

MOORE, J.

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