Beaumont-Jacques v. Farmers Group
Filed 6/12/13
Beaumont-Jacques v. Farmers Group CA2/3
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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opinion has not been certified for publication or ordered published for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 THREE
ERIN
BEAUMONT-JACQUES,
Plaintiff and Appellant,
v.
FARMERS
GROUP INC., ET AL.,
Defendants and Respondents.
B239855
(Los Angeles County
Super. Ct. No. BC438608)
APPEAL
from a judgment of the Superior Court
of
County,
Barbara M. Scheper, Judge. Affirmed.
Law
Offices of William B. Hanley and William B. Hanley for Plaintiff and Appellant.
Barger
& Wolen, Royal F. Oaks and Michael A. S. Newman for Defendants and
Respondents.
Plaintiff
and Appellant Erin Beaumont-Jacques (Appellant) sued various entities. After demurrers below, the remaining
defendants are five affiliated insurers (Signatory Defendants) and Farmers
Group, Inc. (collectively, Respondents).
This
appeal challenges the granting of Respondents’ motion for summary
judgment. Appellant claims the trial
court erred in concluding as a matter of law that she was an
presented no triable issues of fact regarding her causes of action. Appellant
also claims that her district manager classification was a “scheme†to avoid
tax and Labor Code obligations.
The
record below demonstrates that Appellant exercised meaningful discretion with
reference to her efforts. While Respondents had input over the quality and
direction of those efforts, they did not have sufficient “control of the
details†with respect to those efforts.
Appellant was thus an independent contractor and all of her claims must
fail. We accordingly affirm.
FACTUAL SUMMARY
After
several years working for the Signatory Defendants, in September 2005,
Appellant became one of their district managers by executing the District
Manager Appointment Agreement (DMAA).
Appellant thereafter recruited and recommended persons to become agents
solely for the Signatory Defendants; if
the latter accepted such a person, Appellant trained and motivated that agent
to market only the Signatory Defendants’ insurance products. While she herself did not sell those
products, Appellant could represent Respondents, but no other insurers. According to Appellant, she received many
accolades from Respondents. In October
2009, Appellant voluntarily terminated this relationship, receiving, in two payments, $196,085.20 from
the Signatory Defendants pursuant to the DMAA.
In
May 2010, Appellant filed this lawsuit. Appellant later filed the operative
pleading, the Third Amended Complaint, containing causes of action for breach
of contract, breach of the implied covenant, sex discrimination and Business
and Professions Code section 17200 violations. After discovery, Respondents
filed a motion for summary judgment which the trial court granted. This appeal followed.
Among
other things, the DMAA addresses certain subjects, which form the contractual
framework for this dispute. For
instance, paragraph H states: “Nothing contained herein is intended or shall be
construed to create a relationship of employer and employee. The time to be expended by District Manager
is solely within his/her discretion, and the persons to be solicited and the
area within the district involved wherein solicitation shall be conducted is at
the election of the District Manger. No
control is to be exercised by the Companies over the time when, the place
where, or the manner in which the District Manager shall operate in carrying
out the objectives of this Agreement provided only that they conform to normal
business practice†and to applicable law.
Appellant testified at her deposition that, when she signed the DMAA,
she understood she was an independent contractor and the Signatory Defendants
thought so too.
According
to paragraph B.1 of the DMAA, Appellant will “recruit for appointment and train
as many agents acceptable†to the Signatory Defendants. Appellant received commission “overwritesâ€
based upon the sales subsequently produced by those agents, with Respondents
overseeing the amount of such compensation.
In connection with those and related efforts, the DMAA prescribed that
the Signatory Defendants could establish “goals and objectives†with respect to
the sales of their products. Appellant
was required to conform to Respondents’ “regulations, operating principles and
standards†and engage in “normal good business practice.†The Signatory Defendants could verify
Appellant’s efforts by, for instance, examining her records. Paragraph D of the DMAA afforded each party
the option to cancel, “without cause . . . on 30 days
written notice.†Appellant stresses, as questions of fact, the significance of
these and related factors.
Was
the trial court correct in determining, as a
contractor? If so, were all of
Appellant’s claims properly dismissed by that court?
“[T]he
party moving for summary judgment bears the burden of persuasion that there is
no triable issue of material fact and that he is entitled to judgment as a
matter of law.†(Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th
826, 850 (Aguilar).) “A defendant . . . has met his or
her burden of showing that a cause of action has no merit if that party has
shown 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.†(Code Civ. Proc.,
§ 437c, subd. (p)(2).) “Once the
[movant] has met that burden, the burden shifts to the [other party] to show
that a triable issue of one or more material facts exists as to that cause of
action or defense.†(Ibid.) The party opposing summary judgment “may not
rely upon the mere allegations or denials of its pleadings,†but rather “shall
set forth the specific facts showing that a triable issue of material fact
exists.†(Ibid.)
Where
summary judgment has been granted, we review the trial court’s ruling de novo. (Aguilar,
supra, 25 Cal.4th at p. 860.) We consider all the evidence presented by the
parties in connection with the motion (except that which was properly excluded)
and the uncontradicted inferences that evidence reasonably supports. (Merrill v. Navegar, Inc. (2001) 26
Cal.4th 465, 476.) We affirm summary judgment where the moving party demonstrates
the existence of no triable issue of material fact and the entitlement to
judgment as a matter of law. (Code Civ.
Proc., § 437c, subd. (c).)
1. Standards
As
this court said in Angelotti v. The Walt
Disney Co. (2011) 192 Cal.App.4th 1394, 1404 (Angelotti), the “existence of an employment relationship is a
question for the trier of fact, but can be decided by the court as a matter of
law if the evidence supports only one reasonable conclusion.†The pivotal inquiry looks at the “control of
details†- i.e., whether the principal has “ ‘the right to control the
manner and means of accomplishing the result desired. . . .’ †(S. G.
Borello & Sons, Inc. v. Department of
Industrial Relations (1989) 48 Cal.3d 341, 350.)
The
California Supreme Court has declared that “the owner may retain a broad
general power of supervision and control as to the results of the work so as to
insure satisfactory performance of the independent contract—including the right
to inspect [citation], the right to make suggestions or recommendations as to
details of the work [citation], the right to prescribe alterations or
deviations in the work [citation]—without changing the relationship from that
of owner and independent contractor . . . .†(McDonald v. Shell Oil Co. (1955) 44 Cal.2d 785, 790 (
Some
cases say the principal’s control must be “complete†in order to find an
employer/employee relationship. (See,
e.g., Mission Ins. Co. v. Workers’ Comp.
Appeals Bd. (1981) 123 Cal.App.3d 211, 221 (Mission).) Other cases say
the principal must have “complete†or “authoritative†control to find such a
relationship. (See, e.g.,
Engineering, Inc. (2008) 166 Cal.App.4th 1099, 1103 (Varisco).) In any
event, the key is “the right to control, rather than the amount of control
which was exercised.†(Ibid.) Several
decisions (e.g., McDonald and
principal may oversee the results, but not the means, of the work in question. Under any standard, Appellant’s assertion that
she was an employee is rejected.
2. Importance
of Mission and Millsap
similarities to this lawsuit. There, the
subcontract between the principal (Morse) and Blankenhorn and Blankenhorn’s
business entity, EDC, provided that: EDC
was an independent contractor; EDC had the sole right to hire and fire its
employees; and, EDC directed and supervised those employees. (Mission,
supra, 123 Cal.App.3d at pp.
214-215.) Blankenhorn, whose tax returns
stated he was self-employed, did not work specific hours, used his own vehicle
and paid his own expenses; on the other hand, he attended lectures and classes
at Morse, and wore a shirt with a Morse insignia. (Id.
at pp. 216-217.)
Blankenhorn’s
eligibility for workers’ compensation benefits turned on whether he was an
employee or an independent contractor.
The court held: “We believe that
in reality only one reasonable inference can be drawn from the evidence in the
case at bench and that therefore [Blankenhorn] was an independent contractor at
the time he was injured as a matter of law.â€
(Mission, supra, 123
Cal.App.3d at p. 219.) Moreover, the
“Board’s enumeration of [certain] facts in connection with its conclusion that
Morse had the right to exercise control suggests that the Board may have had a
mistaken concept of the type of control that has significance in a situation
such as this. It concluded that Morse
had the power to affect [Blankenhorn’s] conduct. Of course it did. But the fact that Morse prescribed standards
of performance and that [Blankenhorn] on occasion attended lectures or classes
concerning proper methods of installation and service was not evidence that
Morse controlled the manner in which the
desired result was to be achieved.†(Id.
at p. 221.)
In
rejecting the contention that the written agreement was “a subterfuge by Morse
to avoid the employer-employee relationship,†the court enumerated several
factors, including Morse’s establishment of work quality standards which
“constitutes evidence that [Blankenhorn] was an independent contractor.†(Mission,
supra, 123 Cal.App.3d at pp. 223, 224.)
The court added that agreement “expressly stating that the relationship
created is that of independent contractor should not be lightly disregarded
when both parties have performed under the
contract . . . .†(
In
Millsap v. Federal Express Corp. (1991)
227 Cal.App.3d 425, 428-429 (Millsap),
Pence delivered packages for North County Express (NCE). During one such delivery, she struck
Millsap’s automobile; she sued Pence and NCE.
The court ruled, as matter of law, that NCE was not liable for Pence’s
negligence because, at the time of the accident, he was acting as its independent
contractor. That is, NCE lacked
sufficient control to convert the relationship into employer/employee: “ ‘Even one who is interested primarily
in the result to be accomplished by certain work is ordinarily permitted to
retain some interest in the manner in which the work is done . . . .’ †(Id.
at p. 432.) The court observed that
Pence understood he was an independent contractor. He used his own car, purchasing its gas,
repairs and liability insurance. He
received no standard employee benefits, with no taxes withheld from his paychecks. While Pence was provided with instructions
and manuals, that made no substantive difference.
Undisputed
evidence establishes, similar to decisions such as Mission and Millsap, that
Appellant exercised meaningful discretion by, for instance: recruiting agents
for and, when selected, training and motivating those agents to sell the
Signatory Defendants’ products; determining her own day-to-day hours, including
her vacations; on most days, fixing the time for her arrival and departure at
her office and elsewhere, including lunch and breaks; preparing reports for and
attending meetings of the Signatory Defendants; hiring and supervising her
staff, i.e., those who worked at her office, while remitting payroll taxes for
them as employees; performing other administrative tasks, including resolving
problems; paying for her costs such as marketing, office lease, telephone
service and office supplies; deducting those costs as a business expense in her
personal tax returns; and, identifying herself as self-employed in those
returns. Lastly, the DMAA specifically
provided there was no employer/employee relationship.
3
Arguments
While Respondents’
Brief discusses at some length the decisions in
not explain why those two decisions are not applicable to or distinguishable
from this dispute. Instead, Appellant
contends the factors we have previously discussed were set up as a “facade to
make the relationship look like an independent contractor relationship when it
was not†and were “simply the result of [Respondents’] illegal
misclassification of Appellant as an independent contractor.†Nothing in the record, beyond argument,
specifically supports these two contentions.
As previously stated, the Mission court
rejected a similar contention.
According to
Appellant, the Signatory Defendants’ “right to control the means and manner†of
her efforts is captured in the DMAA’s command that she must conform to their
“normal business practice†and “goals and objectives.†Appellant also relies upon the deposition
testimony of her supervisor, Robert Anderson.
(Mr. Anderson was the District Marketing Manager.) He testified that, among other things, he
expected annual business plans and received them from the nine district
managers, including Appellant, in his area.
He arranged for meetings at which Appellant and those other district
managers were expected to and did attend.
Furthermore, he acknowledged his sole final authority to hire and
dismiss any agent in Appellant’s district, and to provide a two-year subsidy
(partially at her expense) for her district’s newly hired agents. While Mr. Anderson had such authority and the
DMAA articulated those points, that does not mean Respondents controlled to any
meaningful degree the means by which Appellant performed and accomplished her
duties as a district manager.
Appellant asserts
the trial court erroneously agreed with Respondents’ objections to the
Declaration of James R. Zentner, submitted in her opposition to the motion for
summary judgment. That court “sustainedâ€
those objections, primarily on the grounds of relevancy. Mr. Zentner was once a district manager of
Respondents, but in a district different than Appellant’s; his supervisor was
Chris Brennan, not Mr. Anderson. Nothing
in Mr. Zentner’s lengthy declaration mentions Appellant. We see no error in excluding this
declaration; in so ruling, the trial court thus committed no “miscarriage of
justice.†(Zhou v. Unisource Worldwide (2007) 157 Cal.App.4th 1471, 1480.)
Appellant
emphasizes the “New District Manager Minimum Acceptable Performance
Standardsâ€(the Performance Standards).
This two-page document, dated October 1, 2005 (the same day Appellant
signed the DMAA and evidently given to her around that day), explains the need
for Appellant to bring on, in definitive time periods while a new district
manager, a specified number of Reserve and Career agents for her district; if
Appellant failed to realize these objectives “and there are no mitigating
circumstances, your appointment agreement will be terminated.†This document ends with these words: “These requirements do not in any way amend
or modify your District Manager’s Appointment Agreement or your status as an
independent contractor. [¶] Keep in mind we view the above criteria as
minimum levels of performance. You
should develop plans to exceed these minimum performance standards.â€
This document,
though, says nothing about the manner in which the Signatory Defendants want or
expect Appellant to comply with these minimum performance standards, nor the
manner in which she should satisfy them.
This document is a classic example of the setting of results while
leaving the means to the Appellant.
In May 2005, at
the request of Mr. Anderson, Appellant prepared a “District 95-39 Business Plan
Draftâ€, discussing what she planned to do if appointed as a district
manager. Among other things, this
30-page submission addressed “Agency Development†and Appellant’s own “priority
to develop the district by expanding our distribution system through agency
development.†So, a few months before
signing the DMAA, Appellant had already formulated the manner in which she
would accomplish certain objectives with agents in her district - another
example of articulating the means to achieve Respondents’ results.
Significantly,
Appellant’s contentions overlook other legal settings where the court rejected
a similar “I-am-an-employee†assertion.
For example, attendance at meetings and wearing logos did not establish
an employer/employee relationship in Mission.
In addition, the principal’s powers in McDonald (quoted above, e.g., “to insure satisfactory performanceâ€)
still yielded a finding there of an independent contractor relationship. (McDonald,
supra, 44 Cal.2d at p. 790) As there
was no consequential authority to control “the
manner in which the desired result was to be achieved†(Mission, supra, 123
Cal.App.3d at p. 221), no employer/employee relationship existed. The same analysis applies herein.
4. The
Right to Terminate
Appellant points
to Respondents’ right to discharge her.
But Appellant voluntarily resigned.
In any event, according to paragraph D (AA 32), the DMAA “may be
cancelled without cause by either the District Manager or the Companies on 30
days written notice . . . .†As Varisco,
supra, 166 Cal.App.4th at page 1108 declared, “ ‘the right to
terminate their arrangement was a mutual one.
[¶] We think these circumstances
show an association, rather than the relation of employer and employee.’ â€
Appellant cites
the “right to discharge at will without cause†is “strong evidence in support
of an employment relationship.†(
with an unilateral contract. Here, each
side could cancel. Her voluntary
departure and her contract’s mutuality augurs against Appellant.
The court in
another workers’ compensation case, did indicate the threat of termination is
one indicator of a principal’s control, to be evaluated along with other
factors; that court, though, rejected the employer/employee assertion. Moreover, even “if one or two of the
individual factors might suggest an employment relationship, summary judgment
is nevertheless proper when . . . all the factors weighed and considered as a
whole establish that [plaintiff] was an independent contractor and not an
employee.†(
Cal.App.4th 580, 590.)
5
In view of the
relevant factors and applicable case law, we believe that a weighing and
consideration of the record as a whole leads to the conclusion the trial court
properly ruled, as a matter of law, that Appellant was an independent
contractor.
Because of this
conclusion, it is not appropriate or necessary to analyze further. That is, in
light of our finding that Appellant was not an employee, all of her causes of
action are not viable as a matter of law.
Her first two causes of action are breach of contract and breach of the
implied covenant; premised upon the allegation of an employer/employee
relationship, these claims cannot succeed as Appellant was an independent
contractor.
The third cause of
action is for sex discrimination which, Appellant asserts, violates Article I,
section 8, of the California Constitution; Appellant, though, as an independent
contractor lacks standing to pursue such a claim. (Sistare-Meyer
v. Young Men’s Christian Assn. (1997)
58 Cal.App.4th 10, 16-17 (rejecting claim for sexual discrimination and violation
of Article I, section 8).) The fourth
cause of action alleges that the failure to classify Appellant as an employee
violated applicable law and the “unlawful†prong of Business and Professions
Code section 17200; that claim falls too, as Appellant was not an employee.
DISPOSITION
The
judgment is affirmed. Respondents are
awarded their costs.
NOT
TO BE PUBLISHED IN THE OFFICIAL REPORTS
HEESEMAN,
J.
We concur:
CROSKEY,
Acting P. J.
KITCHING,
J.
name="_ftn1" title="">* Judge of the Los Angeles Superior Court, assigned by
the Chief Justice pursuant to article VI, section 6 of the California
Constitution.
