Motion-Secondary: Tom Ebert vs Ocean Queen USA, Inc., et al

On December 10, 2019 a Motion-Secondary was filed involving a dispute between Ebert, Tom, and American Abalone Farms, Inc., American Abalone Farms, Llc, Ho, James, Ocean Queen Usa, Inc., Xie, Henson, for (06) Unlimited Breach of Contract / Warranty in the District Court of Santa Cruz County.

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BRAD C. BRERETON (SBN 111266)
SASHA SHAHABI (SBN 298070)
GABRIELLE J. KORTE (SBN 209312)
BRERETON, MOHAMED, & TERRAZAS LLP
1362 Pacific Avenue, Second Floor
Santa Cruz, CA 95060
Tel: (831) 429-6391
Fax: (831) 459-8298
ss@brereton.law
gjk@brereton.law

Attorneys for Plaintiff
Tom Ebert

SUPERIOR COURT OF THE STATE OF CALIFORNIA
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IN AND FOR THE COUNTY OF SANTA CRUZ
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UNLIMITED JURISDICTION
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13 TOM EBERT, an individual, CASE NO. 19CV03672
14 Plaintiff,
PLAINTIFF TOM EBERT’S CLOSING
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vs. TRIAL BRIEF
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AMERICAN ABALONE FARMS, LLC,
17 {a California Limited Liability Trial Date: November 28, 2023
18 Company), OCEAN QUEEN USA, Time: 10:00 a.m.
INC., (a California Corporation); Dept.: 5
19 JAMES HO (an individual) and DOES
1-50, inclusive,
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21 Defendants,

22 And related Cross-Complaint

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24 Plaintiff/Cross-Defendant Tom Ebert hereby submits this Closing Trial Brief after

25 the court trial in front of the Honorable Timothy Volkmann, in Department 5 of the Santa
26 Cruz County Superior Court, from November 28 through December 14, 2023.
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Plaintiff Tom Ebert’s Closing Trial Brief
TABLE OF CONTENTS

I INTRODUCTION ..............
IL. LEGAL ARGUMENT..............
A. PLAINTIFF’S WAGE AND HOUR CLAIMS
1 Plaintiff Tom Ebert Proved At Trial That He Was the Employee of Defendants
and Thus Entitled to Labor Code Protections.............
Defendants are Jointly and Severally Liable for All Labor Code Violations
Committed During Mr. Ebert's Employment 11
Defendants Committed Numerous Labor Code Violations During Mr. Ebert’s
Employment..........
10
All Defendants’ Affirmative Defenses to Mr. Ebert’s Wage & Hour Claims Fail
11 as a Matter of Law .... 21
12 Defendants are Estopped From Denying They Owe Mr. Ebert's Unpaid
13 Wages and Expenses Because Mr. Ho Promised That Ocean Queen Would
Pay the Debt............. 225
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15 B. PLAINTIFF’S CONTRACT CLAIMG.............. 26
1. Defendants Breached the Sales Agreement By Failing to Pay Mr. Ebert the
16
Accounts Receivable and Cash on Hand 26)
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2. Defendants Breached the Employment and Other Agreements 28)
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C. SUMMARY OF PLAINTIFF’S TOTAL DAMAGES 29
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D. AAF AND OCEAN QUEEN USA’s CROSS-CLAIMS .............. 29)
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IV. CONCLUSION 33
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Plaintiff Tom Ebert's Closing Trial Brief
TABLE OF AUTHORITIES
Cases

Adams Mfg. & Eng. Co. v. Coast Centerless Grinding Co. (1960) 184 Cal.App.2d 649 11

Brown v. Superior Court (2011) 199 Cal.App.4th 971 12)

Cristler v. Express Messenger Sys., inc. (2009) 171 Cal.App.4th 72.....

Currie v. Workers’ Comp. Appeals Bd. (2001) 24 Cal. 4th 1109 Wane e eee ttee tert ntenneneeneenens 13

Doe v. Regents of University of California (2022) 80 Cal.App.5th 282 eee 22

Dynamex Operations W. v. Superior Court (2018) 4 Cal.5th 903
10
Enea v. Sup. Ct. (3-D) (2005) 132 Cal.App.4* 1559 deen ee nee . seeeeeeeee 26
11
Espejo v. The Copley Press (2017) 13 Cal.App.5" 329
12
13 Garcia v. Border Transportation Group, LLC (2018) 28 Cal.App.5" 558

14 Ghory v. Al-Lahham (1989) 209 Cal.App.3d 1487 16
15 22)
Golden Rain Foundation v. Franz (2008) 163 Cal.App.4th 1141 ....
16
Martinez v. Combs (2010) 49 Cal.4th 35 10
17
Mendoza v. Continental Sales Co. (2006) 140 Cal.App.4th 1395 serene seeeeeeeee 26
18
19 Mirabile v. Smith (1953) 119 Cal.App.2d 686............. 11

20 eeene eee eeeeeeeeeseeeeeeeeeeeeees 12
On Line Power Inc. v. Mazur (2007) 149 Cal.App.4" 1079 ween
21
People ex. Rel. Harris v. Rizzo.......... 26
22
Regent Alliance Ltd. v. Rabizadeh (2014) 231 Cal.App.4th 1177.......... 26
23
Richman v. Hartley (2014) 224 Cal.App.4th 1182 ceeteneeneeneeeeeeeeeeaeeaee
gan eas e nae nreeeeaeenes 20)
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25 Rosenfeld, Meyer & Susman v. Cohen (1987) 191 Cal.App.3d 1035 deeeeeeeeeeeneeseeeeeeeeenl 26
26 Seviour-lloff v. LaPaille (2022) 80 Cal.App.5" 427. steeeaneeeseennernen see eeteennnntee steeeeeee een 20
27
Warren v. Atchison, T. & S.F. Ry. Co. (1971) 19 Cal.App.3d 24 oe ene trent eneeneeereenes 23
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Plaintiff Tom Ebert's Closing Trial Brief
Winterrowd v. American Gen. Annuity Ins. Co. (9th Cir. 2009) 556 F3d 815 sete 13

Statutes

CA Civil Code § 2307 wt ee eeeeeeee niet een eee eeeeeeteeteeteeeneseeinertenternerseypeeeeeeeenenes sreeeeeeeeeae 20

CA Evid. Cade § 623. eee nn a a nnneer ener erere ene 17, 20)

CA Evid. Code §1221 sane see seen de eeeneenenannanneees ae ees eeeaeaae ec reenenenee 20

CA Code of Civil Procedure §389 22)

CA Labor Code. §98.2 oe esccesesecesssesenesseesenseescnsssensscesarseessnecesaeenentanseesesaearersneneeney 13

CA Labor Code § 200............ 12, 19)
10
CA Labor Code §202............ wees 15]
1
12 CA Labor Code § 204 er eee ea tens eae
eee eee enee teen teeeeeeeeeereeeeeeeeeeenensnenes 14

13 CA Labor Code § 210.... 14
14 12
CA Labor Code §218
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CA Labor Code. § 218.5 oo. eeseeeseseesesesesesssesseesenenssnensseasaescesesesensneseesaeerseetanenenenraeey 13
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CA Labor Code § 510 cenencensaenneectaneeeee sreccesanane eae penseesedans
cee neeeaeenerennensesseseeseeeeeserreneees® 14
17
18 CA Labor Code § 515............. 14

19 CA Labor Code §558.1.. veeedeee nee eeeeeseeeeea tee netteetereseeeeteneeneeneenes 17, 18
20
CA Labor Code § 1194 wena nnn eee e te ter nee e tent n e terete rec cesses neeeeeeeeseeeeneeneeneenrerseneneneres 13, 14
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CA Labor Code §1194.2 ..cccssssecssscssssssssssssenssessesseenssececssteeesareeesescseaneenstenesssereeses 13)
22
CA Labor Code § 1197 seeneeeaneneeeeeeeeeeenaesaneeseensaesaeeaeseeseesaeeae® 13
23
24 CA Labor Code § 1197.1 ......... 13
25 CA Labor Code § 2775 se eeaeeseneuneeeeees a eaeesen san erste ne aease ne sceneiaeeeees . seeanseeeeee 7,8
26
CA Labor Code § 2802 we ne teen ce teeter eee e aaa e e eeeeneeeeeeeeeceeeeteteeeeenesseeeneereges 15
27
CA Labor Code § 3357
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Plaintiff Tom Ebert's Closing Trial Brief
Other Authorities

CACI 213 20

CACI 2701. oe ccsseeessesesesteeeeeeeeesereassnesecsuessuanasssseeansennserescaeauaesensnsessneseosanenececeratersneneane 13

CACI 303 20

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Plaintiff Tom Ebert's Closing Trial Brief
I INTRODUCTION

Over the course of a nine-day court trial, Plaintiff Tom Ebert (“Mr. Ebert’) clearly

proved all his claims against Defendants American Abalone Farms, LLC (“AAF”), James

Ho (“Mr. Ho”), Ocean Queen USA, Inc. (“Ocean Queen”), and Hensen Xie (“Mr. Xie”) for

breach of contract and Labor Code violations. As set forth below, Mr. Ebert therefore

requests that this court enter judgment in his favor the amount $244,980.67."

It is undisputed that Mr. Ebert was to receive $10,000 per month for his work as a

general manager for AAF under Mr. Ho, and $7,500 per month under Mr. Xie. At trial,
10
Mr. Ebert testified that he is owed $76,300.00 in deferred pay. Mr. Ebert’s testimony
11
12 regarding his unpaid wages was corroborated with documentary evidence, including

13 hundreds of pages of contemporaneous emails between the parties, bank statements,
14
and QuickBooks reports.
15
In response, Defendants failed to produce sufficient evidence to rebut Mr. Ebert's
16
17 claims, arguing only that Mr. Ebert is “responsible for his own damages” by deferring his

18 pay. However, Defendants’ argument is factually and legally without merit, as Mr. Ho
19 testified, under cath, in deposition that he himself instructed Mr. Ebert to defer his pay
20
until the company had sufficient funds. Most importantly, equitable defenses such as
21
waiver and comparative negligence are not permitted in a labor code action for public
22
23 policy reasons. At trial, Mr. Ebert also established that he is owed unreimbursed

24 business expenses, including credit card debt for which he had a personal guarantee,
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28 ' Assuming he prevails on his wage and hour claims, Mr. Ebert will bring a separate
motion seeking statutory attorney fees and costs pursuant to the Labor Code and applicable law.
6

Plaintiff Tom Ebert's Closing Trial Brief
because these expenses were incurred during his employment and a claim for

unreimbursed expenses was timely included in Mr. Ebert's First Amended Complaint.

Additionally, Mr. Ebert established at trial that Defendants breached the

agreement for the sale of AAF to Mr. Ho and Ocean Queen by failing to pay Mr. Ebert

the cash on hand and accounts receivable due per the terms of the contract. Moreover,

Mr. Ho promised to “work it out” and pay these amounts to Mr. Ebert after he started

lemployment as general manager. Mr. Ho is thus equitably estopped from denying he

lowes this debt to Mr. Ebert. Mr. Ebert bolstered his claim for contract damages by
10
producing an April 12, 2019, email setting forth the debt, which AAF and Ocean Queen
11
failed to refute. As discussed below, the failure of AAF’s former co-owners to join this
12
13 lawsuit does not constitute a bar to Mr. Ebert seeking contract damages because

14 “complete relief’ can be granted to those already parties to the lawsuit, and there is no
15
tisk of double recoveries.
16
On the other hand, Defendants failed to prove any of their crossclaims against
17
Mr. Ebert. Mr. Ho's testimony at trial lacked credibility and was directly contradicted by
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19 the email evidence and Mr. Ho's previous deposition testimony.

20 For the reasons set forth below, Mr. Ebert respectfully requests that this court
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enter judgment in his favor and against Defendants.
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NW
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24 H

25 H
26 HW
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Plaintiff Tom Ebert's Closing Trial Brief
Ul. ARGUMENT
A. PLAINTIFF’S WAGE AND HOUR CLAIMS
1. Plaintiff Tom Ebert Proved at Trial That He Was the Employee of
Defendants and Thus Entitled to Labor Code Protections.

There is no question that Mr. Ebert worked as an employee. As set forth more

fully in Mr. Ebert’s opening Amended Trial Brief, once a plaintiff produces evidence that

they performed services for the defendant, the plaintiff is entitled to a presumption of

employee status under the California Labor Code. (CA Labor Code § 3357; Cristler v.

10 Express Messenger Sys., Inc. (2009) 171 Cal.App.4th 72, 84.) The burden is then
11
shifted to the defendant to prove all three prongs of the “ABC test” for independent
12
contractor status set forth in CA Labor Code § 2775(b)(1). A defendant's failure to
13
establish any one of the three prongs means a win for the plaintiff on this issue.
14
15 (Dynamex Operations W. v. Superior Court (2018) 4 Cal.5th 903, 964.) Here, there is

16 no dispute that Mr. Ebert worked for Defendants as the general manager of AAF. Thus,
17
the burden was on Defendants to prove that Mr. Ebert was an independent contractor.
18
As described below, Defendants come nowhere near meeting this burden.
19
20 At trial, Mr. Ebert testified that he ran the day-to-day operations of American

21 Abalone Farms from July 2018 through August 2019. From the beginning, Mr. Ebert’s

22 job duties included overseeing abalone production, sales, permitting, and managing
23
people. (Trial Transcript (“Tr.”) 11/28/2023 133:15-18.) Later, Mr. Ho expanded Mr.
24
Ebert's duties to include overseeing the renovation and running of Mr. Ho’s failing
25
26 restaurant. (Tr. 11/29/2023 73:10-20.) In their discovery responses, each of the

27 Defendants admits that “AAF was Plaintiff's employer.” (Exh. 27, Form Interrogatory
28
8

Plaintiff Tom Ebert's Closing Trial Brief
(Employment Law) No. 209.2.) Nonetheless, Defendants asserted at trial that Mr.

Ebert had in fact worked as an Independent Contractor.

In support of this affirmative defense, Defendants pointed to a draft consulting

agreement (never signed), Mr. Ebert's use of the term “management fees”, and a

document wherein Mr. Ebert referred to himself as doing “consulting” work for AAF. Mr.

Ho testified that Mr. Ebert allegedly requested that he be classified as an independent

contractor. During cross-examination of Mr. Ebert, defense counsel also offered

unsubstantiated innuendo regarding Mr. Ebert’s inadmissible tax filings as an alleged
10
motive for the purported classification request. However, none of these arguments are
11
factually or legally sufficient for Defendants to meet their burden of proving this
12
13 affirmative defense.

14 In fact, Defendants fail to meet any of three prongs of the ABC test. First, the
15 evidence at trial establishes that Mr. Ebert was not in fact free from the control and
16
direction of Defendants. (CA Labor Code § 2775(b)(1)(A).) Mr. Ebert testified that he
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reported to and took direction from James Ho and Ocean Queen employees Tracy Cui,
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19 Jade Hu, and David Wang. (Tr. 11/29/2023 12:21-13:11.) James Ho made all the

20 financial decisions as well as decisions regarding the direction of the company.
21
(11/29/2023 Tr. 13:22-14:1.) Mr. Ebert’s testimony was corroborated by the extensive
22
email evidence, admitted as plaintiffs Exhibit 3. Therefore, Defendants fail to establish
23
24 the first prong of the ABC test.

25 Second, the evidence establishes that Mr. Ebert did not perform any work
26 outside the usual course of AAF’s business. (CA Labor Code § 2775(b)(1)(B).)
27
Defendants offered no evidence or testimony to rebut Mr. Ebert's testimony that he did
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Plaintiff Tom Ebert's Closing Trial Brief
not perform any work outside of AAF’s day-to-day operations. (Tr. 11/28/2023 134:24-

135:6.) Therefore, Defendants fail to meet the second prong of the ABC test.

Third, Defendants offered no evidence that Mr. Ebert had an independently

established trade, occupation, or business of the same nature as the work he performed

at AAF, or any other indicia of independent contractor status. (CA Labor Code §

2775(b)(1)(C); Garcia v. Border Transportation Group, LLC (2018) 28 Cal.App.5" 558,

590.) Instead, Mr. Ebert's provided undisputed testimony that he performed work solely

for his employers and used their equipment to do so. (Tr. 11/28/2023 134:16-19; Tr.
10
11/28/2023 134:21-23; Tr. 11/29/2023 14:22-25.) Thus, Defendants fail to establish the
11
third prong of the ABC test.
12
13 Moreover, Mr. Ho’s testimony that Mr. Ebert desired to be an independent

14 contractor rather than an employee is contradicted not only by Mr. Ebert's testimony but
15
also by the contemporaneous emails exchanged between the parties. (11/28/2023 Tr.
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121:12-14; 11/28/2023 Tr. 121:15-17; Plaintiffs Exh. 3) The emails also establish that
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Mr. Ho's own attorney advised Mr. Ho to classify Mr. Ebert as an employee, and that
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19 Mr. Ho disregarded that advice. (Plaintiffs Exh. 3.) Moreover, it is irrelevant to the legal

20 analysis that Mr. Ho considered Mr. Ebert to be an independent contractor. “The label
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placed by the parties on their relationship is not dispositive, and subterfuges are not
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countenanced.” (Espejo v. The Copley Press (2017) 13 Cal.App.5" 329, 343.) Plainly,
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24 Defendants have failed to establish that Mr. Ebert was an independent contractor and

25 thus the presumption of his employee status remains unrebutted.
26 “
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Plaintiff Tom Ebert's Closing Trial Brief
2. Defendants are Jointly and Severally Liable for All Labor Code

Violations Committed During Mr. Ebert’s Employment

As discussed more fully in Mr. Ebert’s opening Amended Trial Brief, a plaintiff

may establish that a person or entity is their employer simply by showing that the

person or entity (or agent of the person or entity), directly or indirectly: (2) employs a

worker by contract, permits work by acquiescence, or suffers work to be performed by a

failure to hinder. (Martinez v. Combs (2010) 49 Cal.4th 35, 71.) In addition to business

entities, owners and proprietors of business entities can be held directly liable as
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11 employers. (/d.) In this case, Mr. Ebert easily established at trial that all four

12 Defendants were his employers. As such, all four Defendants are jointly and severally
13
liable for the labor code violations committed during Mr. Ebert's employment.
14
First, as admitted repeatedly by Defendants in their discovery responses, AAF
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16 was Mr. Ebert's employer. Next, Mr. Ho was Mr. Ebert’s employer because he and his

17 agents employed and permitted Mr. Ebert to work. Mr. Ho also completed the ultimate
18 act of an employer by terminating Mr. Ebert's employment in April 2019. Ocean Queen
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was also Mr. Ebert’s employer because Ocean Queen was the owner of AAF and
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Ocean Queen’s employees directed Mr. Ebert to work. Mr. Xie is similarly an employer
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22 because he employed Mr. Ebert and permitted him to work.

23 Moreover, under California Labor Code § 558.1, Mr. Ho and Mr. Xie cannot hide
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behind an LLC to avoid personal liability, because both caused the labor code
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violations. Mr. Ho deliberately misclassified Mr. Ebert as an independent contractor,
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underfunded AAF, and told Mr. Ebert not to pay himself until AAF made enough money.
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28 He further failed to pay Mr. Ebert his deferred pay as demanded on April 12, 2019, and
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Plaintiff Tom Ebert's Closing Trial Brief
as promised on April 30, 2019. Mr. Xie promised to fund AAF and fix the broken sea

pipe, failed to properly fund the company, and continued to permit Mr. Ebert to work

without pay. Like Mr. Ho, Mr. Xie was aware Mr. Ebert was owed wages, promised to

pay those wages, then failed to do so. The evidence also showed that Mr. Ho is the

sole owner of Ocean Queen and moved money from Ocean Queen to AAF. There is

such unity of interest and ownership between the companies that Ho is also liable under

an alter ego theory. Mr. Ho is also liable under a vicarious liability theory for the actions

of his agents.
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Mr. Ebert respectfully requests that this court hold all four Defendants? jointly and
14
severally liable for their Labor Code violations.
12
13 3. Defendants Committed Numerous Labor Code Violations During Mr.
14 Ebert's Employment.
15
Again, Defendants do not dispute that Mr. Ebert was to be compensated $10,000
16
per month as a salary for his work as general manager. (Exh. 27, see e.g., Responses
17
18 to Form Interrogatory (Employment) No. 200.1.) Mr. Ebert testified at trial that he had to

19 defer a total of $76,300.00 in pay due to Mr. Ho’s and Mr. Xie’s chronic underfunding of
20 the company. Mr. Ebert corroborated his testimony with bank statements and other
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records. On April 12, 2019, Mr. Ebert informed Ocean Queen employee and agent
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? Although Mr. Ebert has obtained an entry of default against Mr. Xie, he was not
25 permitted to receive a default judgment prior to trial. Default judgment is not proper where the defaulting
defendant's liability is dependent upon the answering defendant being held liable. (Adams Mfg. & Eng.
26 Co. v. Coast Centerless Grinding Co. (1960) 184 Cal.App.2d 649, 66.) Similarly, no default judgment can
27 be taken where several defendants are sued on a joint liability, and one of them answers asserting
defenses which would exonerate the default defendant from such liability. (Mirabile v. Smith (1953) 119
28 Cal. App.2d 685, 689.)
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Plaintiff Tom Ebert’s Closing Trial Brief
Tracy Cui via email that was he was still owed wages. On April 16, 2019, Mr. Ebert

further informed Ocean Queen employees that it was unlawful to fail to pay an

employee their wages. When Mr. Ebert resigned his employment in a text to Mr. Xie in

August 2019, he informed Mr. Xie that he was owed his salary, which Mr. Xie promised

to pay but did not. Despite a last-minute subpoena to Bank of America to obtain

thousands of pages of AAF’s bank records, Defendants failed to introduce any evidence|

to show that Mr. Ebert was actually paid all his wages, or otherwise dispute his claims.

To the extent that Defendants may now attempt to argue that Mr. Ebert should
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have paid himself wages rather than paying back his personal loans to the company,
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they are equitably estopped from doing so because Mr. Ho himself instructed Mr. Ebert
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13 to defer his wages while he paid other debt. Mr. Wang also instructed Mr. Ebert to pay

14 himself back the loans in short time period.
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As set forth below, Defendants’ refusal to pay Mr. Ebert his deferred pay has
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resulted in multiple Labor Code violations. Each violation carries with it penalties, costs,
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attorney's fees, and interest. Total unpaid wages, penalties, and interest (exclusive of
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19 attorney fees and costs) related to Mr. Ebert's wage and hour claims total $171,533.58.

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a. Nonpayment of Wages (Labor Code Sections 200, 218)
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22 Mr. Ebert’s unpaid wages are $53,800 from August 2018 through April 2019, and

23 $22,500 from May 2019 through July 2019, for a total of $76,300. (Tr. 11/30/23 4:12-
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5:16, 5:20-6:13; Exh. 7, 11, 28.)
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“Wages” are defined as amounts owed for labor performed by “employees of any
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description,” and even includes the salaries of executive employees. (Labor Code

28 Section 200, On Line Power ine. v. Mazur (2007) 149 Cal_App.4"" 1079.) Wages owed
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Plaintiff Tom Ebert’s Closing Trial Brief
include those whose payment has been deferred. (Brown v. Superior Court (2011) 199

Cal.App.4th 971, 994.) Pursuant to Labor Code 218, an employee may bring a lawsuit

against an employer to recoup payment of unpaid wages.

An action to recover backpay is an action for damages within the meaning of

California Civil Code section 3287(a), and interest is recoverable on each salary

payment from the date it was due. (Currie v. Workers' Comp. Appeals Bd. (2001) 24

Cal. 4th 1109, 1115.) A successful plaintiff in a civil action to recover unpaid wages or

other forms of employee compensation is entitled to recover his or her attorney fees.
10
(Lab. Code. §§ 98.2(c), 218.5, 1194(a); see Winterrowd v. American Gen. Annuity Ins.
11
Co. (9th Cir. 2009) 556 F3d 815, 820.)
12
13 Mr. Ebert’s claim for unpaid wages is calculated as follows, after the sale of the

14 business on July 27, 2019. His salary is pro-rated for the final working days of July,
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2019:
16
MW
17
Mt
18
19 iW

20 Wt
21
ut
22
Mf
23
24 Wf

25 Wt
26 Wt
27
Wt
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Plaintiff Tom Ebert's Closing Trial Brief
[FAILURE TO PAY WAGES
SALARY DUE PAID UNPAID SALARY!
JULY 2018 $ 1,600.00 1,600.00

_|auGusT 2018 $ 10,000.00 10,000.00

SEPTEMBER 2018 $ 10,000.00 10,000.00

_{OCTOBER 2018 i. $ 10,000,00 7,000.00 $ 3,000.00

NOVEMBER 2018 10,000.00 7,000.00 6,000.00

DECEMBER 2018 10,000.00 is 16,000.00
10 seventh
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"JANUARY 2019 10,000.00 26,000.00
12 FEBRUARY 2019 10,000.00 36,000.00

13
MARCH 2019 10,000.00 2,200.00 43,800.00
14
APRIL 2019 $ 10,000.00 53,800.00
15
ann eh
16 MAY 2019 _ $ 7,500,00 61,300.00

17
JUNE 2019 $ 7,500.00 $ 68,800.00
18
[JULY 2019 $ 7,500.00 - $ 76,300.00
19 37,800.00 /'$ 76,300.00 |
$ 114,100.00 $
20 a
i
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TOTAL UNPAID SALARY AT AGREED RATE $ 76,300.00
22
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b. Failure to Pay Minimum Wages (Labor Code Sections 1194, 1194.2,
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1197.1)
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Defendants’ failure to pay Mr. Ebert any wages for many months resulted in
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repeated violations of California's minimum wage law.
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Plaintiff Tom Ebert's Closing Trial Brief
Labor Code § 1197 requires that employees be paid at least the minimum wage

established by law. (See also CACI 2701.) The minimum wage in California was

$10.50 per hour in 2018 and $11.00 per hour in 2019, Pursuant to Labor Code § 1194,

employees paid less than minimum wages are entitled to the balance of unpaid wages,

interest thereon, reasonable attorneys’ fees, and costs of suit. Under CA Labor Code

§1194.2, employees paid less than minimum wage are further entitled to receive

liquidated damages (“double damages.”) Under Labor Code § 1197.1, Defendants are

also liable for civil penalties in the amount of $100 for the first pay period they failed to
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pay minimum wage, and $250 for each pay period thereafter.
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Mr. Ebert received partial payment of wages through November 2018. Beginning
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13 in December 2018, Mr. Ebert received no payment of wages and was not even

14 receiving minimum wage. The penalties for Failure to Pay Minimum Wage begin
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accruing in December 2018 and are calculated monthly on the balance of his unpaid
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wages.
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The civil penalty for Failure to Pay Minimum Wage is calculated on the number of|
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19 pay periods in which Mr. Ebert did not receive a payment of minimum wage. Mr. Ebert

20 was not paid for 8 time periods, from July 2018-July 2019.
21
Wt
22
23 MW

24
MW
25
26 MW
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Plaintiff Tom Ebert's Closing Trial Brief
om
T
1 I
FAILURE TO PAY MINIMUM WAGE Min Salary Per Yr Per Mo

— |t 2018} $ 43,680.00 | $ 3,640.00
2019} $ 45,760.00 | $ 3,813.33

SALARY DUE PAID UNPAID SALARY! Unpaid Min Wages
[JULY 2018 $ 1,600.00 1,600.00 | $ -
{
4
AUGUST 2018 $ 10,000.00 10,000.00 $ _

SEPTEMBER 2018 10,000.00 10,000.00 $

OCTOBER 2018 $ 40,000.00 7,000.00 $ 3,000.00

10 NOVEMBER 2018 10,000.00 7,000.00 6,000.00
11
DECEMBER 2018 10,000.00 16,000.00 3,640.00
12
13 JANUARY 2019 10,000.00 26,000.00 3,813.33
14 FEBRUARY 2019 10,000.00 36,000.00 3,813.33
15
MARCH 2019 0,000.00 00.00 43,800.00 3,813.33
16
APRIL 2019 10,000.00 53,800.00 3,813.33 |
17
18 MAY 2019 7,500.00 61,300.00 3,813.33|
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JUNE 2019 7,500.00 $ 68,800.00 3,813.33|
20 _

21
JULY 2019 7,500.00 - $ 76,300.00 3,813.33
114,100.00 37,800.00 | $ 76,300.00 30,333.33
22
23 MW
24
Wt
25
26 Mt
27
MW
28
17

Plaintiff Tom Ebert's Closing Trial Brief
FAILURE TO MINIMUM WAGES-liquidated damages
LABOR CODE 1194.2.
LIQUIDATED DAMAGES for unpaid Minimum Wage $ 30,333.33

CIVIL PENALTY for FAILURE TO PAY MINIMUM WAGE
$100 for First missed Pay Period, $250 for each subsequent missed Pay Period
8 Pay Periods $ 1,850.00
a een
TOTAL CLAI M
wee $ 32,183.33

c. Failure to Pay Overtime (Labor Code Section 510, 1194.)

Defendants’ failure to pay Mr. Ebert at any wages for many months resulted in
10
repeated violations of California’s overtime laws.
11
Under Labor Code § 510, employers are required to compensate employees at
12
13 time and a half for working overtime. (See also CACI 2702.) As explained in Mr.

14 Ebert's initial trial briefing, Defendants are not entitled to claim an overtime exemption
15
under Labor Code § 515 because by paying Mr. Ebert no wages at all, they fail to meet
16
the minimum salary requirement for the exemption.
17
Pursuant to Labor Code § 1194, employees who are not paid time and a half for
18
19 overtime hours are entitled to the balance of unpaid wages, interest thereon, reasonable|

20 attorneys’ fees, and costs of suit.
21
d. Failure to Pay Wages Timely (Waiting Time Penalties Under Labor
22 Code Section 204, 210)

23 Labor Code § 204 requires employers to pay wages in a timely manner.
24
Defendants have failed to pay Mr. Ebert his unpaid wages for over four (4) years.
25
Under Labor Code § 210, employers who fail to pay wages timely are required to
26
27 pay penalties of $100 for the initial violation, then, for each subsequent violation, two

28
18

Plaintiff Tom Ebert's Closing Trial Brief
hundred dollars ($200) for each failure, plus 25 percent of the amount unlawfully

withheld.

Mr. Ebert’s Failure to Pay Wages Timely claim is calculated as follows:

Mr. Ebert was not paid for 10 time periods, from October 2018-July 2019. The

penalty for Willful Failure to Pay Wages is calculated on the $76,300.00 unpaid wages.
4
FAILURE TO PAY WAGES TIMELY
LABOR CODE 204, 210 |
CIVIL PENALTY for FAILURE TO PROVIDE ACCURATE WAGE STATEMENTS
$100 for First missed Pay Period, $200 for each subsequent missed Pay Period
10 pay periods $ 1,900.00
10 AND
PENALTY for WILLFUL FAILURE TO PAY WAGES
11 25% OF UNPAID WAGES $ 19,075.00
12
TOTAL CLAIM $ 20,975.00
13
14
e. Failure to Pay Wages Upon Discharge/Quitting (Labor Code Sections
15
16
202, 203.)
17 When an employee “quits” employment, the employer must pay all compensation

18 due and owing within 72 hours of resignation, or on the employee's last day of work if
19
the employee gives more than 72 hours' notice of resignation. (Lab. Cade § 202.)
20
Defendants failed to pay Mr. Ebert his wages in August 2019 when he resigned his
21
22 employment.

23 Defendants who fail to pay all compensation owed upon an employee’s
24 discharge are liable for “waiting time” penalties under § 203. The “waiting time” penalty
25
under Labor Code § 203 is one day of pay at the employee's regulate rate for each day
26
the owed wages go unpaid, up to 30 days. Defendants failed to pay Mr. Ebert his
27
28 lwages upon Mr. Ho’s termination of his employment on April 30, 2019.
19

Plaintiff Tom Ebert’s Closing Trial Brief
Mr. Ebert's Failure to Pay Wages Upon Quitting/Discharge claim is calculated as

follows:

Mr. Ebert’s regular rate of pay, based upon his monthly salary of $7,500.00 at the

time of his termination, was $346.15 per day.

CIVIL PENALTY for FAILURE TO PAY WAGES UPON DISCHARGE
Employee's Regular Rate of Pay for Each Day Owed Wages Went Unpaid;

Annual Wage @ $7,500.00] per month i
$ 43.27 {per hour
$346.15 |per day

10
11 30 days at $346.15 per day TOTAL $ 10,384.62 |
12 f. Failure to Reimburse Business Expenses (Labor Code Section 2802.)
13
Employers are required to reimburse their employees for all work-related
14
expenses incurred by the employee in direct consequence of the discharge of their
15
duties. (Labor Code Section 2802.) Here, Mr. Ebert testified that the expenses
16
17 claimed were incurred during his employment and before the filing of the instant action.

18 It is irrelevant that AAF's refusal to pay off the debt did not occur until after the instant
19
action was filed. It is sufficient that Mr. Ebert incurred the expenses during his
20
employment and was forced to pay off the credit card debt to protect his credit. Mr.
21
22 Ebert is owed $1,862.00 for payment to Coast Produce (11/30/2023 10:18-25; 12:1-

23 15:2; Exh. 16, 17), and $8,774.48 and $9,161.60 for the credit card debt incurred during
24 his employment. (11/30/2023 15:6-29:6; Exh. 15.)
25
Employers who fail to reimburse their employees are liable for the amount of
26
expenses, plus attorney’s fees and costs.
27
28
20

Plaintiff Tom Ebert’s Closing Trial Brief
Mr. Ebert's Failure to Reimburse Business Expenses claim is calculated

as follows:

All debts owed reflect interest accrued since the date the date incurred through

February 26, 2024 at an annual rate of 10%, with the exception of the loan Mr. Ebert

mad on January 4, 2019 which accrues at 8%.

_ Date Debt Interest Interest! Total Interest} TOTAL
Incurred Amount] | #Days Per Day Accrued} DEBI
LOANS
"Te AAF from Tom Ebert 1/4/2019} $500.00 1879) 8.00%: $ O11} $ 205.92 $ 705.92

CREDIT CARDS _
10 Bank
of America: 10/1/2022 $7,409.00] 513) 10.00%: 2.03! 1,041.32
Capital One} 3/1/2019 $8,774.18) 1823) 10.00%: 2.40 4,382.28
11 $16,183.18 5,423.60 $ 21,606.78
MISCELLANEOUS DEBTS OWED!
12 Coast Produce: 7/23/2019) $1,862.80 1679! 10.00% O51 856.89 nse
Crab Disaster Relief. 8/1/2029) $4,134.98) 1670; 10.00% 1,13 1,891.89
13 } $5,997.78) 2,748.78 | | $ 8,746.56,

14
TOTAL _ $22,680.96) $8,378.30) $21,059.26)
15
16
17 4. All Defendants’ Affirmative Defenses to Mr. Ebert’s Wage & Hour

18 Claims Fail as a Matter of Law
19
As set forth more fully in Mr. Ebert's opening Amended Trial Brief, as well as in
20
plaintiff's Motion in Limine # 4, all of Defendants’ equitable defenses, including estoppel,
21
unclean hands, waiver, and comparative negligence, to Mr. Ebert’s statutory claims for
22
23 wage and hour violations are barred as a matter of law. “Principles of equity cannot be

24 used to avoid a statutory mandate.” (Ghory v. Al-Lahham (1989) 209 Cal.App.3d 1487.)
25
An employee simply cannot waive his rights to unpaid wages; any agreement to the
26
contrary is void as against public policy and the Labor Code. Thus, Defendants’
27
28
21

Plaintiff Tom Ebert's Closing Trial Brief
argument that Mr. Ebert is somehow “responsible for his own damages” automatically

fails as a matter. (Tr. 11/28/2023 22:3-9.)

Even assuming, arguendo, that Defendants were entitled to assert these

equitable defenses, Defendants failed to provide any evidence that Mr. Ebert caused his|

jown wage loss by deferring his pay. At trial, Mr. Ho claimed that it “never crossed (his)
4
mind, it was never talked about,” and “never in the picture” that Mr. Ebert’s salary

would be deferred. (Tr. 12/1/2023 18:22-19:11.) However, Mr. Ho was impeached with

the reading of his deposition transcript wherein he previously testified, under oath, that it
10
was a “condition” for payment of Mr. Ebert’s monthly salary that AAF have sufficient
11
funds, (Tr. 12/1/2023 20:3-9.) As the email evidence showed, Mr. Ho was fully aware
12
13 that AAF was so lacking in funds that Mr. Ebert had to personally loan the company

14 funds. Defendants are thus equitably estopped from claiming that Mr. Ebert caused his
15
own damages by deferring his pay as instructed by his boss. (CA Evid. Code § 623.)
16
As a last “Hail Mary,” and after four (4) years of litigation, Defendants asserted
17
for the first time in their Trial Brief that Mr. Ebert was in a “partnership” relationship with
18
19 AAF or some other persons, rather than in an employment relationship with Defendants.

20 Defendants further argue for an absurd interpretation of CA Labor Code §558.1 that
21
would make employees /iable to themselves for their employer's labor code violations.
22
Neither of these arguments has any merit.
23
24 First, neither of these claims were set forth in the Cross-Complaint, nor were they

25 listed as defenses in Defendants’ Answer to Plaintiffs First Amended Complaint. They
26 are thus waived. Defendants allege in their Cross-Complaint that Mr. Ebert violated a
27
“verbal employment agreement”, not a partnership agreement. (Cross-Complaint at
28
22

Plaintiff Tom Ebert’s Closing Trial Brief
124.) Furthermore, none of Defendants’ discovery responses, verified by James Ho,

contain any such claim of a “partnership.” (Plaintiffs Exh. 27.) At any rate, Defendants

failed to prove at trial that any such partnership existed.

To support their belated “partnership” claim at trial, Defendants pointed to an

October 25, 2018, email from Ocean Queen employee David Wang to Mr. Ebert asking

if Lance (restaurant manager) had spoken to Mr. Ebert about the possibility of running

the restaurant on a “partnership basis.” (Plaintiffs Exh. 3.) However, Mr. Ebert had no

idea what Mr. Wang was talking about, and indicated so in his email response.
10
(11/29/2023 Tr. 50:22-51:24; Plaintiffs Exh. 3.) Mr. Ebert had never proposed any such
11
“partnership.” (11/29/2023 Tr. 50:12-21.) Per Mr. Wang’s October 31, 2018, follow-up
12
13 email, the purported “partnership” was contingent on Mr. Ebert wanting to do it, and Mr.

14 Ebert signing a lease with the landlord. Mr. Ebert never wanted or accepted a
15
partnership in the restaurant, nor did Mr. Ebert ever sign a lease with the landlord;
16
instead, Mr. Ho himself signed a personal guarantee for the restaurant lease.
17
(11/29/2023 Tr. 52:16-18; Plaintiffs Exh. 3, p. 86.) At any rate, Mr. Ebert believed that
18
19 Mr. Wang was referring to an arrangement whereby American Abalone Farms would

20 manage the restaurant and James Ho would provide financial support. (11/29/2023 Tr.
21
53:12-17.)
22
Mr. Ebert never entered into a written or verbal partnership agreement, and the
23
10/31/2018 email was the last time Mr. Ebert ever heard anything about a proposed
24
25 “partnership.” (11/29/2023 Tr. 53:2-10.) Mr. Ebert had no understanding that he had
26 ever entered into a partnership, nor did he feel he could do so because he had no
27
ownership of AAF or the restaurant. (11/29/2023 Tr. 53:9-11; 11/29/2023 Tr. 20-22.).)
28
23

Plaintiff Tom Ebert's Closing Trial Brief
The Fictitious Business Name filing for the Pillar Point restaurant indicates that it was

d/b/a for AAF, not for any partnership. (Plaintiff's Exh. 21.) Clearly, there was no

“meeting of the minds” to create a partnership agreement. Defendants have failed to

provide evidence of any of the usual indicia of a partnership and have even failed to

establish who the parties to the purported p

Case Info

Judge

Cogliati, Syda Kosofsky Track Judge’s New Case

Case No.

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Document Filed Date

February 27, 2024

Case Filing Date

December 10, 2019

County

Parties

American Abalone Farms, Inc. Defendant
American Abalone Farms, Inc. Defendant
American Abalone Farms, LLC Defendant
American Abalone Farms, LLC Defendant
Brereton, Bradford Charles Attorney for the Plaintiff
Brereton, Bradford Charles Attorney for the Plaintiff
Brodsky, Sasha Attorney for the Plaintiff
Ebert, Tom Plaintiff
Ebert, Tom Plaintiff
Gumina, Paul Lewis Attorney for the Defendant
Gumina, Paul Lewis Attorney for the Defendant
Ho, James Defendant
Ho, James Defendant
Korte, Gabrielle Jan Attorney for the Plaintiff
Ocean Queen USA, Inc. Defendant
Ocean Queen USA, Inc. Defendant
Shahabi, Sasha Attorney for the Plaintiff
Xie, Henson Defendant
David Terrazas Attorneys for Plaintiffs
Michael Donohoe Attorney
Robert Arthur Attorney

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Motion-Secondary: Tom Ebert vs Ocean Queen USA, Inc., et al

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