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  • RLI Insurance Company vs Schricker Engineering Group Inc. Other Collections Unlimited (09)  document preview
  • RLI Insurance Company vs Schricker Engineering Group Inc. Other Collections Unlimited (09)  document preview
  • RLI Insurance Company vs Schricker Engineering Group Inc. Other Collections Unlimited (09)  document preview
  • RLI Insurance Company vs Schricker Engineering Group Inc. Other Collections Unlimited (09)  document preview
  • RLI Insurance Company vs Schricker Engineering Group Inc. Other Collections Unlimited (09)  document preview
  • RLI Insurance Company vs Schricker Engineering Group Inc. Other Collections Unlimited (09)  document preview
  • RLI Insurance Company vs Schricker Engineering Group Inc. Other Collections Unlimited (09)  document preview
  • RLI Insurance Company vs Schricker Engineering Group Inc. Other Collections Unlimited (09)  document preview
						
                                

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E-FILED 9/2/2020 4:10 PM Timothy Carl Aires, Esq. (138169) Clerk of Court AIRES LAW FIRM Superior Court of CA, 6 Hughes, Suite 205 Irvine, California 92618 County of Santa Clara (949) 718-2020 20CV370212 : (949) 718-2021 FAX Reviewed By: R. Tien Attorneys for Plaintiff, RLI INSURANCE COMPANY SUPERIOR COURT (UNLIMITED) OF THE STATE OF CALIFORNIA COUNTY OF SANTA CLARA RLI INSURANCE COMPANY, ) CaseNo. 20CV370212 ) Plaintiff, ) COMPLAINT FOR BREACH OF ) CONTRACT v. ) } ($25,688.00 DEMANDED) SCHRICKER ENGINEERING GROUP.) INC. aka SEG INC.; and DOES | through) [C.C.P. §425.10] 50, inclusive, ) ) Defendants. ) ) Plaintiff Wesco Insurance Company, by and through its undersigned attorneys, hereby alleges against Defendants, and each of them, as follows: PRELIMINARY ALLEGATIONS 1. Plaintiff RLI Insurance Company is now, and at all times relevant hereto was, a corporation duly organized and existing under the laws of the State of Illinois and qualified to do business in the State of California. 2. Plaintiffis informed and believes and based thereon alleges that Defendant Schricker Engineering Group Inc. aka SEG Inc. is now, and at all times relevant hereto was, a corporation COMPLAINTorganized under the laws of the State of California and doing business in the County of Los Angeles, State of California and within this judicial district. 3. Plaintiff is ignorant of the true names and capacities of the Defendants sued herein as Does 1 through 50, inclusive, and therefore sues these Defendants by such fictitious names. Plaintiff will amend this Complaint to allege the true names and capacities of said Defendants when the same is ascertained. Plaintiff is informed and believes and based thereon alleges that each of these fictitiously-named Defendants is jointly responsible in some manner for the transactions and /or occurrences herein alleged, and that the Plaintiff's injuries as alleged were proximately caused by such Defendants. 4. Plaintiff is informed and believes and based thereon alleges that at all times herein mentioned each of the Defendants was the agent of each of the remaining Defendants, and in doing the things hereinafter alleged, was acting in the course and scope of such agency with the permission and consent of its co-Defendants. Plaintiff is informed and believes and based thereon alleges that, at all times relevant hereto, a unity of interest has existed between Defendants such that any separateness between the Defendants has ceased and that it would sanction a fraud or promote an injustice if the separateness of the Defendants were recognized. Plaintiff is informed and believes and based thereon alleges that Defendants are successors in interest to a party liable to Plaintiff because: [1] There is an express or implied agreement of assumption with respect to the assets of the seller (or transferor); [2] The transaction amounts to a consolidation or merger of the two entities; [3] The purchasing entity is a mere continuation of the seller (or transferor); or [4] The transfer of assets to the purchaser (or transferee) is for the fraudulent purpose of escaping liability for the debts of the seller (or transferor). Plaintiff is informed and believes and based thereon alleges that, at all times relevant hereto, that certain of the Defendants were insolvent and/or rendered insolvent by the actions of other Defendants. Plaintiff is informed and believes and based thereon alleges that, at all times relevant 2 COMPLAINThereto, that certain of the Defendants were each active participants, for profit, in the common enterprise conducted through various other Defendants, using the same tangible and intangible assets, including equipment, employees, and goodwill. Plaintiff is informed and believes and based thereon alleges that, at all times relevant hereto, that the entity Defendants have been used by the individual Defendants as subterfuges for illegal, fraudulent and/or otherwise wrongful transactions. Plaintiff is informed and believes and based thereon alleges that, at all times relevant hereto, that Defendants, singularly and in combination, and as part of a common enterprise, knowingly and intentionally misrepresented the types and number of their employees in order to pay a smaller amount in premiums for the workers compensation insurance policy which is the subject of this action in violation of California law, e.g., Insurance Code §11760. Moreover, Plaintiff is informed and believes and based thereon alleges that, at all times relevant hereto, that Defendants were part of a fraudulent scheme not only to reduce the premium, rate, or cost of the workers compensation insurance policy which is the subject of this action, but to procure the policy itself in the first place based on false representations of material fact, all in violation of California law, e.g., Insurance Code §11760. Plaintiff is informed and believes and based thereon alleges that, at all times relevant hereto, Defendants were officers of a corporate or association employing unit or a person having charge of the affairs of a corporate or association employing unit, that knowingly undertook or agreed to pay without deduction from remuneration paid to its workers the amounts required by law to be withheld, that willfully failed to hold in trust the amount of worker contributions required of such workers as and for payroll taxes and other contributions, that willfully failed to file one or more complete and accurate returns or reports, that failed to supply required information with the intent to evade a tax imposed by law, and willfully and with like intent, made, rendered, signed, or verified one or more false or fraudulent returns, reports, or statements, and that supplied false or fraudulent information to taxing authorities, all in violation of California law, e.g., Unemployment Insurance Code §§2108, 2110.7, 2117.5, and 2118.5. Plaintiff is further informed and believes and based thereon alleges that the entity Defendants, at all times relevant hereto, were mere shells and shams without sufficient or adequate capitalization, that the entity Defendants were conceived, intended, and utilized by the natural person Defendants, and each of them, as devices to avoid individual 3 COMPLAINTSo ey ne SD liability and for the purpose of substituting financially insolvent business entities in the place of the natural person Defendants, and each of them, that other Defendants, and each of them, have failed to observe corporate formalities with respect to the activities of the entity Defendants, that other Defendants, and each of them, have used assets of the entity Defendants for personal use, that other Defendants, and each of them, have caused assets of the entity Defendants to be transferred to the other Defendants, and each of them, without adequate consideration, that other Defendants, and each of them, have caused the entity Defendants to pay excessive compensation to insiders at a time when the corporation was insolvent, that other Defendants, and each of them, have caused the entity Defendants to make distributions to shareholders at a time when the corporation was insolvent in violation of Corporations Code §500 et seq., and that, during a state of entity insolvency, Defendants, and each of them, engaged in conduct that diverted, dissipated, or unduly risked assets of the entity Defendants that might otherwise have been used to satisfy creditors’ claims. As a result of the preceding allegations, whether Defendants are the alter egos of one another, joint venturers, successors in interest, co-conspirators, or otherwise, Defendants are responsible for the debts, obligations and duties of one another. Plaintiffis informed and believes and based thereon alleges that the damage claim of Plaintiff is separate and distinct from any damage claim of the entirety of the class of the entity Defendants' creditors in that Plaintiff was the specific and particularized target of Defendants’ illegal, fraudulent and/or otherwise wrongful conduct. 6. This action is not subject to Civil Code §1812.10 or Civil Code §2984.4. The proper county for the trial of this action is the County of Los Angeles in that the Defendants, and each of them, contracted to perform the obligation sued upon and/or have their principal place of business in the County of Los Angeles and within this judicial district. Mt Mt Mt Mf Ml 4 COMPLAINTFIRST CAUSE OF ACTION (Breach of Contract Against All Defendants) oe Plaintiff hereby incorporates by reference paragraphs 1 through 6, inclusive, of this Complaint as if set forth in full in this paragraph. 8. On or about May 9, 2019, Plaintiff upon the request of Defendants for Workers Compensation and Employers Liability Insurance coverage, provided Defendants with an Insurance Policy No. PSW0001436, Insurance Policy No. PSB001539, and Insurance Policy No. PSE0001349 for the period of 5/9/2019 through 5/9/2020 (but cancelled 9/12/2019), which was subject to an audit and recomputation of its premium (the “2019 Policies”). Plaintiff is authorized under the 2019 Policies to examine and audit all records that relate to the 2019 Policies during the policy period. The 2019 Policies provides that the final premium will be determined by using the actual premium basis and the proper classifications and rates as determined by an audit. The 2019 Policies further obligated Defendants to pay the difference between the estimated and actual premiums after the audit and final premium determined by Plaintiff. In this regard, the 2019 Policies, in part, provides: PART FIVE - PREMIUM [{] B. Classifications [{] Item 4 of the information page shows the rate and premium basis for certain business or work classifications. These classifications were assigned based on an estimate of the exposures you would have during the policy period. If your actual exposures are not properly described by those classifications, we will assign proper classifications, rates and premium basis by endorsement to this policy. [{] C. Remuneration [{] Premium for each work classification is determined by multiplying a rate times a premium basis period. Remuneration is the most common premium basis. This premium basis includes payroll and all other remuneration paid or payable during the policy period 5 COMPLAINTa nw for the services of: [{] 1. All your officer and employees engaged in work covered by this policy; and [J] 2. All other persons engaged in work that would make us liable under Part One (Workers Compensation Insurance) of this policy period. If you do not have payroll records for these persons, the contract price for their services and materials may be used as the premium basis. This paragraph 2 will not apply if you give us proof that the employers of these persons lawfully secured their workers compensation obligation. [{] E. Final Premium. The premium shown on the Information Page, schedules and endorsements is an estimate. The final premium will be determined after this policy ends by using the actual, and not the estimated, premium basis and the proper classifications and rates that lawfully apply to the business and work covered by this policy. If the final premium is more than the premium you paid us, you must pay us the balance. [f it is less, we will refund the balance to you. The final premium will not be less than the highest minimum premium for the classifications covered by this policy. ... [J] F. Records. You will keep records of information needed to compute premium. You will provide us with copies of those records when we ask for them. [4] G. Audit. You will let us examine and audit all your records that relate to this policy. These records include ledgers, journals, registers, vouchers, contracts, tax reports, payroll and disbursement records, and programs for storing and retrieving data. We may conduct the audits during regular business hours during the policy period and within three years after the policy period ends. Information developed by audit will be used to determine final premium. Insurance rate service organizations have the same rights we have under this provision. COMPLAINT9. An audit was subsequently performed on the effective policy period for the 2019 Policies. The audit found the premium basis estimate provided by the Defendants to be inaccurate and found the actual audited total premium and fees for the effective policy period for the 2019 Policies to be an additional $25,688.00, which became fixed or readily ascertainable on September 30, 2019, as evidenced by a premium audit invoice, a true and correct copy of which is attached hereto as Exhibit “A”. 10. Plaintiff has performed all conditions, covenants and promises required of it on its part in accordance with the terms and conditions of the 2019 Policies, except those which are excused by Defendants’ breach. 11. After September 30, 2019, Defendants refused to make any further payments toward the 2019 Policies premium as audited for the 2019 Policies. Thus, within the past four years, Defendants have breached the terms of the 2019 Policies by failing and refusing to satisfy the amount outstanding on the 2019 Policies of $25,688.00. 12. Asadirect and proximate result of Defendants’ breach of the 2019 Policies, Plaintiff has been damaged in the amount of $25,688.00, together with prejudgment interest of $7.03 per day from September 30, 2019 using the legal rate of 10% per annum. WHEREFORE, Plaintiff prays for judgment against Defendants, and each of them, as follows: ie For the principal sum of $25,688.00, together with prejudgment interest of $7.03 per day from September 30, 2019 using the legal rate of 10% per annum; Mf Mt Ml / COMPLAINT0 ee ND WH RB WH NY o 11 2. 3. DATED: September 2, 2020 For costs of suit, including attorney’s fees, if available; and For such other and further relief as the Court deems just and proper. By: = Timothy Carl ia 7 ~ Attorney for-Plainti RLI INSURANCE COMPANY 8 COMPLAINTRLI 7 PREMIUM STATEMENT | Account No: P160006538 Statement Date: 09/30/2019 | Due Date: PAST DUE | PAY YOUR BILL ONLINE easypay.rlicorp.com Mail To: BILLING QUESTIONS 309:692-1000, EXT 25142 SCHRICKER ENGINEERING GROUP. . premium.accounting@rlicorp.com DBA.SEG INC 1793, LAFAYETTE STREET,STE 105 SANTA CLARA, CA 95050 Induding Fees Peggninin & Reet: _.Aalostmenes Paynicnt Fu | Minimum Due $30,486.00 I ($4,798.00). $0.00 $25,688.00 $25,688.00 Trans Date | Policy Number Description Transaction Amount Minimum Due 09/27/19 PSW0001436 Workers Compensation-Endorsement - Premium (84,669.00) $0.08. 09/22/2019-05/05/2020 09/27/19. PSW0001436 Workets Compensation-Endorscment - Work. ($129.00) $0.00 Coimp Fee'09/12/2019-05/09/2020 Final Due $0.00 $25,688:00. Minimiim Amount Due $25,688.00 a ‘Detach Here Please return this portion with your remittance iri the enclosed envelope. Account No: P100006538 Statement Date: 09/30/2019 Due Date: PAST DUE Payment in Fall: $25,688.00 525 698.00 Amount Eniclosed: S$ Account Name and Address; Make Check Payable and Remit Fo: SCHRICKER ENGINEERING GROUP. RLI Insurance Co Dept 3320 DBA SEG INC PO-Box 844122 1793 LAFAYETTE STREET,STE 105. Kansas City, MO 64184-4122 SANTA-CLARA, CA 95050 EXHIBIT & Earned Premiuny Invoice - Accourit