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1 RONALD D. ARENA, Bar No. 218421 11/18/2020
MICHAEL B. MOORE Bar No. 319001
2 ARENA HOFFMAN LLP
220 Montgomery Street, Suite 905
3 San Francisco, CA 94104
Telephone: 415.433.1414
4 Facsimile: 415.520.0446
Email: rarena@arenahoffman.com
5 mmoore@arenahoffman.com
6
Attorneys for Defendants
7 RR Franchising, Inc., Buddha Capital Corporation,
and Wine Country Ventures, Inc.
8
9 SUPERIOR COURT OF THE STATE OF CALIFORNIA
10 COUNTY OF SAN MATEO
11
ALIDA MAZARIEGOS, PAULA Case No. 20-CIV-04267
12 GONZALEZ, and JAIME AMAYA,
COMPLEX ACTION
13 Plaintiffs, on behalf of themselves
and all others similarly situated Assigned For All Purposes To Dept. 2
14
v. Hon. Marie S. Weiner
15
VANGUARD CLEANING SYSTEMS DEFENDANT WINE COUNTRY
16 INC.; RR FRANCHISING, INC., D/B/A VENTURES, INC.’S ANSWER TO CLASS
VANGUARD CLEANING SYSTEMS OF ACTION COMPLAINT
17 SOUTHERN CALIFORNIA AND D/B/A
VANGUARD CLEANING SYSTEMS OF
18 NORTHERN CALIFORNIA; BUDDHA
CAPITAL CORPORATION, D/B/A
19 VANGUARD CLEANING SYSTEMS OF
SACRAMENTO, D/B/A VANGUARD Complaint Filed: October 1, 2020
20 CLEANING SYSTEMS OF THE Trial Date: Not set
CENTRAL VALLEY. AND D/B/A
21 VANGUARD CLEANING SYSTEMS OF
THE CENTRAL COAST; AND WINE
22 COUNTRY VENTURES, INC. D/B/A
VANGUARD CLEANING SYSTEMS OF
23 THE NORTH BAY, AND DOES 1
THROUGH 10, INCLUSIVE,
24
Defendants.
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ARENA H OFFMAN LLP
220 Montgomery Street
Suite 905 ANSWER
San Francisco, CA 94104
Case No. 20-CIV-04267
415.433.1414
1 TO THE COURT, ALL PARTIES, AND ALL ATTORNEYS OF RECORD:
2 Defendant WINE COUNTRY VENTURES, INC. (“Defendant”) answers the unverified
3 Complaint (“Complaint”) of Plaintiffs ALIDA MAZARIEGOS, PAULA GONZALEZ, and JAIME
4 AMAYA (“Plaintiffs”) as follows:
5 GENERAL DENIAL
6 1. Pursuant to Code of Civil Procedure section 431.30(d), Defendant answers the
7 Complaint by generally denying each and every allegation of Plaintiffs’ Complaint, by denying that
8 Plaintiffs have been damaged or sustained any damages as a result of the conduct alleged therein,
9 and by asserting the affirmative defenses set forth below.
10 AFFIRMATIVE DEFENSES
11 FIRST AFFIRMATIVE DEFENSE
12 2. Defendant alleges that the claims asserted in the Complaint fail to state a claim upon
13 which relief can be granted.
14 SECOND AFFIRMATIVE DEFENSE
15 3. Defendant alleges that the claims asserted in the Complaint are barred, in whole or in
16 part, by the applicable statute of limitations, including, but not limited to, California Code of Civil
17 Procedure sections 335.1, 338, 339, 340 and 343, the California Labor Code, and California
18 Business and Professions Code section 17208.
19 THIRD AFFIRMATIVE DEFENSE
20 4. Defendant alleges that all or portions of the claims asserted in the Complaint are
21 barred by the doctrines of consent and/or estoppel.
22 FOURTH AFFIRMATIVE DEFENSE
23 5. Defendant alleges that the claims asserted in the Complaint fail, in whole or in part,
24 for lack of standing.
25 FIFTH AFFIRMATIVE DEFENSE
26 6. Defendant alleges that all or portions of the claims asserted in the Complaint are
27 barred by the doctrine of unjust enrichment.
28 SIXTH AFFIRMATIVE DEFENSE
ARENA H OFFMAN LLP
220 Montgomery Street
Suite 905 ANSWER
San Francisco, CA 94104
1. Case No. 20-CIV-04267
415.433.1414
1 7. Defendant alleges that all or portions of the claims asserted in the Complaint are
2 barred by the doctrine of laches.
3 SEVENTH AFFIRMATIVE DEFENSE
4 8. Defendant alleges that all or portions of the claims asserted in the Complaint are
5 barred by the doctrine of unclean hands and/or the non-waivable conflict of interest created by each
6 Plaintiff’s ownership and management of the commercial cleaning business for which they directly
7 work/worked, which businesses are necessary parties/defendants to this action. Each Plaintiff
8 owns/owned (in whole or substantial part) and is/was responsible for managing the commercial
9 cleaning franchise for which they perform/performed the work on which their claims are based. In
10 each instance, as an owner and manager of the respective commercial cleaning franchise, each
11 Plaintiff (along with any other owners/managers of the franchise) had exclusive control over all
12 personnel the franchise used to perform cleaning services, including control over the selection,
13 hiring, and firing of all workers, as well as the exclusive right and obligation to determine worker
14 classifications, compensation rates, scheduling, timing of meal and rest periods, responsibility for
15 timely payment, issuance of wage statements, timekeeping, recordkeeping, and compliance with all
16 other legal, contractual, and actual obligations related to personnel working for Plaintiff’s cleaning
17 franchise. As with all other personnel, to the extent a Plaintiff personally performs/performed
18 cleaning and/or other work for the Plaintiff’s cleaning business, Plaintiff (along with any other
19 owners and managers) is/was responsible for determining the capacity in which Plaintiff performed
20 the work (e.g. as a non-exempt employee, an exempt employee under the executive or administrative
21 exemption (or a combination thereof), or as a subcontracted independent contractor). As the owners
22 and persons responsible for managing and operating their respective businesses, Plaintiffs are/were
23 individually responsible for ensuring compliance with all legal requirements and obligations with
24 respect to the work they personally performed for their businesses. As such, Plaintiffs are barred
25 from bringing claims against Defendant (and the other currently named defendants) by the doctrine
26 of unclean hands. Plaintiff cannot recover damages from Defendant for alleged statutory violations
27 Plaintiff him/herself committed (even if Defendant is found to be a joint employer, which it
28 disputes). Moreover, Plaintiffs are barred from asserting the claims alleged in their Complaint by
ARENA H OFFMAN LLP
220 Montgomery Street
Suite 905 ANSWER
San Francisco, CA 94104
2. Case No. 20-CIV-04267
415.433.1414
1 the direct, non-waivable conflict created by their concurrent status as plaintiffs and owners and
2 managing directors/managers of their respective cleaning businesses, which are necessary
3 defendants/parties to this litigation. Plaintiffs are further conflicted due to their potential personal
4 liability for the damages Plaintiffs seek due to their direct control over their respective businesses’
5 wage payments, worker classification decisions, and compliance with other employment laws for
6 which individual liability can arise. More simply, Plaintiffs cannot sue their own businesses nor
7 bring claims for legal violations they committed and for which they may be individually liable.
8 They likewise cannot bring claims against alleged joint-employers to recover from them damages
9 owed by dint of Plaintiffs’ violations.
10 EIGHTH AFFIRMATIVE DEFENSE
11 9. Defendant alleges that all or portions of the claims asserted in the Complaint, in
12 whole or in part, are barred by the doctrine of waiver and release.
13 NINTH AFFIRMATIVE DEFENSE
14 10. Defendant alleges that some or all of the causes of action or claims alleged in the
15 Complaint are barred by the doctrines of res judicata and/or collateral estoppel.
16 TENTH AFFIRMATIVE DEFENSE
17 11. Defendant alleges that some or all of the causes of action or claims alleged in the
18 Complaint are barred by the doctrine of accord, satisfaction, and/or release.
19 ELEVENTH AFFIRMATIVE DEFENSE
20 12. Defendant alleges that Plaintiffs lack a private right of action to bring claims in court
21 for penalties or any other remedy pursuant to the applicable provisions of the California Labor Code,
22 including without limitation section 226.7
23 TWELFTH AFFIRMATIVE DEFENSE
24 13. Defendant alleges that the Complaint fails, in whole or in part, to state a claim for
25 declaratory relief.
26 THIRTEENTH AFFIRMATIVE DEFENSE
27 14. Defendant alleges that the Complaint, in whole or in part, fails to state a claim for
28 equitable relief insofar as there are adequate remedies at law.
ARENA H OFFMAN LLP
220 Montgomery Street
Suite 905 ANSWER
San Francisco, CA 94104
3. Case No. 20-CIV-04267
415.433.1414
1 FOURTEENTH AFFIRMATIVE DEFENSE
2 15. Defendant alleges that the Complaint fails, in whole or in part, to state a claim for
3 penalties under California Labor Code section 203 because Defendant’s alleged failure to pay any
4 wages found to be due was not willful because there is a bona fide, good faith dispute as to
5 Defendant’s obligation to pay any wages which may be found to be due.
6 FIFTEENTH AFFIRMATIVE DEFENSE
7 16. Defendant alleges that prosecution of this action by Plaintiffs as representatives of the
8 general public under California Business and Professions Code section 17200, as applied to the facts
9 and circumstances of this case, would constitute a denial of Defendant’s substantive and procedural
10 due process rights under the Fourteenth Amendment of the United States Constitution and under the
11 California Constitution.
12 SIXTEENTH AFFIRMATIVE DEFENSE
13 17. Defendant alleges that certification of a class, as applied to the facts and
14 circumstances of this case, would constitute a denial of Defendant’s procedural and substantive
15 rights to trial by jury and/or to substantive and/or procedural due process, in violation of the
16 Fourteenth Amendment of the United States Constitution and/or the Due Process and/or Equal
17 Protection Clauses of the California Constitution
18 SEVENTEENTH AFFIRMATIVE DEFENSE
19 18. Defendant alleges that the adjudication of the claims of the putative class through
20 generalized class-wide proof violates Defendant’s rights to trial by jury under the United States
21 Constitution and the California Constitution.
22 EIGHTEENTH AFFIRMATIVE DEFENSE
23 19. Defendant alleges that Plaintiffs’ prosecution of their cause(s) of action under the
24 Private Attorneys’ General Act (“PAGA”), Cal. Labor Code § 2699, et seq., violates the California
25 Constitution and the separation of powers proscribed therein.
26 NINETEENTH AFFIRMATIVE DEFENSE
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ARENA H OFFMAN LLP
220 Montgomery Street
Suite 905 ANSWER
San Francisco, CA 94104
4. Case No. 20-CIV-04267
415.433.1414
1 20. Defendant alleges that the Complaint fails to state a claim upon which prejudgment
2 interest may be granted, as the damages claimed are not sufficiently certain to allow an award of
3 prejudgment interest.
4 TWENTIETH AFFIRMATIVE DEFENSE
5 21. Defendant alleges that, to the extent Plaintiffs seek statutory and/or other penalties,
6 such claim(s) must comport with the due process requirements of State Farm v. Campbell (2003)
7 538 U.S. 408.
8 TWENTY-FIRST AFFIRMATIVE DEFENSE
9 22. Defendant alleges that the Complaint fails, in whole or in part, to state a claim for
10 recovery of consequential damages based upon wages due and owing, restitution, disgorgement, or
11 any other basis.
12 TWENTY- SECOND AFFIRMATIVE DEFENSE
13 23. Defendant alleges that, if Plaintiffs are adjudged to be entitled to any recovery based
14 on the Complaint, Defendant is entitled to a set off for past overpayments to Plaintiffs for unearned
15 wages and misappropriation of company property.
16 TWENTY-THIRD AFFIRMATIVE DEFENSE
17 24. Defendant is informed and believes that Plaintiffs failed to exhaust all administrative
18 remedies prior to filing suit, including without limitation by failing to provide requisite notice
19 pursuant to the Labor and Workforce Development Agency (“LWDA”) and the California Labor
20 Commissioner. Plaintiffs’ claims are barred in whole or in part to the extent that it exceeds the
21 scope of the charges made by Plaintiffs on behalf of themselves and other allegedly aggrieved
22 employees before the LWDA. Plaintiffs’ notice to the LWDA consists of recitations of the law, but
23 contains insufficient facts to support the allegations of violations of the law, among other
24 deficiencies.
25 TWENTY-FOURTH AFFIRMATIVE DEFENSE
26 25. Defendant alleges that the Complaint fails to state a claim for attorneys’ fees under
27 California Labor Code sections 203, 218.5, 226(e), 1194, or 2802, or, California Civil Code section
28 52.1, California Civil Procedure Code section 1021.5, or any other basis.
ARENA H OFFMAN LLP
220 Montgomery Street
Suite 905 ANSWER
San Francisco, CA 94104
5. Case No. 20-CIV-04267
415.433.1414
1 TWENTY-FIFTH AFFIRMATIVE DEFENSE
2 26. Defendant alleges that Plaintiffs failed to mitigate their alleged damages.
3 TWENTY-SIXTH AFFIRMATIVE DEFENSE
4 27. Defendant alleges that any incidents and alleged damages were caused by the
5 negligence and/or fault of other persons or entities, entitling Defendant to an offset.
6 TWENTY-SEVENTH AFFIRMATIVE DEFENSE
7 28. Defendant alleges that Plaintiffs’ recovery under the Private Attorneys General Act
8 (“PAGA”) is limited to civil penalties for the alleged Labor Code violations and may not be utilized
9 where other remedies are sought.
10 TWENTY-EIGHTH AFFIRMATIVE DEFENSE
11 29. Defendant alleges that any award of penalties that Plaintiffs seek under PAGA is
12 discretionary, and an award of the maximum penalties authorized by statute in favor Plaintiffs and
13 against Defendant would be unjust, arbitrary, oppressive and confiscatory under California Labor
14 Code section 2699(e)(2).
15 TWENTY-NINTH AFFIRMATIVE DEFENSE
16 30. Defendant alleges that Plaintiffs’ claims are barred on the grounds of preemption;
17 specifically, preemption of California’s “ABC” worker-classification test by the F.T.C. Franchise
18 Rule and the Lanham Act, as well as California state laws, including the California Franchise
19 Investment Law and the California Franchise Relations Act (Cal. Bus. & Prof. Code § 20020.
20 Federal and state law preempts application of the “ABC test” to the relationship between Defendant
21 and each Plaintiff (and putative class member) and, therefore, prohibits use of the ABC test to
22 determine the nature of these relationships. To the extent Plaintiffs’ claims are based on an alleged
23 employment relationship between Plaintiffs and Defendant arising from application of California’s
24 “ABC test”, Plaintiffs’ claims fail as a matter of law.
25 THIRTIETH AFFIRMATIVE DEFENSE
26 31. Defendant alleges that Plaintiffs’ claims are barred on the grounds that Plaintiffs’
27 interpretation of California’s “ABC” worker-classification test is violative of, and barred by, the
28 California Franchise Investment Law and the California Franchise Relations Act. Defendant has
ARENA H OFFMAN LLP
220 Montgomery Street
Suite 905 ANSWER
San Francisco, CA 94104
6. Case No. 20-CIV-04267
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1 acted in compliance with California and federal franchise laws in its operations, and given this
2 compliance and the (indirect) nature of the parties’ relationships, the ABC test does not and may not
3 be applied to determine the nature of Defendant’s relationship with Plaintiffs or the putative class
4 members.
5 THIRTY-FIRST AFFIRMATIVE DEFENSE
6 32. Defendant alleges that, for all relevant and applicable periods of time, Defendant has
7 not been subject to the requirements embodied by, but not limited to, the California Labor Code, the
8 California Code of Regulations, California Industrial Welfare Commission Wage Orders, and any
9 other laws predicated on an actual or potential employer-employee relationship with respect to
10 Plaintiffs on the grounds that Defendant never employed Plaintiffs (directly, jointly or otherwise).
11 THIRTY-SECOND AFFIRMATIVE DEFENSE
12 33. Defendant alleges that Plaintiffs’ claims are barred by the terms of their respective
13 franchise agreements.
14 THIRTY-THIRD AFFIRMATIVE DEFENSE
15 34. Defendant alleges that Plaintiffs cannot satisfy the criteria for class certification, as
16 this lawsuit and any individual claims may not properly be maintained as a representative or class
17 action because: (a) Plaintiffs cannot establish the necessary procedural elements for
18 representative/class treatment; (b) considerations of necessity, convenience and justice do not augur
19 in favor of representative/class treatment; (c) individual issues are predominant; and (d) proceeding
20 on a representative/class basis would be unmanageable.
21 THIRTY-FOURTH AFFIRMATIVE DEFENSE
22 35. Defendant alleges that the claims asserted in the Complaint are, in whole or in part,
23 governed and preempted by federal and state law, including without limitation the Federal
24 Arbitration Act, 9 U.S.C. § 1, et seq.
25 THIRTY-FIFTH AFFIRMATIVE DEFENSE
26 36. Defendant alleges that the Court lacks jurisdiction over the putative class action, in
27 whole or in part, because Plaintiffs’ and the putative class members’ claims are subject to mandatory
28 and binding arbitration on an individual basis, pursuant to arbitration agreements they entered into.
ARENA H OFFMAN LLP
220 Montgomery Street
Suite 905 ANSWER
San Francisco, CA 94104
7. Case No. 20-CIV-04267
415.433.1414
1 THIRTY-SIXTH AFFIRMATIVE DEFENSE
2 37. Defendant alleges that Plaintiffs have failed to join or otherwise include all of the
3 potentially responsible parties necessary for a full and just adjudication of the purported claims
4 asserted in the Complaint.
5 THIRTY-SEVENTH AFFIRMATIVE DEFENSE
6 38. Defendant alleges that the Complaint, and each cause of action set forth therein, or
7 some of them, are barred to the extent Plaintiffs and/or members of the putative class Plaintiffs
8 purport to represent have released claims he/she/they/it may otherwise have been able to assert
9 against Defendant.
10 THIRTY-EIGHTH AFFIRMATIVE DEFENSE
11 39. Defendant alleges that Plaintiffs’ claims for penalties are barred, in whole or in part,
12 on the grounds that, at all times alleged herein, Defendant acted in good faith, with a reasonable
13 basis for so acting, and never willfully violated any laws.
14 THIRTY-NINTH AFFIRMATIVE DEFENSE
15 40. Defendant alleges that, even assuming, arguendo, Defendant failed to comply with
16 any provision of the Labor Code, Defendant substantially complied with the Labor Code, thus
17 rendering an award of penalties inappropriate under the circumstances. For the same reason, should
18 the Court find a violation of the Labor Code occurred, and such violation gives rise to potential
19 penalties, the Court must exercise its discretion and significantly discount or eliminate any potential
20 penalties owed by Defendant due to Defendant’s good faith efforts to comply with the Labor Code
21 and/or substantial compliance with the Labor Code.
22 RESERVATION OF ADDITIONAL DEFENSES
23 41. Defendant lacks knowledge or information sufficient to form a belief as to whether it
24 has other, as yet unstated, defenses. Defendant reserves the right to assert, and hereby gives notice
25 that it intends to rely upon, any other defense that may become available or appear during discovery
26 or otherwise, and reserve the right to amend its Answer to assert any such defense.
27 WHEREFORE Defendant prays that:
28 1. The Complaint be dismissed in its entirety with prejudice;
ARENA H OFFMAN LLP
220 Montgomery Street
Suite 905 ANSWER
San Francisco, CA 94104
8. Case No. 20-CIV-04267
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1 2. Plaintiffs take nothing by this action;
2 3. Defendant be awarded its costs and attorneys’ fees;
3 4. Judgment be entered in favor of Defendant and against Plaintiffs on all of Plaintiffs’
4 causes of action; and
5 5. Defendant be awarded such other and further relief as the Court deems just and
6 proper.
7 Dated: November 18, 2020
8
RONALD D. ARENA
9 MICHAEL B. MOORE
ARENA HOFFMAN LLP
10 Attorneys for Defendants RR Franchising,
Inc., Buddha Capital Corporation, and Wine
11 Country Ventures, Inc.
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ARENA H OFFMAN LLP
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San Francisco, CA 94104
9. Case No. 20-CIV-04267
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Preview
1 RONALD D. ARENA, Bar No. 218421 11/18/2020 MICHAEL B. MOORE Bar No. 319001 2 ARENA HOFFMAN LLP 220 Montgomery Street, Suite 905 3 San Francisco, CA 94104 Telephone: 415.433.1414 4 Facsimile: 415.520.0446 Email: rarena@arenahoffman.com 5 mmoore@arenahoffman.com 6 Attorneys for Defendants 7 RR Franchising, Inc., Buddha Capital Corporation, and Wine Country Ventures, Inc. 8 9 SUPERIOR COURT OF THE STATE OF CALIFORNIA 10 COUNTY OF SAN MATEO 11 ALIDA MAZARIEGOS, PAULA Case No. 20-CIV-04267 12 GONZALEZ, and JAIME AMAYA, COMPLEX ACTION 13 Plaintiffs, on behalf of themselves and all others similarly situated Assigned For All Purposes To Dept. 2 14 v. Hon. Marie S. Weiner 15 VANGUARD CLEANING SYSTEMS DEFENDANT WINE COUNTRY 16 INC.; RR FRANCHISING, INC., D/B/A VENTURES, INC.’S ANSWER TO CLASS VANGUARD CLEANING SYSTEMS OF ACTION COMPLAINT 17 SOUTHERN CALIFORNIA AND D/B/A VANGUARD CLEANING SYSTEMS OF 18 NORTHERN CALIFORNIA; BUDDHA CAPITAL CORPORATION, D/B/A 19 VANGUARD CLEANING SYSTEMS OF SACRAMENTO, D/B/A VANGUARD Complaint Filed: October 1, 2020 20 CLEANING SYSTEMS OF THE Trial Date: Not set CENTRAL VALLEY. AND D/B/A 21 VANGUARD CLEANING SYSTEMS OF THE CENTRAL COAST; AND WINE 22 COUNTRY VENTURES, INC. D/B/A VANGUARD CLEANING SYSTEMS OF 23 THE NORTH BAY, AND DOES 1 THROUGH 10, INCLUSIVE, 24 Defendants. 25 26 27 28 ARENA H OFFMAN LLP 220 Montgomery Street Suite 905 ANSWER San Francisco, CA 94104 Case No. 20-CIV-04267 415.433.1414 1 TO THE COURT, ALL PARTIES, AND ALL ATTORNEYS OF RECORD: 2 Defendant WINE COUNTRY VENTURES, INC. (“Defendant”) answers the unverified 3 Complaint (“Complaint”) of Plaintiffs ALIDA MAZARIEGOS, PAULA GONZALEZ, and JAIME 4 AMAYA (“Plaintiffs”) as follows: 5 GENERAL DENIAL 6 1. Pursuant to Code of Civil Procedure section 431.30(d), Defendant answers the 7 Complaint by generally denying each and every allegation of Plaintiffs’ Complaint, by denying that 8 Plaintiffs have been damaged or sustained any damages as a result of the conduct alleged therein, 9 and by asserting the affirmative defenses set forth below. 10 AFFIRMATIVE DEFENSES 11 FIRST AFFIRMATIVE DEFENSE 12 2. Defendant alleges that the claims asserted in the Complaint fail to state a claim upon 13 which relief can be granted. 14 SECOND AFFIRMATIVE DEFENSE 15 3. Defendant alleges that the claims asserted in the Complaint are barred, in whole or in 16 part, by the applicable statute of limitations, including, but not limited to, California Code of Civil 17 Procedure sections 335.1, 338, 339, 340 and 343, the California Labor Code, and California 18 Business and Professions Code section 17208. 19 THIRD AFFIRMATIVE DEFENSE 20 4. Defendant alleges that all or portions of the claims asserted in the Complaint are 21 barred by the doctrines of consent and/or estoppel. 22 FOURTH AFFIRMATIVE DEFENSE 23 5. Defendant alleges that the claims asserted in the Complaint fail, in whole or in part, 24 for lack of standing. 25 FIFTH AFFIRMATIVE DEFENSE 26 6. Defendant alleges that all or portions of the claims asserted in the Complaint are 27 barred by the doctrine of unjust enrichment. 28 SIXTH AFFIRMATIVE DEFENSE ARENA H OFFMAN LLP 220 Montgomery Street Suite 905 ANSWER San Francisco, CA 94104 1. Case No. 20-CIV-04267 415.433.1414 1 7. Defendant alleges that all or portions of the claims asserted in the Complaint are 2 barred by the doctrine of laches. 3 SEVENTH AFFIRMATIVE DEFENSE 4 8. Defendant alleges that all or portions of the claims asserted in the Complaint are 5 barred by the doctrine of unclean hands and/or the non-waivable conflict of interest created by each 6 Plaintiff’s ownership and management of the commercial cleaning business for which they directly 7 work/worked, which businesses are necessary parties/defendants to this action. Each Plaintiff 8 owns/owned (in whole or substantial part) and is/was responsible for managing the commercial 9 cleaning franchise for which they perform/performed the work on which their claims are based. In 10 each instance, as an owner and manager of the respective commercial cleaning franchise, each 11 Plaintiff (along with any other owners/managers of the franchise) had exclusive control over all 12 personnel the franchise used to perform cleaning services, including control over the selection, 13 hiring, and firing of all workers, as well as the exclusive right and obligation to determine worker 14 classifications, compensation rates, scheduling, timing of meal and rest periods, responsibility for 15 timely payment, issuance of wage statements, timekeeping, recordkeeping, and compliance with all 16 other legal, contractual, and actual obligations related to personnel working for Plaintiff’s cleaning 17 franchise. As with all other personnel, to the extent a Plaintiff personally performs/performed 18 cleaning and/or other work for the Plaintiff’s cleaning business, Plaintiff (along with any other 19 owners and managers) is/was responsible for determining the capacity in which Plaintiff performed 20 the work (e.g. as a non-exempt employee, an exempt employee under the executive or administrative 21 exemption (or a combination thereof), or as a subcontracted independent contractor). As the owners 22 and persons responsible for managing and operating their respective businesses, Plaintiffs are/were 23 individually responsible for ensuring compliance with all legal requirements and obligations with 24 respect to the work they personally performed for their businesses. As such, Plaintiffs are barred 25 from bringing claims against Defendant (and the other currently named defendants) by the doctrine 26 of unclean hands. Plaintiff cannot recover damages from Defendant for alleged statutory violations 27 Plaintiff him/herself committed (even if Defendant is found to be a joint employer, which it 28 disputes). Moreover, Plaintiffs are barred from asserting the claims alleged in their Complaint by ARENA H OFFMAN LLP 220 Montgomery Street Suite 905 ANSWER San Francisco, CA 94104 2. Case No. 20-CIV-04267 415.433.1414 1 the direct, non-waivable conflict created by their concurrent status as plaintiffs and owners and 2 managing directors/managers of their respective cleaning businesses, which are necessary 3 defendants/parties to this litigation. Plaintiffs are further conflicted due to their potential personal 4 liability for the damages Plaintiffs seek due to their direct control over their respective businesses’ 5 wage payments, worker classification decisions, and compliance with other employment laws for 6 which individual liability can arise. More simply, Plaintiffs cannot sue their own businesses nor 7 bring claims for legal violations they committed and for which they may be individually liable. 8 They likewise cannot bring claims against alleged joint-employers to recover from them damages 9 owed by dint of Plaintiffs’ violations. 10 EIGHTH AFFIRMATIVE DEFENSE 11 9. Defendant alleges that all or portions of the claims asserted in the Complaint, in 12 whole or in part, are barred by the doctrine of waiver and release. 13 NINTH AFFIRMATIVE DEFENSE 14 10. Defendant alleges that some or all of the causes of action or claims alleged in the 15 Complaint are barred by the doctrines of res judicata and/or collateral estoppel. 16 TENTH AFFIRMATIVE DEFENSE 17 11. Defendant alleges that some or all of the causes of action or claims alleged in the 18 Complaint are barred by the doctrine of accord, satisfaction, and/or release. 19 ELEVENTH AFFIRMATIVE DEFENSE 20 12. Defendant alleges that Plaintiffs lack a private right of action to bring claims in court 21 for penalties or any other remedy pursuant to the applicable provisions of the California Labor Code, 22 including without limitation section 226.7 23 TWELFTH AFFIRMATIVE DEFENSE 24 13. Defendant alleges that the Complaint fails, in whole or in part, to state a claim for 25 declaratory relief. 26 THIRTEENTH AFFIRMATIVE DEFENSE 27 14. Defendant alleges that the Complaint, in whole or in part, fails to state a claim for 28 equitable relief insofar as there are adequate remedies at law. ARENA H OFFMAN LLP 220 Montgomery Street Suite 905 ANSWER San Francisco, CA 94104 3. Case No. 20-CIV-04267 415.433.1414 1 FOURTEENTH AFFIRMATIVE DEFENSE 2 15. Defendant alleges that the Complaint fails, in whole or in part, to state a claim for 3 penalties under California Labor Code section 203 because Defendant’s alleged failure to pay any 4 wages found to be due was not willful because there is a bona fide, good faith dispute as to 5 Defendant’s obligation to pay any wages which may be found to be due. 6 FIFTEENTH AFFIRMATIVE DEFENSE 7 16. Defendant alleges that prosecution of this action by Plaintiffs as representatives of the 8 general public under California Business and Professions Code section 17200, as applied to the facts 9 and circumstances of this case, would constitute a denial of Defendant’s substantive and procedural 10 due process rights under the Fourteenth Amendment of the United States Constitution and under the 11 California Constitution. 12 SIXTEENTH AFFIRMATIVE DEFENSE 13 17. Defendant alleges that certification of a class, as applied to the facts and 14 circumstances of this case, would constitute a denial of Defendant’s procedural and substantive 15 rights to trial by jury and/or to substantive and/or procedural due process, in violation of the 16 Fourteenth Amendment of the United States Constitution and/or the Due Process and/or Equal 17 Protection Clauses of the California Constitution 18 SEVENTEENTH AFFIRMATIVE DEFENSE 19 18. Defendant alleges that the adjudication of the claims of the putative class through 20 generalized class-wide proof violates Defendant’s rights to trial by jury under the United States 21 Constitution and the California Constitution. 22 EIGHTEENTH AFFIRMATIVE DEFENSE 23 19. Defendant alleges that Plaintiffs’ prosecution of their cause(s) of action under the 24 Private Attorneys’ General Act (“PAGA”), Cal. Labor Code § 2699, et seq., violates the California 25 Constitution and the separation of powers proscribed therein. 26 NINETEENTH AFFIRMATIVE DEFENSE 27 28 ARENA H OFFMAN LLP 220 Montgomery Street Suite 905 ANSWER San Francisco, CA 94104 4. Case No. 20-CIV-04267 415.433.1414 1 20. Defendant alleges that the Complaint fails to state a claim upon which prejudgment 2 interest may be granted, as the damages claimed are not sufficiently certain to allow an award of 3 prejudgment interest. 4 TWENTIETH AFFIRMATIVE DEFENSE 5 21. Defendant alleges that, to the extent Plaintiffs seek statutory and/or other penalties, 6 such claim(s) must comport with the due process requirements of State Farm v. Campbell (2003) 7 538 U.S. 408. 8 TWENTY-FIRST AFFIRMATIVE DEFENSE 9 22. Defendant alleges that the Complaint fails, in whole or in part, to state a claim for 10 recovery of consequential damages based upon wages due and owing, restitution, disgorgement, or 11 any other basis. 12 TWENTY- SECOND AFFIRMATIVE DEFENSE 13 23. Defendant alleges that, if Plaintiffs are adjudged to be entitled to any recovery based 14 on the Complaint, Defendant is entitled to a set off for past overpayments to Plaintiffs for unearned 15 wages and misappropriation of company property. 16 TWENTY-THIRD AFFIRMATIVE DEFENSE 17 24. Defendant is informed and believes that Plaintiffs failed to exhaust all administrative 18 remedies prior to filing suit, including without limitation by failing to provide requisite notice 19 pursuant to the Labor and Workforce Development Agency (“LWDA”) and the California Labor 20 Commissioner. Plaintiffs’ claims are barred in whole or in part to the extent that it exceeds the 21 scope of the charges made by Plaintiffs on behalf of themselves and other allegedly aggrieved 22 employees before the LWDA. Plaintiffs’ notice to the LWDA consists of recitations of the law, but 23 contains insufficient facts to support the allegations of violations of the law, among other 24 deficiencies. 25 TWENTY-FOURTH AFFIRMATIVE DEFENSE 26 25. Defendant alleges that the Complaint fails to state a claim for attorneys’ fees under 27 California Labor Code sections 203, 218.5, 226(e), 1194, or 2802, or, California Civil Code section 28 52.1, California Civil Procedure Code section 1021.5, or any other basis. ARENA H OFFMAN LLP 220 Montgomery Street Suite 905 ANSWER San Francisco, CA 94104 5. Case No. 20-CIV-04267 415.433.1414 1 TWENTY-FIFTH AFFIRMATIVE DEFENSE 2 26. Defendant alleges that Plaintiffs failed to mitigate their alleged damages. 3 TWENTY-SIXTH AFFIRMATIVE DEFENSE 4 27. Defendant alleges that any incidents and alleged damages were caused by the 5 negligence and/or fault of other persons or entities, entitling Defendant to an offset. 6 TWENTY-SEVENTH AFFIRMATIVE DEFENSE 7 28. Defendant alleges that Plaintiffs’ recovery under the Private Attorneys General Act 8 (“PAGA”) is limited to civil penalties for the alleged Labor Code violations and may not be utilized 9 where other remedies are sought. 10 TWENTY-EIGHTH AFFIRMATIVE DEFENSE 11 29. Defendant alleges that any award of penalties that Plaintiffs seek under PAGA is 12 discretionary, and an award of the maximum penalties authorized by statute in favor Plaintiffs and 13 against Defendant would be unjust, arbitrary, oppressive and confiscatory under California Labor 14 Code section 2699(e)(2). 15 TWENTY-NINTH AFFIRMATIVE DEFENSE 16 30. Defendant alleges that Plaintiffs’ claims are barred on the grounds of preemption; 17 specifically, preemption of California’s “ABC” worker-classification test by the F.T.C. Franchise 18 Rule and the Lanham Act, as well as California state laws, including the California Franchise 19 Investment Law and the California Franchise Relations Act (Cal. Bus. & Prof. Code § 20020. 20 Federal and state law preempts application of the “ABC test” to the relationship between Defendant 21 and each Plaintiff (and putative class member) and, therefore, prohibits use of the ABC test to 22 determine the nature of these relationships. To the extent Plaintiffs’ claims are based on an alleged 23 employment relationship between Plaintiffs and Defendant arising from application of California’s 24 “ABC test”, Plaintiffs’ claims fail as a matter of law. 25 THIRTIETH AFFIRMATIVE DEFENSE 26 31. Defendant alleges that Plaintiffs’ claims are barred on the grounds that Plaintiffs’ 27 interpretation of California’s “ABC” worker-classification test is violative of, and barred by, the 28 California Franchise Investment Law and the California Franchise Relations Act. Defendant has ARENA H OFFMAN LLP 220 Montgomery Street Suite 905 ANSWER San Francisco, CA 94104 6. Case No. 20-CIV-04267 415.433.1414 1 acted in compliance with California and federal franchise laws in its operations, and given this 2 compliance and the (indirect) nature of the parties’ relationships, the ABC test does not and may not 3 be applied to determine the nature of Defendant’s relationship with Plaintiffs or the putative class 4 members. 5 THIRTY-FIRST AFFIRMATIVE DEFENSE 6 32. Defendant alleges that, for all relevant and applicable periods of time, Defendant has 7 not been subject to the requirements embodied by, but not limited to, the California Labor Code, the 8 California Code of Regulations, California Industrial Welfare Commission Wage Orders, and any 9 other laws predicated on an actual or potential employer-employee relationship with respect to 10 Plaintiffs on the grounds that Defendant never employed Plaintiffs (directly, jointly or otherwise). 11 THIRTY-SECOND AFFIRMATIVE DEFENSE 12 33. Defendant alleges that Plaintiffs’ claims are barred by the terms of their respective 13 franchise agreements. 14 THIRTY-THIRD AFFIRMATIVE DEFENSE 15 34. Defendant alleges that Plaintiffs cannot satisfy the criteria for class certification, as 16 this lawsuit and any individual claims may not properly be maintained as a representative or class 17 action because: (a) Plaintiffs cannot establish the necessary procedural elements for 18 representative/class treatment; (b) considerations of necessity, convenience and justice do not augur 19 in favor of representative/class treatment; (c) individual issues are predominant; and (d) proceeding 20 on a representative/class basis would be unmanageable. 21 THIRTY-FOURTH AFFIRMATIVE DEFENSE 22 35. Defendant alleges that the claims asserted in the Complaint are, in whole or in part, 23 governed and preempted by federal and state law, including without limitation the Federal 24 Arbitration Act, 9 U.S.C. § 1, et seq. 25 THIRTY-FIFTH AFFIRMATIVE DEFENSE 26 36. Defendant alleges that the Court lacks jurisdiction over the putative class action, in 27 whole or in part, because Plaintiffs’ and the putative class members’ claims are subject to mandatory 28 and binding arbitration on an individual basis, pursuant to arbitration agreements they entered into. ARENA H OFFMAN LLP 220 Montgomery Street Suite 905 ANSWER San Francisco, CA 94104 7. Case No. 20-CIV-04267 415.433.1414 1 THIRTY-SIXTH AFFIRMATIVE DEFENSE 2 37. Defendant alleges that Plaintiffs have failed to join or otherwise include all of the 3 potentially responsible parties necessary for a full and just adjudication of the purported claims 4 asserted in the Complaint. 5 THIRTY-SEVENTH AFFIRMATIVE DEFENSE 6 38. Defendant alleges that the Complaint, and each cause of action set forth therein, or 7 some of them, are barred to the extent Plaintiffs and/or members of the putative class Plaintiffs 8 purport to represent have released claims he/she/they/it may otherwise have been able to assert 9 against Defendant. 10 THIRTY-EIGHTH AFFIRMATIVE DEFENSE 11 39. Defendant alleges that Plaintiffs’ claims for penalties are barred, in whole or in part, 12 on the grounds that, at all times alleged herein, Defendant acted in good faith, with a reasonable 13 basis for so acting, and never willfully violated any laws. 14 THIRTY-NINTH AFFIRMATIVE DEFENSE 15 40. Defendant alleges that, even assuming, arguendo, Defendant failed to comply with 16 any provision of the Labor Code, Defendant substantially complied with the Labor Code, thus 17 rendering an award of penalties inappropriate under the circumstances. For the same reason, should 18 the Court find a violation of the Labor Code occurred, and such violation gives rise to potential 19 penalties, the Court must exercise its discretion and significantly discount or eliminate any potential 20 penalties owed by Defendant due to Defendant’s good faith efforts to comply with the Labor Code 21 and/or substantial compliance with the Labor Code. 22 RESERVATION OF ADDITIONAL DEFENSES 23 41. Defendant lacks knowledge or information sufficient to form a belief as to whether it 24 has other, as yet unstated, defenses. Defendant reserves the right to assert, and hereby gives notice 25 that it intends to rely upon, any other defense that may become available or appear during discovery 26 or otherwise, and reserve the right to amend its Answer to assert any such defense. 27 WHEREFORE Defendant prays that: 28 1. The Complaint be dismissed in its entirety with prejudice; ARENA H OFFMAN LLP 220 Montgomery Street Suite 905 ANSWER San Francisco, CA 94104 8. Case No. 20-CIV-04267 415.433.1414 1 2. Plaintiffs take nothing by this action; 2 3. Defendant be awarded its costs and attorneys’ fees; 3 4. Judgment be entered in favor of Defendant and against Plaintiffs on all of Plaintiffs’ 4 causes of action; and 5 5. Defendant be awarded such other and further relief as the Court deems just and 6 proper. 7 Dated: November 18, 2020 8 RONALD D. ARENA 9 MICHAEL B. MOORE ARENA HOFFMAN LLP 10 Attorneys for Defendants RR Franchising, Inc., Buddha Capital Corporation, and Wine 11 Country Ventures, Inc. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ARENA H OFFMAN LLP 220 Montgomery Street Suite 905 ANSWER San Francisco, CA 94104 9. Case No. 20-CIV-04267 415.433.1414