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Hammitt v. Lumber Liquidators, Inc.

United States District Court, S.D. California

May 13, 2014

MICHAEL HAMMITT, an individual, Plaintiff,
v.
LUMBER LIQUIDATORS, INC., a Delaware corporation; and DOES 1 through 10, inclusive, Defendant

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For Michael Hammitt, Plaintiff: David Garcia, David A Garcia, LEAD ATTORNEYS, Tafoya & Garcia LLP, Los Angeles, CA.

For Lumber Liquidators, a Delaware corporation, Defendant: Eric Meckley, LEAD ATTORNEY, Jennifer P Svanfeldt, Katherine Hyang Wol Dick, Morgan Lewis & Bockius LLP, San Francisco, CA.

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ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION FOR SUMMARY JUDGMENT [Dkt. No. 58.]

HON. GONZALO P. CURIEL, United States District Judge.

Plaintiff Michael Hammitt (" Plaintiff" ) brings this action for damages against Defendant Lumber Liquidators, Inc. (" Defendant" or " Lumber Liquidators" ) for denial of overtime wages and meal breaks under California wage and hour laws, failure to reimburse necessary business expenses,

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and unfair business practices. (Dkt. No. 1.) Presently before the Court is Defendant's motion for summary judgment on all causes of action alleged in Plaintiff's Complaint. (Dkt. No. 58.) The parties have fully briefed the motion, (Dkt. Nos. 72, 87), and have filed requests for judicial notice in support of their respective briefs. (Dkt. Nos. 61, 92.) The Court finds the matter suitable for resolution without oral argument pursuant to Local Civil Rule 7.1(d)(1). Based on a review of the briefs, supporting evidence, judicially noticeable facts, and the applicable law, the Court GRANTS in part and DENIES in part Defendant Lumber Liquidators' Motion for Summary Judgment. (Dkt. No. 58.)

PROCEDURAL BACKGROUND

In September 2009, a putative class action complaint was filed against Lumber Liquidators in the United States District Court for the Northern District of California, titled Chavez et al. v. Lumber Liquidators, Inc., No. CV-0904812(SC). (Dkt. No. 58-5, Meckley Decl. ¶ 4.) The Chavez action sought relief on behalf of Lumber Liquidators Store Managers and non-exempt employees in California on six causes of action: (1) Failure to pay overtimes wages; (2) Failure to provide meal breaks; (3) Failure to pay accrued vested vacation; (4) Failure to reimburse employees for necessary business expenditures; (5) Failure to provide itemized wage statements; and (6) Unfair business practices. (Id.; Dkt. No. 85-5, Meckley Decl. Ex. 3, Chavez action Second Amended Complaint.) On March 26, 2012, Judge Samuel Conti denied class certification in the Chavez action as to all claims except for the non-exempt employees' claim for failure to include commissions in the overtime calculation. (Meckley Decl. ¶ 5; Dkt. No. 92-1, Request for Judicial Notice Ex. 1.)

On July 12, 2012, Plaintiff Michael Hammitt filed an individual Complaint for damages against Defendant Lumber Liquidators in the above-captioned matter, alleging the following five causes of action: (1) Failure to pay overtime wages in violation of California Labor Code section 1194; (2) Failure to provide meal breaks in violation of California Labor Code section 226.7; (3) Failure to reimburse Plaintiff for expenses and losses incurred in the course of his employment in violation of California Labor Code section 2802; (4) Failure to maintain accurate payroll records in violation of California Labor Code section 226; and (5) Unfair, unlawful, and misleading business practices in violation of the California Unfair Competition Law (" UCL" ), Cal. Bus. & Prof. Code § § 17200 et seq. (Dkt. No. 1.)

On January 17, 2014, Defendant Lumber Liquidators filed the present motion for summary judgment. (Dkt. No. 58.)

FACTUAL BACKGROUND

I. The Parties

A. Lumber Liquidators

Lumber Liquidators is a Delaware company selling " flooring products, including pre-finished and unfinished hardwood, laminate, and other flooring, as well as glue, moldings, and cleaning kits, in retail stores throughout California, including San Diego." (Dkt. No. 58-1 at 2.) Beginning on February 3, 2004, Lumber Liquidators contracted with retail management company Anderson Lane Associates (" ALA" ) to provide " labor and management services" related to the operation of Lumber Liquidators' retail store located at 7930 Miramar in San Diego, California (" Store 40" ). (Dkt. No. 58-3 ¶ 3, Ex. 1.) On January 11, 2007, Lumber Liquidators and ALA entered into a second Sales Agreement for the management of Store 40 (" 2007 Sales

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Agreement" ). (Id. ¶ 4, Ex. 2.) Under the terms of the 2007 Sales Agreement, ALA was responsible for providing " [a]ll labor, management, personnel and oversight required for the operation of the Stores including, among other things, sales, deliveries, inventory and warehouse activities." (Id. Ex. 2 at ¶ 1(a)(I).) The 2007 Sales Agreement between Lumber Liquidators and ALA terminated on June 1, 2007. (Id. ¶ 5.)

B. Plaintiff Michael Hammitt

In February 2006, Plaintiff Michael Hammitt responded to an ALA advertisement for the " Assistant Store Manager" position in Lumber Liquidators' Store 40. (Dkt. No. 58-6, Meckley Decl. Ex. 2, Hammitt Depo. at 44.) Richard Peck, Chief Executive Officer of ALA, hired Plaintiff for the Assistant Store Manager position. (Id. Ex. 3, Hammitt Depo. II at 24-25.) In August 2006, Store 40 Store Manager Doug Chambers " went to work for another client of Anderson Lane," and ALA promoted Plaintiff to the " Store Manager" position. (Id. at 32.)

On May 31, 2007,[1] Plaintiff submitted an employment application to Lumber Liquidators for the Store 40 Store Manager position and became a direct employee of Lumber Liquidators on June 1, 2007. (Dkt. No. 58-8, Davis Decl. ¶ 5.) Plaintiff testified he understood " ALA's contract had been bought out," and while " day-to-day operation" did not change, Plaintiff was transferred from ALA's payroll to Lumber Liquidators' payroll. (Dkt. No. 75, Garcia Decl. Ex. C, Hammitt Depo. at 92.)

II. Plaintiff's Employment at Lumber Liquidators

A. Plaintiff's Responsibilities

Plaintiff was employed by Lumber Liquidators in the Store Manager position at Store 40 until terminated on or about June 13, 2011. (Id.) It is undisputed that between June 1, 2007 and June 13, 2011, Lumber Liquidators classified Plaintiff as a salaried employee " exempt" from California wage and hour laws. During this time, it is undisputed that Plaintiff was the " highest ranking management employee" in Store 40, which is " a distinct and easily defined unit of [Defendant's] retail operations." (Dkt. No. 74 at 57.) Furthermore, the parties do not dispute that, at all times during his employment by Lumber Liquidators, Plaintiff " always supervised no fewer than two to four other employees" in the positions of Assistant Store Manager I, Assistant Store Manager II, or Warehouse Associate. (Id. at 59.)

B. Plaintiff's Compensation

Although Plaintiff's weekly workload changed over time, Plaintiff testified he regularly worked 70-80 hours per week at Store 40. (Dkt. No. 75-1, Garcia Decl. Ex. A, Hammitt Decl. ¶ 8.) While working as an Assistant Store Manager and Store Manager, Plaintiff received a fixed base monthly salary as well as an additional payment that varied from month to month. The parties dispute whether the variable payment is properly classified as a " commission" or a " bonus."

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DISCUSSION

I. Legal Standard

Federal Rule of Civil Procedure 56 empowers the Court to enter summary judgment on factually unsupported claims or defenses, and thereby " secure the just, speedy and inexpensive determination of every action." Celotex Corp. v. Catrett,477 U.S. 317, 325, 327, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Summary judgment is appropriate if the " pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A fact is ...


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