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Garcia v. Seacon Logix, Inc.

California Court of Appeals, Second District, Fourth Division

July 16, 2015

ROMERO GARCIA et al., Plaintiffs and Respondents,
SEACON LOGIX, INC., Defendant and Appellant.

APPEAL from a judgment of the Superior Court of Los Angeles County, No. NS024850 Michael P. Vicencia, Judge.

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[Copyrighted Material Omitted]

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Prima Law Group, Naveen Madala, Kevin H. Sun and Noah McCall for Defendant and Appellant.

State of California, Department of Industrial Relations, Division of Labor Standards Enforcement, David L. Gurley and Edna Garcia Earley for Plaintiffs and Respondents.



Plaintiffs and respondents Romeo Garcia, Eddy Gonzalez, Wilmer Urbina, and Desiderio Aguilar (collectively “respondents”) were truck drivers for defendant and appellant Seacon Logix, Inc. (“Seacon”). Respondents sued Seacon under Labor Code section 2802[1] for the reimbursement of paycheck deductions, contending that they should have been classified as employees, not independent contractors. Following a bench trial, the trial court agreed and awarded damages for specified paycheck deductions. In

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this appeal from the judgment, Seacon contends that the trial court’s finding that respondents are its employees is not supported by substantial evidence, and that the damages are excessive. We conclude that substantial evidence supports the finding that respondents are employees, and that Seacon has forfeited its challenge to the damages awarded. Accordingly, we affirm.



Seacon’s business involves arranging the transportation of cargo from the Port of Long Beach and the Port of Los Angeles to warehouses or other facilities. Respondents were truck drivers who transported the cargo for Seacon.

Around 2008, the ports began to implement a clean air program, prohibiting older trucks from accessing the ports. Prior to the clean air program, truck drivers generally owned their own trucks and worked as independent contractors. After the implementation of the clean air program, older, higher-emission trucks no longer were allowed access to the ports; thus, companies such as Seacon purchased trucks that were compliant with the clean air rules. Although the drivers no longer owned the trucks they drove, Seacon continued to treat the drivers as independent contractors, requiring them to enter into lease agreements for the use of the trucks and deducting lease and insurance payments from their paychecks. Respondents filed claims with the State Labor Commissioner’s Office, seeking to recover those deductions on the basis that they were employees, not independent contractors. (§ 98.) After the State Labor Commissioner ruled in favor of respondents, Seacon appealed the awards to the superior court. Following a bench trial, the superior court found that respondents were employees, not independent contractors. The court thus entered judgment in favor of respondents in the amounts requested: $29, 013.40 to Garcia, $19, 884.40 to Aguilar, $20, 686.35 to Gonzalez, and $38, 218.91 to Urbina.

Employment Applications and Other Documents

All four respondents testified at trial. In order to begin transporting goods for Seacon, drivers were required to complete various documents, including the following: an employment application; sub-haul agreement with independent contractor; transportation agreement; and an equipment lease and indemnification agreement. Respondents also were required to have a Class A license to drive the trucks.

Pursuant to the equipment lease and indemnification agreement, respondents paid $450 per week for the use of the truck and $200 per week for

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insurance for 260 weeks. At the end of the 260 weeks, title would be transferred to the lessee for $1. The lease agreement purported to define the parties’ relationship, stating that the lessee “shall perform the services and other obligations under this Agreement as an independent contractor and not as an employee of LESSOR.” Each lease agreement, except Urbina’s, specified which truck was being leased to the driver.

The sub-haul agreement, signed by Gonzalez and Garcia, defined the driver as an independent contractor. The agreement stated that the sub-hauler “shall determine” issues such as when a load is to be picked up, the selection of routes, the delivery time, his working hours, his insurance coverage, and the method of financing his vehicle.

The transportation agreement, signed by Urbina and Aguilar, defined the driver as a subcontractor. It also provided that the subcontractor was free to use his equipment for any other business purpose.

Use of Trucks

Seacon was the registered owner of the trucks, and the keys were given to the drivers by Chris Hyon, Seacon’s daily operations manager. The drivers were told that the trucks were always to be kept in Seacon’s yard and were not to be taken home or used for personal use. Seacon provided respondents with permanent Seacon logo stickers to affix to the truck. The registrations for the trucks were in Seacon’s name, and the insurance was provided by Seacon.

In 2007, prior to working for Seacon, Urbina had owned his own truck and worked for a company called New Trend Logistics. He stated that when he owned his truck, he was not an employee, and New Trend Logistics paid him by the load, rather than on a weekly basis. The dispatcher at New Trend Logistics encouraged Urbina to drive as many loads as he could and, at the end of each day, Urbina reported how many loads he had completed. Urbina understood that it was his own truck, so he was able to take it home and choose his working hours.

Working Conditions

Respondents were told by Hyon and Paul Lee (Seacon’s dispatcher) to arrive at work by 7:00 a.m. Respondents arrived by 7:00 a.m. five days a week. They were required to call to let Seacon know if they were going to be absent. If the drivers declined a delivery for any reason, they would not receive work the following day.

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Lee assigned deliveries to the drivers and occasionally provided them with maps showing the route to take. Respondents were required to call Lee when they arrived at their destination and completed their delivery. Because they were required to check in with Lee for every delivery, they spoke with him numerous times each day. They also were required to tell Lee if they were going to be late with a delivery due to traffic or any other reason.

Respondents did not have separate business licenses or any other source of income while driving for Seacon. Seacon did not permit respondents to hire other drivers to use their trucks or to use the trucks to work for other companies. Hyon and Lee told respondents the trucks belonged to Seacon and could not be used for any other company’s work. Respondents were not involved with ...

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