United States District Court, C.D. California
FINDINGS OF FACT AND CONCLUSIONS OF LAW
MICHAEL W. FITZGERALD United States District Judge
matter came on for trial before the Court sitting without a
jury on January 10, 2017. Following the presentation of
evidence and the parties' closing arguments, the matter
was taken under submission.
carefully reviewed the record and the arguments of counsel,
as presented at the trial and in their written submissions,
the Court now makes the following findings of fact and
reaches the following conclusions of law under Rule 52 of the
Federal Rules of Civil Procedure. Any finding of fact that
constitutes a conclusion of law is also hereby adopted as a
conclusion of law, and any conclusion of law that constitutes
a finding of fact is also hereby adopted as a finding of
following witnesses were called and examined by the parties
in the order recited below:
testimony was given on January 10, 2017. Joseph S. Fischbach
and Andrew Zelus appeared on behalf of Plaintiff Tyan, Inc.,
d/b/a Security Specialists (“Tyan”) and gave an
opening statement. Defendant Yovan Garcia appeared in pro
se and gave an opening statement.
Fischbach first examined Nick Tsotsikyan, founder, owner, and
Director of Operations of Security Specialists. Mr.
Tsotsikyan's sworn declaration was submitted in lieu of a
full direct examination. Mr. Garcia cross-examined Mr.
Fischbach next examined Steve Leon, Operations Manager of
Security Specialists. Mr. Leon's sworn declaration was
submitted in lieu of a full direct examination. Mr. Garcia
cross-examined Mr. Leon.
Fischbach recalled Mr. Tsotsikyan for redirect examination.
Mr. Garcia recross-examined Mr. Tsotsikyan.
Zelus next examined Defendant Yovan Garcia regarding Defense
Zelus then examined Junior Arana, a Patrol Officer for
Security Specialists. Mr. Arana's sworn declaration was
submitted in lieu of a full direct examination. Mr. Garcia
cross-examined Mr. Arana.
Zelus examined Ken Hagopian, a principal in Digital Synergy
Consulting, Inc., the company that provides IT support for
Security Specialists. Mr. Hagopian's sworn declaration
was submitted in lieu of a full direct examination. Mr.
Garcia cross-examined Mr. Hagopian. Mr. Zelus conducted a
redirect examination; Mr. Garcia conducted a recross
examination. Mr. Zelus conducted a second redirect
examination; Mr. Garcia conducted a short, second recross
Zelus next examined Defendant James Caspari, a former Patrol
Officer for Security Specialists. Mr. Caspari's sworn
declaration was submitted in lieu of a full direct
examination. Mr. Garcia cross-examined Mr. Caspari. Mr. Zelus
conducted a short redirect examination of Mr. Caspari; and
Mr. Garcia conducted a recross examination. Mr. Zelus
conducted a second redirect examination of Mr. Caspari; Mr.
Garcia conducted a second recross examination.
Zelus examined Denis Rybalka, a Field Training Officer for
Security Specialists. Mr. Rybalka's sworn declaration was
submitted in lieu of a full direct examination. Mr. Garcia
cross-examined Mr. Rybalka.
Garcia then took the stand and testified in his own defense.
Mr. Zelus cross-examined Mr. Garcia.
Mr. Fischbach examined Mr. Tsotsikyan a third time, as a
rebuttal witness. Mr. Garcia cross-examined Mr. Tsotsikyan.
end of the day, Mr. Fischbach made his closing argument for
Plaintiff. Mr. Garcia made his own closing argument.
FINDINGS OF FACT
Tsotsikyan founded Security Specialists, a private security
patrol company, in 1999. Since then, Security Specialists has
provided security services throughout Southern California.
some point, Tsotsikyan realized that the typical reporting
process used by most security companies could be updated and
streamlined with modern technology. Tsotsikyan purchased
FileMaker Pro, a software that enables users to develop
custom, proprietary databases. Tsotsikyan taught himself to
use FileMaker Pro and began to develop a set of custom
databases for use by Security Specialists.
Eventually, Tsotsikyan developed a unique set of forms and
databases that, in his opinion, set Security Specialists
apart from the competition. Each patrol car is equipped with
a laptop computer, from which Patrol Officers can access
Security Specialists' central database over the internet.
Patrol Officers can then generate their daily reports as they
patrol. The reports are emailed or faxed directly to clients
as a .pdf. In an industry where carbon copy reports are still
common, Tsotsikyan believes that his custom forms helped
Security Specialists to distinguish itself from its
Tsotsikyan also used FileMaker Pro to develop databases to
store confidential client information and employee records.
All of Security Specialists' databases were protected by
username and password. Only administrators - i.e.,
Steve Leon and Tsotsikyan - were authorized to edit the
reporting software and access the confidential client and
Tsotsikyan averred that he spent 5, 000 hours over the course
of 15 years developing the forms and databases that Security
Specialists uses. In 2009-2010, Tsotsikyan hired Dina Torok,
a certified FileMaker developer, to help him continue
developing the custom files. Torok charged $170 per hour, and
Tsotsikyan believes that this is a fair hourly rate.
Inconsistencies in Garcia's Payroll
Yovan Garcia began working for Security Specialists as a
Patrol Officer sometime in or around 2012.
July 24, 2014, Steve Leon noticed something odd about
Garcia's payroll records. Although Garcia's schedule
reflected that he had worked typical eight-hour days during
the previous two-week pay period, the payroll program
indicated that Garcia had worked twelve hours per day, and
thus was owed 40 hours of overtime pay.
first, Leon thought that perhaps the payroll program was not
adding properly. Then, he noticed that someone had tampered
with the program's “Lunch” field. Four hours
had been added into the lunch field each day, which accounted
for the unexplained extra 40 hours of overtime in
Garcia's records. The hours had been entered in black
text on a black background, in one-point font. As a result,
the alterations to Garcia's hours would not have been
noticeable to the casual observer. The alterations resulted
in Garcia's being paid wages for overtime that,
presumably, he did not work.
curiosity piqued, Leon pulled the paystub server log, which
tracks all attempts to log into the payroll database. The
paystub server log was admitted into evidence as Exhibit 3.
The log indicated that just the night before, on July 23,
2014 at about 9:00 p.m., someone logged into the payroll
program from Garcia's patrol laptop. The individual used
an administrative username and password. As a Patrol Officer,
Garcia was not authorized to access the payroll database and
was never given the username or password.
Leon eventually figured out that Garcia's hours had been
artificially inflated since at least January 2014.
Garcia's paystubs for each of those pay periods, along
with his corresponding schedule for that pay period, was
admitted into evidence as Exhibit 2.
an example of how Garcia's hours were altered, in the
first pay period of the year, Garcia's paystub shows that
he worked 80 hours of regular scheduled time, 20.5 hours of
overtime, and 8 hours of holiday time. Garcia's schedule
for that same period shows that he only actually worked 80
hours of regular scheduled time (including one 8hour day of
holiday time) and three hours of overtime. The discrepancy
meant that Garcia was overpaid by $371.67 that month.
Garcia's hours were similarly inflated for each
subsequent pay period. No other employee's records
reflected a similar discrepancy. Leon testified that, as a
Patrol Officer, Garcia was not authorized to access or alter
the scheduler program, and was never given the supervisor
password that would have allowed him to do so.
Leon testified competently and knowledgeably about this
incident. The Court credits his testimony.
Leon discussed the issue with Tsotsikyan. He then tried to
call Garcia to ask him about the discrepancy. Leon left a
message asking Garcia to come into the office for a meeting,
but Garcia never arrived. Instead, Garcia called someone he
considered to be a friend at Security Specialists, long-time
employee Denis Rybalka, and asked to meet.
Rybalka had the day off, and had spent the day washing his
car. He tried to avoid Garcia's calls. Rybalka had just
finished hand waxing his car when he received yet another
call from Garcia, and finally decided to answer.
Garcia was in a panic. He was speaking “gibberish,
” and was talking too fast for Rybalka to follow.
Rybalka thought he heard Garcia say, “they found
out;” Garcia was worried that he had been fired. Garcia
asked to meet because he didn't feel like he could talk
about what had happened over the phone.
Rybalka hung up and immediately called Leon. Leon asked
Rybalka to meet with Garcia - and to record the conversation
for Security Specialists' benefit. Rybalka had worked at
Security Specialists for more than a decade, and he was
intensely loyal to the company and to Leon in particular.
Rybalka set his cell phone to record and drove his freshly
waxed car to a nearby McDonald's to meet with Garcia.
audio recording that Rybalka made was admitted, along with a
transcript, as Exhibit 4. Rybalka spoke slowly and clearly
while testifying. He did not hesitate to answer questions and
appeared confident in his answers. Based on his manner when
testifying and other factors, the Court credits Rybalka's
During the meeting, Garcia told Rybalka that Garcia suspected
Leon wanted to meet with him because he had been receiving
inflated paychecks for the past few months. Garcia told
Rybalka the following story:
Garcia began by explaining that he has some skill with
computers. A few months prior, someone from Security
Specialists' competitor, PTS Security Services
(“PTS”), had asked him to come take a look at a
broken laptop. While working on the computer, Garcia noticed
a file labelled “Security Specialists.” Curious,
he opened the file, only to find what he recognized to be
confidential client records. Garcia saved the file to his own
device, deleted it from the laptop, and said nothing to his
contact at PTS.
little while later, Richard Balint, a former employee of
Security Specialists and current employee of PTS, contacted
Garcia. Balint told Garcia that he knew Garcia had seen the
“Security Specialists” file on the laptop. He
asked Garcia not to say anything to his employer about the
file - and promised that Garcia would be well compensated for
staying quiet. Garcia said nothing, and soon after started
receiving the inflated paychecks.
Rybalka tried to convince Garcia to tell his story to Leon.
Rybalka emphasized to Garcia that accepting the extra money
had been wrong; but said that he believed Garcia that it was
PTS who inflated the paychecks. Rybalka thought that if
Garcia would only explain what happened to Leon, Garcia would
be able to keep his job.
Garcia was reluctant. He was afraid, he said. He had a family
and was worried for their safety. Besides, Garcia did not
like Leon and thought that he and Tsotsikyan would probably
just try to blame the whole thing on Garcia. Instead, Garcia
wanted Rybalka to tell Leon and Tsotsikyan what had happened.
Garcia thought that the two higher-ups would be more
receptive to his story if they heard it from Rybalka first.
Eventually, Rybalka convinced Garcia to meet with Leon and
Tsotsikyan. Rybalka arranged the meeting.
Leon, Tsotsikyan, Rybalka, and Garcia all met later that
evening at a North Hollywood gas station. This time, it was
Leon who recorded the conversation. The audio recording and a
transcript were admitted as Exhibit 6.
the gas station, Leon aggressively confronted Garcia about
the inflated paychecks. Garcia told the assembled men his
story about fixing the laptop for PTS and the offered reward
in exchange for his silence about the Security Specialists
file. Garcia explained that he thought there was a
“mole” inside the company who was altering his
hours. Over and over, Garcia repeated that he had only acted
to protect the company and his friends who worked there.
Leon immediately started pressing Garcia for names. He and
Tsotsikyan thought that even if Garcia did not have the
administrative password, he must know who did. At first
Garcia was reluctant to name any names, citing a vague fear
for his family's safety. Eventually, after being assured
that the company would not press charges against him for the
inflated paychecks - or even ask for the money back - Garcia
talked. By the end of the meeting Garcia named several
Security Specialists employees who he claimed were agents of
PTS. All of them were subsequently fired.
Leon also confronted Garcia about the entries in the paystub
server log indicating that Garcia logged into the management
system from his patrol laptop the night before Leon
discovered the inflated wages. Garcia denied having used the
administrator password to log in.
Garcia also emailed the client information that he said he
found in the Security Specialists file to Leon. The email
contained a spreadsheet with entries for several clients, and
included their phone numbers, addresses, as well as other
confidential information. The attachment was admitted as
Exhibit 7 at trial. Leon testified that Garcia was never
authorized to access this sort of client information, nor did
Security Specialists ever give Garcia a username or password
that would have allowed him to access this information.