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Gillard v. Good Earth Power AZ LLC

United States District Court, D. Arizona

March 19, 2019

Martin Gillard, et al., Plaintiffs,
Good Earth Power AZ LLC, et al., Defendants.


          Douglas L. Rayes United States District Judge.

         Plaintiffs Martin Gillard and Darren Gurner allege that Defendants Good Earth Power AZ, LLC (“GEPAZ”), ZR FEC Ltd. (“ZR FEC”), Jason Rosamond, and Maya Minkova, violated the Fair Labor Standards Act (“FLSA”) and Arizona Wage Act (“AWA”) by failing to pay Plaintiffs minimum wage and overtime. Plaintiffs also raise contract claims related to their employment with Defendants. Before the Court are Defendants' motions for summary judgment (Docs. 67-69), which are fully briefed.[1] For the following reasons, Defendants' motions are granted in part and denied in part.


         Though their disagreements are plentiful, the parties agree on the following: In early 2013, Gillard entered into a contract to serve as Chief Technology Officer (“CTO”) for Good Earth Power Limited (“GEP Ltd”), a British Virgin Islands company headquartered in Oman, with projects predominately in Africa. While CTO of GEP Ltd, Gillard worked with Rosamond and Minkova, who served as directors and officers of the entity.

         In early 2014, Gillard began performing work for GEPAZ and ZR FEC in Arizona. Rosamond was Chief Executive Officer of GEP Ltd, GEPAZ, and ZR FEC. GEPAZ and ZR FEC were separate but related entities to GEP Ltd. GEPAZ was the primary contractor on the United States Forest Service's Four Forest Restoration Initiative (“4-FRI”) in Northern Arizona, and ZR FEC oversaw enterprises connected to GEPAZ's operations. Gillard occupied a number of roles within GEPAZ and ZR FEC, though the parties dispute whether this work was being conducted pursuant to Gillard's agreement with GEP Ltd, or under a new, at-will employment contract with GEPAZ and ZR FEC. Gillard was terminated at the end of December 2016.

         In late 2013, GEP Ltd contracted with Gurner, through his company Marlin Wood, to conduct consultancy services. Soon after, GEP Ltd deployed Gurner to serve as Managing Director of ZR FEC. The parties agree that this position initially was part of the consulting agreement. Plaintiffs contend, however, that by early 2014, Gurner became an employee of GEPAZ and ZR FEC, continuing on in his role as Managing Director. Gurner served in this role until he was relieved of his day-to-day responsibilities in October 2016.

         Due to cashflow issues, a portion of Plaintiffs' wages were deferred. Plaintiffs allege that they never received these deferred wages. In May 2017, Plaintiffs filed this action, raising FLSA, AWA, and contract claims. Defendants filed a counter-claim for conversion. (Doc. 22.) Defendants seek summary judgment on Plaintiffs' claims. (Docs. 67-69.)


         Summary judgment is appropriate when there is no genuine dispute as to any material fact and, viewing those facts in a light most favorable to the nonmoving party, the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). Summary judgment may also be entered “against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A fact is material if it might affect the outcome of the case, and a dispute is genuine if a reasonable jury could find for the nonmoving party based on the competing evidence. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

         The party seeking summary judgment “bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact.” Celotex, 477 U.S. at 323. The burden then shifts to the non-movant to establish the existence of a genuine and material factual dispute. Id. at 324. The non-movant “must do more than simply show that there is some metaphysical doubt as to the material facts, ” and instead “come forward with specific facts showing that there is a genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986) (internal quotation and citation omitted). Conclusory allegations, unsupported by factual material, are insufficient to defeat summary judgment. Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989). If the non-movant's opposition fails to cite specifically to evidentiary materials, the court is not required to either search the entire record for evidence establishing a genuine issue of material fact or obtain the missing materials. See Carmen v. S.F. Unified Sch. Dist., 237 F.3d 1026, 1028-29 (9th Cir. 2001); Forsberg v. Pac. N.W. Bell Tel. Co., 840 F.2d 1409, 1417-18 (9th Cir. 1988).


         I. Preliminary Matters

         At the outset, the Court must address Defendants' request that the Court disregard Plaintiffs' “noncompliant” controverting statement of facts, deem Defendants' statement of facts admitted, and exclude Plaintiffs' declarations. (Docs. 95-97 at 3.)

         A. Controverting Statement of Facts[2]

         This District's Local Rules of Practice impose specific requirements on the form and content of summary judgment motions. “Any party filing a motion for summary judgment must file a statement, separate from the motion and memorandum of law, setting forth each material fact on which the party relies in support of the motion.” LRCiv 56.1(a). Each of these facts “must refer to a specific admissible portion of the record where the fact finds support (for example, affidavit, deposition, discovery response, etc.).” Id. Likewise:

Any party opposing a motion for summary judgment must file a statement, separate from that party's memorandum of law, setting forth:
(1) for each paragraph of the moving party's separate statement of facts, a correspondingly numbered paragraph indicating whether the party disputes the statement of fact set forth in that paragraph and a reference to the specific admissible portion of the record supporting the party's position if the fact is disputed; and
(2) any additional facts that establish a genuine issue of material fact or otherwise preclude judgment in favor of the moving party. Each additional fact must be set forth in a separately numbered paragraph and must refer to a specific admissible portion of the record where the fact finds support.

LRCiv 56.1(b). The court may deem a movant's separate statement of facts to be true if the non-movant does not comply with these rules. See Szaley v. Pima Cty., 371 Fed. App'x 734, 735 (9th Cir. 2010).

         Defendants contend that Plaintiffs' controverting statement of facts: (1) is not correspondingly numbered to their statement of facts; (2) fails to set out new factual allegations in separate paragraphs; (3) exceeds the page limit; and (4) relies on unauthenticated documents. (Docs. 95-97 at 3.) The Court discusses each in turn.

         First, it simply is untrue that Plaintiffs' controverting statement of facts is not correspondingly numbered to Defendants' statement of facts. The one exception is paragraph 77 of Defendants' statement of facts, which Plaintiffs fail to address in a correspondingly numbered paragraph and therefore is admitted for purposes of the pending motions.

         Second, Plaintiffs' controverting statement of facts fails to comply with the Local Rules because each correspondingly numbered paragraph does not clearly admit or dispute the fact Defendants asserted. Instead, Plaintiffs often neglect to say whether a factual assertion is admitted or disputed, and instead barrel into a lengthy narrative or argument over the significance of or inferences that may be drawn from facts (for a particularly egregious example, see paragraph 71 of Plaintiffs' controverting statement, which consumes more than a page). Plaintiffs are strongly encouraged to review Hunton v. American Zurich Insurance Company, No. CV-16-00539-PHX-DLR, 2018 WL 1182552 (D. Ariz. Mar. 7, 2018), which discusses at length how separate and controverting statements of facts often are misused. In the future, the first word of any correspondingly numbered paragraph should be either “admitted” or “disputed.” If a fact is admitted, there should be no follow up. If a fact is disputed, the only follow up should be a citation to the admissible portion of the record where controverting evidence may be found. If the fact is admitted, but Plaintiffs believe additional information is needed for context, that additional evidence should be provided in a separately numbered statement of additional fact precluding summary judgment.

         With that said, the Court will not take the extraordinary step of deeming all of Defendants' statements of fact to be admitted. Though Plaintiffs' controverting statement fails to comply with the Local Rules in many of the same ways described in the Hunton case, it nonetheless is apparent from the submission that there are genuine and material disputes of fact. The Court prefers, where possible, to resolve cases on the merits and not on technicalities, even when the noncompliant nature of some submissions makes that task particularly difficult.

         Next, Defendants contend that Plaintiffs' controverting statement of facts “wildly exceeds” the page limit. In support, Defendants highlight that Paragraph 6(c) Scheduling Order provides that statements of fact “shall not exceed 10 pages in length, exclusive of exhibits.” (Doc. 43.) Plaintiffs' controverting statement of facts (not counting the exhibits or certificate of service) spans 24 pages. (Doc. 89.) The Scheduling Order's 10-page limit, however, applies to the “one motion for summary judgment.” (Doc. 43 ¶ 6(b).) Here, upon Defendants' request, the Court allowed “[D]efendants to file 4 motions for summary judgment.” (Doc. 64.) Given that the Court's order failed to clarify how allowing 4 summary judgment motions rather than 1 affected the length of the accompanying statement of facts, the Court will not strike the excess pages. With that said, Plaintiffs probably could have substantially reduced the length of their controverting statement of facts had they written it in a manner that strictly complied with the Local Rules, as explained in Hunton.

         Finally, Defendants' contend that Appendices A-I offered in support of Plaintiffs' controverting statement of facts “are unauthenticated documents.” (Docs. 95-7 at 3.) In support, Defendants cite Orr v. Bank of America for the proposition that “unauthenticated documents cannot be considered in a motion for summary judgment.” 285 F.3d 764, 773 (9th Cir. 2002). Defendants, however, “misread Orr []to hold that the Court may not consider unauthenticated documents to support an argument to overcome summary judgment.” Ericson v. City of Phx., No. 14-CV-1942-PHX-JAT, 2016 WL 6522805, at *8 (D. Ariz. Nov. 3, 2016). “Although Orr held that a non-movant's exhibits were inadmissible for purposes of opposing a motion for summary judgment, the Ninth Circuit later clarified that it is the admissibility of the contents of evidence-not its form-that determines whether evidence is admissible for purposes of avoiding summary judgment. Id. (citing Fraser v. Goodale, 342 F.3d 1032, 1036-37 (9th Cir. 2003)). The fact that Plaintiffs' appendices may be unauthenticated does not bar their consideration for the limited purpose of opposing Defendants' motions for summary judgment.[3] See Quanta Indem. Co. v. Amberwood Devs. Inc., No. 11-CV-1807-PHX-JAT, 2014 WL 126144, at *16 (D. Ariz. Mar. 26, 2014) (finding that unauthenticated spreadsheets are admissible for limited purpose of opposing motion for summary judgment).

         B. Plaintiffs' Declarations

         Defendants contend that Plaintiffs' “declarations should be disregarded as shams.” (Docs. 95-97 at 3.) “The general rule in the Ninth Circuit is that a party cannot create an issue of fact by an affidavit contradicting his prior deposition testimony.” Van Asdale v. Int'l Game Tech., 577 F.3d 989, 998 (9th Cir. 2009). The sham affidavit rule is necessary because “if a party who has been examined at length on deposition could raise an issue of fact simply by submitting an affidavit contradicting his own prior testimony, this would greatly diminish the utility of summary judgment as a procedure for screening out sham issues of fact.” Kennedy v. Allied Mut. Ins. Co., 952 F.2d 262, 266 (9th Cir. 1991). However, “the sham affidavit rule should be applied with caution because it is in tension with the principle that the court is not to make credibility determinations when granting or denying summary judgment.” Yeager v. Bowlin, 693 F.3d 1076, 1080 (9th Cir. 2012).

         In order to trigger the sham affidavit rule, the Court “must make a factual determination that the contradiction is a sham, and the inconsistency between a party's deposition testimony and subsequent affidavit must be clear and unambiguous to justify striking the affidavit.” Id. “The non-moving party is not precluded from elaborating upon, explaining or clarifying prior testimony elicited by opposing counsel on deposition and minor inconsistencies that result from an honest discrepancy, a mistake, or newly discovered evidence afford no basis for excluding an opposition affidavit.” Id.

         Here, Defendants attach a chart setting out inconsistencies they believe demonstrate that Plaintiffs' declarations are shams. (Docs. 95-1; 96-1; and 97-1.) However, the statements in the declarations do not clearly and unambiguously contradict the declarants' previous deposition testimony. In fact, some statements have no apparent contradiction to deposition testimony. For instance, Defendants contend that Gurner's deposition testimony contradicts his declaration as to whether he was an employee of GEPAZ. (Doc. 97-1 at 4.) Defendants argument neglects to mention that, elsewhere in his deposition, when asked directly whether he was an employee of GEPAZ, Gurner answered in the affirmative.

Q: You were a salaried employee?
A: Correct.
Q: Well, actually, you weren't an employee of any of the entities, were you? You were an ...

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