Filed 7/16/15 Garcia v. Seacon Logix CA2/4
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.


           IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                   SECOND APPELLATE DISTRICT

                                                DIVISION FOUR


ROMERO GARCIA et al.,                                                B248227

         Plaintiffs and Respondents,                                 (Los Angeles County
                                                                      Super. Ct. No. NS024850)
         v.

SEACON LOGIX, INC.,

         Defendant and Appellant.




         APPEAL from a judgment of the Superior Court of Los Angeles County,
Michael P. Vicencia, Judge. Affirmed.
         Prima Law Group, Inc., 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 28021 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 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.


              FACTUAL AND PROCEDURAL BACKGROUND
Overview
      Seacon’s business involves arranging the transportation of cargo from the
Port of Long Beach and 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


1
      All section references are to the Labor Code.

                                           2
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 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.

                                          3
      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.




                                          4
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.
      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 billing Seacon’s
customers and did not believe they had the ability to negotiate their payments.
      Respondents were paid by Seacon on a weekly basis. They did not
understand how the amounts of their paychecks were calculated, testifying that
Hyon determined the amounts. The $450 lease payments and $200 insurance
payments usually were deducted from their weekly paychecks, although
occasionally a smaller amount was deducted, when determined by Hyon.




                                          5
Termination
      Aguilar was terminated after he took five days off to care for his son. He
asked permission for time off from a Spanish-speaking secretary named Yvette,
who told him that she would explain the situation to Hyon. When Aguilar returned
to work after taking care of his son, Hyon took the truck keys from him and told
him he was no longer needed. According to Aguilar, Hyon never told him that he
was behind on his lease payments.
      Gonzalez similarly was terminated after taking a week off for his mother’s
funeral. Gonzalez told Yvette he would be gone for a week, but Hyon took the
truck keys away from Gonzalez when he returned. Gonzalez testified that he did
not have the option of continuing to make the lease payments and use the truck
after being terminated.
      Urbina was terminated after Seacon’s insurance company declined to insure
him. Urbina then obtained his own insurance policy, but Hyon told him the truck
could not be insured under two different policies, so Urbina was terminated.
      According to Garcia, Hyon terminated him after he tried to negotiate with
Hyon for more money for fuel.


Testimony of Seacon Employees, Hyon and Lee
      Hyon described Seacon as a logistics company, although he acknowledged
that Seacon’s primary function was to deliver cargo to and from ports and
warehouses. He acknowledged that he alone determined how much the drivers
would earn per delivery and how much they paid for insurance. Hyon denied
firing Gonzalez for taking a week off for his mother’s funeral. Instead, he stated
that he terminated the contract because he was afraid Gonzalez would not keep up
with the lease payments. However, Lee testified that Seacon directed him to fire

                                         6
Garcia because Garcia refused to allow Seacon to inspect his truck. Lee denied
that Garcia was terminated for being behind in his lease payments.
      According to Hyon, he terminated only the lease agreements, not the sub-
haul or transportation agreements, with Garcia, Gonzalez, and Aguilar, and he
terminated the lease agreements because they were behind on their lease payments.
When he terminated the contracts with Gonzalez, Garcia, and Urbina, he did not
give them 30 days’ notice, as required by the contract. He terminated Aguilar’s
contract because he “disappeared” for two weeks and did not respond to attempts
to contact him.
      Hyon denied requiring the drivers to check in during the day or follow a
specific route. He further denied retaliating against a driver for rejecting an
assignment.
      Hyon stated that no driver asked if he could work for another company until
sometime in 2011 or 2012. He replied that he needed to check insurance and
liability issues and subsequently told the driver that he could if he met certain
conditions, such as continuing to make lease payments.
      According to Hyon, Urbina earned $40,000 in six months of work, while
Garcia earned $24,000 during the same period. He explained that Urbina earned
more because he took any available job and worked diligently.
      Hyon was aware of two drivers who leased trucks from Seacon but did not
park in Seacon’s yard. He testified that any driver could lease the truck, work for a
different company, and keep the truck in Seacon’s yard and take it home if he
preferred. The drivers parked in Seacon’s yard because the ports prohibited
parking the trucks on the street.
      Lee, Seacon’s dispatcher, described Seacon as a trucking company in the
business of moving containers to customers. He conceded that the drivers were

                                           7
essential to the business. Between August 2010 and May 2011, 19 of Seacon’s 22
workers were drivers; the other three were office staff. Lee denied requiring the
drivers to arrive at a certain time or to show up at all, stating that there would be no
consequence if a driver did not show up for several days in a row. He also denied
requiring the drivers to let him know if they were going to be late with a delivery
because of traffic. He acknowledged, however, that he generally knew where the
drivers were at all times throughout the day.


Testimony of Witnesses Called by Seacon
      Seacon subpoenaed two witnesses, Eddie Solares and Jaime Carrillo, who
were drivers for Seacon. Solares testified that Seacon controlled his daily activities
by giving him a load, telling him where to deliver it, and then giving him the next
load. The dispatcher supervised his daily activities by controlling all his
movements. When Solares rejected an assignment, Seacon did not give him work
the following day. Consistent with respondents’ testimony, Solares testified that
Hyon told him the trucks belonged to Seacon, and he could not work for another
company. Solares previously had owned his own truck, but when the port
mandated the use of clean trucks, he was unable to drive his truck, so he needed to
use Seacon’s truck. When he owned his own truck, he considered himself an
independent contractor.
      Carrillo testified that when he owned his own truck, he was a subcontractor.
He was hired as a Seacon employee and was required to lease a truck. Seacon
controlled every aspect of his daily work, assigning him loads, telling him the
routes to take and what time to arrive and leave. Carrillo stated that if he needed to
leave early one day, he would not receive work the following day. Hyon
previously had told Carrillo he could not work for another company. However,

                                           8
after respondents’ claim was filed, Hyon told him he could work for other
companies.


                                    DISCUSSION
I.    Substantial Evidence
      Seacon contends that the trial court’s finding that respondents were
employees, not independent contractors, is not supported by substantial evidence.
We disagree.
      “In reviewing the evidence on appeal, we resolve all conflicts in favor of the
prevailing party, and we indulge in all legitimate and reasonable inferences to
uphold the finding if possible. Our power begins and ends with a determination as
to whether there is any substantial evidence, contradicted or uncontradicted, that
will support the finding. When two or more inferences can be reasonably deduced
from the facts, we cannot substitute our own deductions for those of the trial court.
[Citation.]” (Air Couriers Internat. v. Employment Development Dept. (2007) 150
Cal.App.4th 923, 937 (Air Couriers).)
      Respondents sought reimbursement under section 2802 for lease and
insurance payments deducted from their weekly paychecks, as well as fuel and
repair expenses. Section 2802 provides in pertinent part that “[a]n employer shall
indemnify his or her employee for all necessary expenditures or losses incurred by
the employee in direct consequence of the discharge of his or her duties, or of his
or her obedience to the directions of the employer, . . . .” (§ 2802, subd. (a), italics
added.)
      “Because the Labor Code does not expressly define ‘employee’ for purposes
of section 2802, the common law test of employment applies. [Citation.]”
(Estrada v. FedEx Ground Package System, Inc. (2007) 154 Cal.App.4th 1, 10

                                           9
(Estrada).) “‘“[T]he principal test of an employment relationship is whether the
person to whom service is rendered has the right to control the manner and means
of accomplishing the result desired . . . .” [Citations.]’ [Citation.]” (Arzate v.
Bridge Terminal Transport, Inc. (2011) 192 Cal.App.4th 419, 426 (Arzate); Ayala
v. Antelope Valley Newspapers, Inc. (2014) 59 Cal.4th 522, 531 (Ayala).) In
addition, there are a number of secondary factors, including “(1) whether the
worker is engaged in a distinct occupation or business, (2) whether, considering the
kind of occupation and locality, the work is usually done under the principal’s
direction or by a specialist without supervision, (3) the skill required, (4) whether
the principal or worker supplies the instrumentalities, tools, and place of work,
(5) the length of time for which the services are to be performed, (6) the method of
payment, whether by time or by job, (7) whether the work is part of the principal’s
regular business, and (8) whether the parties believe they are creating an employer-
employee relationship. [Citations.] The parties’ label is not dispositive and will be
ignored if their actual conduct establishes a different relationship. [Citations.]”
(Estrada, supra, 154 Cal.App.4th at pp. 10-11, fn. omitted; S. G. Borello & Sons,
Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341, 351 (Borello).)
      In finding that respondents were employees, not independent contractors, the
trial court credited respondents’ testimony that Seacon controlled the manner and
means of their work, and rejected Seacon’s evidence that respondents retained such
control. The court also relied on evidence that Seacon required drivers to enter
into both a lease agreement and a sub-haul agreement or transportation agreement,
thereby obligating drivers to lease their trucks from, and drive them for, Seacon.
The court determined that this arrangement gave Seacon “tremendous control”
over the drivers because if they did not comply with Seacon’s requirements, they



                                          10
would lose their trucks. The trial court’s conclusions are fully supported by the
evidence.


      A.     Control
      Respondents’ testimony, credited by the trial court, clearly proved that
Seacon controlled the manner and means of their work. According to respondents,
they were required to arrive at work at times specified by Seacon, and required to
call if they were going to be late or absent. (See Ruiz v. Affinity Logistics Corp.
(9th Cir. 2014) 754 F.3d 1093, 1102 [drivers were employees, not independent
contractors under California law where the company required drivers to report to
warehouse and attend meeting every morning, and controlled equipment,
appearance, and rate of pay].) Any absence had to be approved by Hyon. Lee
assigned and tightly controlled respondent’s delivery assignments. (See Alexander
v. FedEx Ground Package System, Inc. (9th Cir. 2014) 765 F.3d 981, 989-990
[applying California law, finding that FedEx drivers were employees, not
independent contractors, where, inter alia, FedEx controlled how and when drivers
delivered packages, drivers’ appearance, and their work hours] (Alexander).)
Seacon provided the customers and determined the prices to be charged. (See JKH
Enterprises, Inc. v. Department of Industrial Relations (2006) 142 Cal.App.4th
1046, 1064 [“By obtaining the clients in need of the service and providing the
workers to conduct it, [defendant company] retained all necessary control over the
operation as a whole.”]; Alexander, supra, 765 F.3d at p. 995 [reasoning that the
customers were FedEx’s customers, not the drivers’].) During respondents’ work
day, Lee maintained regular contact to monitor the progress of deliveries.
Respondents had no choice of assignments, and declining an assignment resulted



                                          11
in retaliation by being refused work. Respondents were not allowed to work for
another company, and could use their truck only for jobs with Seacon.
      Respondents’ testimony was corroborated by Solares and Carrillo, who
testified that Lee controlled their daily activities and movements, and that Hyon
told them they could not work for a different company and that the trucks belonged
to Seacon.
      Seacon challenges the sufficiency of this evidence by relying on the
testimony of Hyon and Lee, which was not credited by the trial court. Of course,
on appeal, we do not reweigh the evidence, and determine only “whether there is
any substantial evidence, contradicted or uncontradicted, that will support the
finding.” (Air Couriers, supra, 150 Cal.App.4th at p. 937, italics added.)
      Seacon also contends that the trial court’s finding regarding control is
contradicted by the language of the sub-haul agreement and the transportation
agreement. 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, similarly
defined the driver as a subcontractor. The transportation agreement provided, inter
alia, that the subcontractor was free to use his equipment for any other business
purpose.
      However, the language in the agreements giving the drivers control over
their work and describing them as independent contractors is not dispositive. (See
Estrada, supra, 154 Cal.App.4th at pp. 10-11 [“The parties’ label is not dispositive
and will be ignored if their actual conduct establishes a different relationship.

                                          12
[Citations.]”]; Borello, supra, 48 Cal.3d at p. 349 [“The label placed by the parties
on their relationship is not dispositive, and subterfuges are not countenanced.
[Citations.]”].) As we have explained, regardless of the language of the sub-haul
agreement and transportation agreements, substantial evidence proves that Seacon
effectively controlled the manner and means of respondents’ work.


       B.     Secondary Factors2
       “[W]hile the right to control work details ‘is the “most important” or “most
significant” consideration, the authorities also endorse several “secondary” indicia
of the nature of a service relationship.’ [Citation.]” (Arzate, supra, 192
Cal.App.4th at p. 426.) “The individual factors ‘“cannot be applied mechanically
as separate tests; they are intertwined and their weight depends often on particular
combinations.”’ [Citations.]” (Id. at pp. 426-427, fn. omitted.) Here, the balance
of these secondary factors supports the finding that respondents are employees.
We discuss each factor in turn.


              1.     Right to Discharge at Will
       “‘[Strong] evidence in support of an employment relationship is the right to
discharge at will, without cause. [Citations.]’ [Citation.]” (Borello, supra, 48
Cal.3d at pp. 350-351; see also Ayala, supra, 59 Cal.4th at p. 531 [“Perhaps the
strongest evidence of the right to control is whether the hirer can discharge the
worker without cause, because ‘[t]he power of the principal to terminate the
services of the agent gives him the means of controlling the agent’s activities.’
[Citations.]”].) Here, respondents testified that they were terminated suddenly and

2
       Although the parties discuss the secondary factors in detail, we address them
cursorily because the trial court’s decision rested primarily on its finding regarding
control.
                                              13
with no notice by Seacon – Aguilar on the day he returned from five days off to
take care of his son, and Gonzalez upon his return from his mother’s funeral.
Thus, the evidence supported a finding that Seacon terminated respondents at will.
      Noting that the termination clauses in the transportation agreement and sub-
haul agreement required 30 days’ notice or written notice, Seacon contends
respondents were not dischargeable at will. However, the existence of the
termination clauses does not mean that respondents’ testimony is insufficient to
prove that despite the clauses, Seacon exercised the right to terminate at will.


             2.     Distinct Occupation
      A finding of employment is supported where the workers are “a regular and
integrated portion of [the] business operation.” (Borello, supra, 48 Cal.3d at p.
357.) As the trial court found, there is little to no distinction between respondents’
work and Seacon’s business. Although Hyon described Seacon as a logistics
company, he acknowledged that Seacon’s primary function was to deliver cargo
from the ports to warehouses and back. Because Seacon’s business consisted
almost entirely of transporting cargo, respondents’ work transporting that cargo did
not constitute a distinct occupation or business. (See Alexander, supra, 765 F.3d at
p. 995 [describing drivers’ work as “‘wholly integrated into FedEx’s operation’”].)


             3.     Work Under Principal’s Direction or Without Supervision
      As already discussed, the evidence that Seacon controlled respondents’ work
by setting their hours, assigning their jobs, and monitoring their progress
throughout the day supports a finding that respondents worked under Seacon’s
direction.



                                          14
             4.    Skill Required
      The trial court found that this factor did not favor either party, reasoning that
the work required a Class A license, but little other skill. We agree.


             5.    Instrumentalities, Tools, and Place of Work
      Seacon provided the trucks and required respondents to report to work at its
yard and park the trucks there. Although Seacon argues that the drivers, not
Seacon, provided the trucks, there is substantial evidence that Seacon owned the
trucks and did not allow respondents to use the trucks for any purpose other than
working for Seacon. (See Estrada, supra, 154 Cal.App.4th at p. 12 [substantial
evidence supported the conclusion that drivers were employees, not independent
contractors, where their trucks and scanners “are obtained from FedEx-approved
providers, usually financed through FedEx, and repaid through deductions from the
drivers’ weekly checks”].)


             6.    Payment by Time or by Job
      Where workers are paid weekly or by the hour, rather than by the job, it
suggests an employment relationship. (See Estrada, supra, 154 Cal.App.4th at p.
12.) The trial court found that this factor supported a finding that respondents were
independent contractors. Although respondents received weekly paychecks, the
court noted that they were paid by the delivery. The court further found that
respondents’ assertion that they were unable to negotiate the amount they received
per delivery was not supported by the evidence. Urbina testified that he once
attempted to negotiate a higher rate, but he was unsuccessful. The court ultimately
concluded that this consideration was not “particularly probative.” Given the



                                          15
strength of the evidence supporting an employment relationship, the court was well
within its discretion to discount the probative value of this factor.


             7.     Work Part of Principal’s Regular Business
      As the trial court stated, and the evidence already discussed proved,
respondents’ work is part of Seacon’s regular business, because Seacon’s entire
business is “to move cargo for the customer.”


             8.     Parties’ Belief
      The trial court found that this factor did not favor either party, stating that,
not surprisingly, respondents believed they were forming an employment
relationship, and Seacon believed they were forming an independent contractor
relationship. We find no fault in that reasoning.


             9.     Conclusion
      Taking into consideration all of the above factors, the trial court’s reasoning
is unassailable: substantial evidence proves that the balance of the secondary
factors, like the primary factor of control, supports the finding that respondents
were employees, not independent contractors.


II.   Seacon Forfeited the Issue of the Amount of Damages
      Seacon contends that the trial court erred in determining the amount of
damages by including compensation for clean truck fees and fuel surcharges.
However, Seacon has forfeited this issue on appeal by failing to raise it in the trial
court. (People v. JTH Tax, Inc. (2013) 212 Cal.App.4th 1219, 1232.) In its reply
brief, Seacon contends that it did raise the issue in the trial court, citing numerous

                                          16
pages in the trial transcript. But the pages cited merely include references by the
parties or attorneys to the clean truck rules or clean truck fees at trial. None
involves an objection to compensation for clean truck fees and fuel surcharges.
      Moreover, besides failing to raise the issue in the trial court, Seacon has
failed in its appellate briefing to provide us with any citation to legal authority that
supports its position. The two cases cited in Seacon’s reply brief, Estrada, supra,
154 Cal.App.4th at page 26, and Porter v. Quillin (1981) 123 Cal.App.3d 869, do
not discuss the issue. “‘An appellate brief “should contain a legal argument with
citation of authorities on the points made. If none is furnished on a particular
point, the court may treat it as [forfeited], and pass it without consideration.”
[Citation.]’ [Citation.] It is not the function of this court to comb the record
looking for the evidence or absence of evidence to support [a party’s] argument.
[Citations.]” (People ex rel. Reisig v. Acuna (2010) 182 Cal.App.4th 866, 879; see
Cal. Rules of Court, rule 8.204(a)(1)(C) [appellate briefs must be supported by
record citations]; People ex rel. Strathmann v. Acacia Research Corp. (2012) 210
Cal.App.4th 487, 502–503 [articulating rule that if party fails to support its
argument with necessary citations to the record the argument will be deemed
waived].)
      For both the above reasons, we conclude that Seacon has forfeited its
challenge to the amount of damages awarded.




                                           17
                              DISPOSITION
          The judgment is affirmed. Respondents are entitled to costs on
appeal.
          NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS




                                          WILLHITE, Acting P.J.




          We concur:




          MANELLA, J.




          COLLINS, J.




                                     18
