Paschini v. Wavecrest Payment Services of the Americas, Inc. ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 MILES PASCHINI, Case No.: 3:19-cv-00033-L-NLS 12 Plaintiff, ORDER DENYING WITHOUT 13 v. PREJUDICE DEFENDANT’S MOTION FOR PARTIAL 14 WAVECREST PAYMENT SERVICES SUMMARY JUDGMENT OF THE AMERICAS, INC., 15 Defendant. (ECF No. 50) 16 17 18 Pending before the Court in this executive compensation action is Defendant’s 19 motion for partial summary judgment. Plaintiff filed an opposition, and Defendant 20 replied. For the reasons stated below, Defendant’s motion is denied without prejudice. 21 At the relevant time Defendant was a “provider of digital payment solutions,” 22 including cryptocurrency debit cards. (Joint Statement of Undisputed Facts, ECF No. 54- 23 4 (“Joint Statement”) at 2.) Some of Defendant’s cryptocurrency debit cards were issued 24 under Visa and MasterCard licenses. Visa-branded cards accounted for the majority of 25 Defendant’s revenue. According to Defendant, on January 4, 2018, Visa terminated its 26 license, which significantly reduced Defendant’s income, resulting in layoffs of the 27 majority of its staff. 28 1 Plaintiff was employed by Defendant on July 1, 2015, as its Chief Revenue 2 Officer. Pursuant to his employment agreement and two subsequent amendments, 3 Plaintiff earned a salary as well as commissions and bonuses. (Joint Statement at 2.) 4 Defendant terminated Plaintiff on January 12, 2018, without cause and before 5 paying him all the commissions and bonuses earned in 2017, which Plaintiff claims 6 totaled more than $220,000. According to Plaintiff, on the date of his termination, he 7 was presented with a settlement agreement conditioning receipt of his earned commission 8 and “separation payment” on a waiver of all claims against Defendant, including 9 additional sums Plaintiff claims are owing him. Plaintiff declined to sign. On February 10 20, 2018, Defendant unilaterally reduced the calculation of the fourth quarter gross profit, 11 consequently eliminating Plaintiff’s earned commission and bonus for that period. In the 12 same email, Defendant claimed Plaintiff owed more than $3,000 for prior overpayment of 13 commissions and/or bonuses. 14 Based on the foregoing, Plaintiff filed an action alleging breach of contract, 15 conversion, bad faith breach of the compensation terms of his contract, theft in violation 16 of California Penal Code § 484, wrongful termination in violation of public policy 17 (termination to avoid payment of earned compensation), nonpayment of wages upon 18 termination in violation of his employment contract and various provisions of California 19 Labor Code, and unfair competition in violation of California Business & Professions 20 Code § 17200 et seq. Plaintiff seeks damages, including punitive damages, as well as 21 other relief. The Court has diversity jurisdiction over the claims pursuant to 28 U.S.C. 22 1332. 23 Pending before the Court is Defendant’s motion for partial summary judgment. 24 Defendant contends it is entitled to summary adjudication of the claim alleging wrongful 25 termination in violation of public policy and related claim for punitive damages, as well 26 as claims for conversion and theft of unpaid wages. Plaintiff opposes these arguments on 27 substantive and procedural grounds. Specifically, Plaintiff is requesting the motion be 28 1 denied or continued because he has not received discovery responses, he needs to fully 2 oppose Defendant’s motion. 3 Federal Rule of Civil Procedure 56 empowers the Court to enter summary 4 judgment on factually unsupported claims or defenses. Summary judgment or 5 adjudication of issues is appropriate if depositions, answers to interrogatories, and 6 admissions on file, together with the affidavits, if any, show there is no genuine dispute 7 as to any material fact and the moving party is entitled to judgment as a matter of law. 8 Fed. R. Civ. P. 56(a), (c)(1). 9 The burden on the party moving for summary judgment depends on whether it 10 bears the burden of proof at trial. If, as here, the moving party is requesting summary 11 adjudication of the opposing party’s claims, it can meet its burden on summary judgment 12 either by producing affirmative evidence negating an essential element of the opposing 13 party's case or showing that the opposing party does not have evidence necessary to 14 support its case. Nissan Fire & Marine Ins. Co., Ltd. v. Fritz Companies, Inc., 210 F.3d 15 1099, 1105-06 (9th Cir. 2000). 16 If the moving party meets this burden, the opposing party must produce evidence 17 to support its claim or defense. Nissan Fire & Marine Ins., 210 F.3d at 1103. In this 18 regard, the opposing party must “go beyond the pleadings and by [its] own affidavits, or 19 by the depositions, answers to interrogatories, and admissions on file, designate specific 20 facts showing that there is a genuine issue for trial.” Celotex Corp. v. Catrett, 477 U.S. 21 317, 324 (1986). 22 Alternatively, if the opposing party shows by declaration “that, for specified 23 reasons, it cannot present facts essential to justify its opposition, the court may [¶] defer 24 considering the motion or deny it.” Fed. R. Civ. Proc. 56(d). Plaintiff claims he cannot 25 fully oppose Defendant’s motion because Defendant has not responded to discovery 26 requests and has not produced key witnesses for deposition. 27 The thrust of Defendant’s motion is that Plaintiff was not terminated to deprive 28 him of his earned compensation but as a part of company-wide restructuring. This theory 1 is largely supported by the declaration of John Racine, Defendant’s Chief Operating 2 Officer. (ECF No. 50-3.) Plaintiff’s opposition largely rests on the theory that he was 3 singled out for termination before the company-wide layoffs commenced. With this 4 contention he supports the wrongful termination claims, as well as the theft and 5 conversion claims, all of which are being challenged in Defendant’s motion. 6 Plaintiff supports this contention with a photograph of Mr. Racine’s hand-written 7 journal entry in January 2018 which he claims shows he was individually selected for 8 termination at that time. (Decl. of Miles Paschini, ECF No. 51-1, at 6-7 & Ex. G, ECF 9 No. 51-4, at 55-56.) He contrasts this document with Mr. Racine’s email to shareholders, 10 dated April 6, 2018, which states that Defendant had 11 just undertaken a financial restructuring that will ultimately eliminate 80% of our overhead, consolidating most operations into a core team in Gibraltar 12 and seeing the phase-down of our operations in the U.S. and India. 13 14 (Id. Ex. F, ECF No. 51-4, at 52-54 (emphasis added).) 15 Defendant objects to Plaintiff’s reliance on Mr. Racine’s journal entry arguing it is 16 unauthenticated and lacks foundation. (Def.’s Objection, ECF No. 54-3, at 2-3.) 17 Defendant objects to Plaintiff’s reliance on Mr. Racine’s email arguing it is hearsay 18 without an exception. (Id. at 4.) These exhibits are central to Plaintiff’s theory that he 19 was not terminated as a part of company-wide restructuring but was singled out to avoid 20 paying him his earned commission and bonus. Plaintiff cannot address Defendant’s 21 objections without deposing Mr. Racine, and Defendant had not produced him for 22 deposition as of the filing of Plaintiff’s opposition brief. (See Decl. of Chandra Kiamilev, 23 ECF No. 51-2 (“Kiamilev Decl.”), at 3.) 24 According to Plaintiff’s counsel’s declaration, Defendant had neither produced key 25 documentary evidence requested in discovery, including documents relating to 26 Defendant’s unilateral reduction of its fourth quarter gross profit amount which resulted 27 in the elimination of the compensation Plaintiff claims is owing, and has evaded 28 1 || producing its person most knowledgeable and Mr. Racine for deposition. (Kiamilev 2 || Decl. at 2-3.) 3 Defense counsel’s declaration shows that some delay in the discovery production 4 || may have been due to the withdrawal of Defendant’s prior counsel and that the new 5 || counsel engaged in extensive meet-and-confer efforts regarding overdue document 6 || productions and Mr. Racine’s deposition. (Decl. of Thomas Ingrassia, ECF No. 54-1 7 || CIngrassia Decl.”) & Ex. 4, ECF No. 54-2.) He does not dispute, however, that he filed 8 pending motion only 17 days after an incomplete document production and without 9 ||Mr. Racine’s deposition. The Court finds unpersuasive the suggestion that Plaintiff’s 10 || counsel should have arranged for Mr. Racine’s deposition before production of relevant 11 |}documents. (See Ingrassia Decl. at 2.) 12 Based on the foregoing, the Court finds that Plaintiff meets Rule 56(d) 13 ||requirements. Defendant’s summary judgment motion is denied without prejudice. 14 IT IS SO ORDERED. 15 16 ||Dated: November 2, 2020 pee ep? 18 H . James Lorenz, 19 United States District Judge 20 21 22 23 24 25 26 27 28