Shin v. Farmers Group CA2/2

Filed 6/24/13 Shin v. Farmers Group CA2/2
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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 TWO

SUN-WOO SHIN, B240989

Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC448413)
v.

FARMERS GROUP, INC., et al.,

Defendants and Respondents.

APPEAL from a judgment of the Superior Court of Los Angeles County.
Susan Bryant-Deason, Judge. Affirmed.

The Anfanger Law Office, Nancy B. Anfanger for Plaintiff and Appellant.

Locke Lord, Stephen A. Tuggy, Nina Huerta for Defendants and Respondents.

___________________________________________________
 Plaintiff Sun-Woo (Sunny) Shin appeals from a judgment after an order granting
summary judgment was entered in favor of defendants Farmers Group, Inc., Farmers
Insurance Exchange, Truck Insurance Exchange, Fire Insurance Exchange, Mid-Century
Insurance Company, and Farmers New World Life Insurance Company (collectively,
Farmers). Shin brought various claims, all of which were dependent on the existence of
an employer-employee relationship with Farmers. The trial court found that Shin was an
independent contractor and on that basis granted summary judgment in favor of Farmers.
We affirm.
BACKGROUND
Facts
Shin was experienced in insurance sales and marketing. In 2002, he became a
Farmers reserve district manager, with the goal of eventually becoming a district
manager. In late 2003, he applied for a district manager position with Farmers, believing
that he would run the district assigned to him as his own business. In connection with his
application, Shin submitted a “personal history form” that stated: “This is not an
application for employment, but an application for appointment as an independent-
contractor district manager representing our organization.”
Shin prepared a “business continuation plan” that contained a mission statement, a
strategic plan, a description of how he would organize and manage his business, and a
detailed expense budget. Among other things, Shin‟s plan contained the statement: “As
the business owner the district manager needs to select quality candidates to staff his
office.” It further stated that he would organize the business as a separate corporation
and would invest his own funds and a percentage of his overwrite (commission) into the
business.
Shin was appointed as a Farmers district manager in January 2004. The “District
Manager‟s Appointment Agreement” (DMAA) signed by Shin stated: “Nothing
contained herein is intended or shall be construed to create the relationship of employer
and employee. The time to be expended by District Manager is solely within his/her
discretion, and the persons to be solicited and the area within the district involved

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wherein solicitation shall be conducted is at the election of the District Manager. No
control is to be exercised by [Farmers] over the time when, the place where, or the
manner in which the District Manager shall operate in carrying out the objectives of this
Agreement provided only that they conform to normal good business practice, and to all
State and Federal laws governing the conduct of [Farmers], and [its] Agents.” Related
agreements, also signed by Shin, expressly stated he was being retained as an
independent contractor. The DMAA stated that, as district manager, Shin would “recruit
for appointment and train as many agents acceptable to [Farmers] as may be required to
produce sales in accordance with goals and objectives established by [Farmers].” Shin
described his “main duty” as “increas[ing] policies sold in the district where I was
assigned as District Manager . . . and to market.”
After appointment as district manager, Shin incorporated his business as “Sunny
Shin Insurance Agency” (SSIA) and acquired an employer identification number from
the Internal Revenue Service. Shin invested $20,000 of his own cash in the business and
leased a set of offices in Anaheim Hills. He hired staff for the business, determining
whom to hire, how much he and his staff would be paid, and what hours they would
work. Shin retained a payroll services firm to process SSIA‟s payroll, and he paid his
employees‟ salaries. He bought computer equipment and services, office supplies, and
other business expenses. Eventually, Shin refinanced his home three times to provide
cash to support the district manager business.
Farmers communicated with Shin to encourage him to achieve Farmers‟ desired
results; i.e., that Shin, through SSIA, would train and recruit agents to achieve a certain
level of sales in the district. Farmers developed marketing programs to promote the sale
of its insurance products. Under the DMAA, Shin was required to train agents in his
district to use those marketing programs.
Procedural Background
Shin‟s district manager relationship with Farmers was not financially successful
and ended in August 2008. In October 2010, Shin initiated this lawsuit. The operative
third amended complaint, filed in August 2011, alleged claims for (1) failure to pay

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wages (Lab. Code, § 200 et seq.); (2) wrongful termination in violation of public policy;
(3) failure to indemnify (Lab. Code, § 2802); (4) withholding of wages (Lab. Code,
§ 221); (5) failure to pay minimum wages and overtime compensation (Lab. Code,
§§ 1194, 1197); and (6) unfair business practices (Bus. & Prof. Code, § 17200 et seq.).
Shin contended that as a district manager he was improperly classified as an independent
contractor, when he was actually an employee of Farmers.
Farmers brought its motion for summary judgment in September 2011. In support
of its motion, Farmers submitted a considerable amount of evidence obtained through
discovery and by declaration, and referred to the evidence in detail in its separate
statement. Shin‟s responsive separate statement, on the other hand, was defective. It
purported to dispute a number of facts without actually disputing the primary content of
the facts, it often cited to irrelevant or nonexistent evidence, and citations to the record
were overly vague or otherwise deficient. Shin relied almost entirely on his own
declaration for evidence, and much of the declaration was struck when Farmers‟
objections were sustained by the trial court.
The trial court heard Farmers‟ motion for summary judgment in January 2012.
Finding that Shin‟s claims could only be asserted by an employee and determining that
the evidence submitted by Farmers demonstrated that Shin was an independent
contractor, the trial court granted the motion for summary judgment.
Shin timely appealed.
DISCUSSION
I. Standard of review
The judgment is appealable. (Code Civ. Proc., § 437c, subd. (m)(1).) Summary
judgment “shall be granted if all the papers submitted show that there is no triable issue
as to any material fact and that the moving party is entitled to a judgment as a matter of
law.” (Id., subd. (c).) The moving papers are strictly construed, while the opposition is
liberally construed in the most favorable light; evidentiary doubts or ambiguities are
resolved in plaintiff‟s favor. (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763,
768.) Nevertheless, plaintiff “may not rely upon the mere allegations or denials of its

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pleadings” but instead must “set forth the specific facts showing that a triable issue of
material fact exists.” (Code Civ. Proc., § 437c, subd. (p)(2).) “The purpose of the law of
summary judgment is to provide courts with a mechanism to cut through the parties‟
pleadings in order to determine whether, despite their allegations, trial is in fact necessary
to resolve their dispute.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.)
Review is de novo. (Kahn v. East Side Union High School Dist. (2003) 31 Cal.4th 990,
1003.)
II. Plaintiff’s claims were all dependent on employee status
Shin acknowledges that each of his claims (including the unfair business practices
claim, which is derivative of the others) can only be asserted by an employee, not an
independent contractor.
The common law test for determining whether an employment relationship exists
was set forth in S.G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48
Cal.3d 341 (Borello): “„[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. . . .‟” (Id. at p. 350.) This primary test is often
insufficient when applied in isolation, however, and so courts look to a number of other
factors, including “whether the principal has the right to discharge at will, without cause;
whether the one performing services is engaged in a distinct occupation or business; the
kind of occupation, with reference to whether, in the locality, the work is usually done
under the direction of the principal or by a specialist without supervision; the skill
required in the particular occupation; whether the principal or the worker supplies the
instrumentalities, tools, and the place of work for the person doing the work; the length of
time for which the services are to be performed; the method of payment, whether by the
time or by the job; whether or not the work is a part of the regular business of the
principal; and, whether or not the parties believe they are creating the relationship of
employer-employee.” (Arnold v. Mutual of Omaha Ins. Co. (2011) 202 Cal.App.4th 580,
584 (Arnold); Borello, supra, 48 Cal.3d at pp. 350-351.) These factors are not “„applied

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mechanically as separate tests,‟” but instead are “intertwined” and their weight depends
on a combination of factors. (Borello, at p. 351.)
This common law test for determining an employment relationship applies to
Shin‟s first, third, and fourth causes of action for failure to pay wages (Lab. Code, § 200
et seq.), failure to indemnify (Lab. Code, § 2802), and withholding of wages (Lab. Code,
§ 221). Each of these causes of action refers to an “employee” without defining the term,
and none is subject to a definition of “employee” found in the Labor Code. As such, the
common law definition of “employee” applies to each. (Arnold, supra, 202 Cal.App.4th
at pp. 586-587; Estrada v. FedEx Ground Package System, Inc. (2007) 154 Cal.App.4th
1, 10 (Estrada); Metropolitan Water Dist. v. Superior Court (2004) 32 Cal.4th 491, 500.)
Because Shin‟s unfair business practices cause of action is derivative of these three
causes of action, it is also governed by the common law definition. (See Arnold, at pp.
586-587.) Likewise, Shin‟s second cause of action for wrongful termination in violation
of public policy is subject to the common law standard. (Varisco v. Gateway Science &
Engineering, Inc. (2008) 166 Cal.App.4th 1099, 1102-1104 [applying Borello test to
claim of “tortious termination of employment contract in violation of public policy”];
Miklosy v. Regents of University of California (2008) 44 Cal.4th 876, 898-900 [wrongful
termination in violation of public policy claim requires employer-employee
relationship].)
The only cause of action asserted by Shin that is not strictly subject to the common
law standard for deciding whether a party is an independent contractor or an employee is
his claim for failure to pay minimum wages and overtime compensation (Lab. Code,
§§ 1194, 1197). Rather, for this cause of action, to determine whether an employment
relationship existed, we turn to the relevant wage order promulgated by the Industrial
Welfare Commission. (Martinez v. Combs (2010) 49 Cal.4th 35, 52, 56-57 (Martinez).)
Martinez examined the wage order applicable to agricultural occupations, but the wage
order at issue here, Wage Order No. 4-2001 (Cal. Code Regs., tit. 8, § 11040), contains
the same definitions of “employ” and “employer” that were analyzed in Martinez. (See
Martinez, at p. 59.) The wage order defines “employ” as “to engage, suffer, or permit to

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work.” (Cal. Code Regs., tit. 8, § 11040, subd. 2(E).) The definition of “employer”
“logically incorporates the separate definition of „employ‟ (i.e. „to engage, suffer, or
permit to work‟) as one alternative.” (Martinez, supra, 49 Cal.4th at p. 59.) It also
includes anyone who “„exercises control over . . . wages, hours, or working conditions.‟”
(Ibid.; Cal. Code Regs., tit. 8, § 11040, subd. 2(H).)
The Martinez decision noted that, although the wage order definition is not
entirely synonymous with common law definition of employment, the common law rule
“does play an important role.” (49 Cal.4th at p. 65.) Moreover, Martinez declined to
give the wage order definition an overly broad reading. Rather, the Court saw “no reason
to refrain from giving the IWC‟s definition of „employ‟ its historical meaning. . . . A
proprietor who knows that persons are working in his or her business without having
been formally hired, or while being paid less than the minimum wage, clearly suffers or
permits that work by failing to prevent it, while having the power to do so.” (Id. at p. 69.)
Applying the Martinez analysis to the minimum wage and overtime compensation claim
as stated in this case, the decision counsels a two-step process for determining whether an
employment relationship existed: (1) whether a common law employment relationship
was present and, if not, (2) whether Farmers exercised control over Shin‟s wages, hours,
or working conditions.
III. Shin was not an employee of Farmers
The determination of whether a person is an employee or an independent
contractor is generally one of fact if it is dependent on the resolution of disputed
evidence, but it can be decided as a matter of law if the evidence supports only one
credible conclusion. (Borello, supra, 48 Cal.3d at p. 349; Angelotti v. The Walt Disney
Co. (2011) 192 Cal.App.4th 1394, 1404.) The trial court found that the evidence
submitted in connection with the motion for summary judgment established that Shin was
an independent contractor. We agree.
In support of the motion for summary judgment, Farmers introduced evidence that
when seeking the district manager position, Shin believed that he would run the district
assigned to him as his own business. The documents and agreements signed by Shin in

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connection with his application and acceptance of the district manager position expressly
attested to the fact that the position was one of an independent contractor, not an
employee. Although materials of this sort are not dispositive, the fact that the parties
believed they were creating an independent contractor relationship, rather than an
employer-employee relationship, is relevant to determining independent contractor status
under the common law test. (Borello, supra, 48 Cal.3d at p. 349; Arnold, supra, 202
Cal.App.4th 580, 584.)
Further evidence supported the conclusion that Shin had the right to control the
manner and means of accomplishing the result desired by Farmers. He incorporated his
own separate business, SSIA, in which he invested substantial amounts of his own funds.
He found and rented an office for the SSIA business. He hired his own staff and
determined how much he and his staff would be paid and what hours they would work.
In addition, he paid for computer equipment and services, office supplies, and other
business expenses. These facts are all indicative of independent contractor status. (See
Borello, supra, 48 Cal.3d at p. 349; Arnold, supra, 202 Cal.App.4th 580, 584.)
Unlike cases relied on by Shin, such as Borello, in which the petitioners were
cucumber-harvesting laborers (48 Cal.3d at p. 345), or Estrada, where the plaintiffs were
delivery truck drivers and needed no experience or skills other than the ability to drive
(154 Cal.App.4th at p. 12), Shin had extensive experience in the insurance sales and
marketing field, had previously run and then sold his own Allstate agency, and was
licensed to sell insurance in California. Shin‟s work as a district manager was a high-
skill job, a factor weighing in favor of independent contractor status. (See Arnold, supra,
202 Cal.App.4th 580, 584.) Indeed, the relevant case law overwhelmingly favors the
position that parties in positions similar to Shin‟s are independent contractors. (See, e.g.,
id. at p. 582 [independent insurance agent found to be independent contractor]; Murray v.
Principal Fin. Group, Inc. (9th Cir. 2010) 613 F.3d 943, 944 [“[w]e, along with virtually
every other Circuit to consider similar issues, have held that insurance agents are
independent contractors and not employees”].)

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 In opposing the motion for summary judgment, Shin did not directly dispute most
the above evidence, and his responsive separate statement generally lacked reference to
facts evidencing an employer-employee relationship.1 On appeal, Shin lists numerous
“facts” that did not appear in his separate statement and/or that were struck by the trial
court. By failing to properly reference evidence in his responsive statement, we find that
Shin forfeited the right to rely on such evidence on appeal. (See Code Civ. Proc., § 437c.
subd. (b)(3) [failure to comply with separate statement requirement “may constitute a
sufficient ground, in the court‟s discretion, for granting the motion”]; Laabs v. City of
Victorville (2008) 163 Cal.App.4th 1242, 1266-1267; North Coast Business Park v.
Nielsen Construction Co. (1993) 17 Cal.App.4th 22, 30-31.) Further, Shin relied almost
entirely on his own declaration for evidence, and much of it was struck by sustained
objections. It is the appellant‟s “burden on appeal to affirmatively challenge the trial
court‟s evidentiary ruling, and demonstrate the court‟s error.” (Roe v. McDonald's Corp.
(2005) 129 Cal.App.4th 1107, 1114.) The appellant must “identify the court‟s
evidentiary ruling as a distinct assignment of error” and provide a separate argument
heading and analysis of the issue. (Ibid.) Shin has not demonstrated how the evidentiary
rulings were incorrect, and thus has forfeited his right to argue that the trial court abused
its discretion by excluding evidence. (See Salas v. Department of Transportation (2011)
198 Cal.App.4th 1058, 1075.)
The evidence properly before the court does not demonstrate a triable issue of
material fact. Even considering the evidence that Shin relies on in his appeal (most of
which he failed to properly refer to in his separate statement), we do not find that it tips
the balance in favor of an employment relationship. The facts that he had to attend
meetings and trainings, write reports, issue business plans, promote the Farmers brand,

1 As noted above, the responsive separate statement purported to dispute facts
without disputing the facts‟ primary content, it often cited to irrelevant or nonexistent
evidence, and citations to the record were overly vague (e.g., citing to “Shin Decl.,
paragraphs 2-75,” or citing to an “Anfanger Declaration” that does not appear in the
record).

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and maintain his office in a respectable manner are consistent with Farmers‟ expectation
as a contracting party that services would be delivered in an acceptable manner. (See
Mission Ins. Co. v. Workers’ Comp. Appeals Bd. (1981) 123 Cal.App.3d 211, 224
[establishing quality standards is not indicative of an employer-employee relationship;
“[o]n the contrary, an employer who controls the manner in which the work is done has
little need of establishing quality standards for completed work”].) The fact that SSIA
received payment at regular intervals, based at least in part on a percentage of premiums
paid on policies sold in his district, also does not evidence an employment relationship.
(See Arnold, supra, 202 Cal.App.4th at p. 589 [independent contractor insurance agent
was paid every two weeks, and payment was based on results and not the amount of time
spent working].) Nor does the fact that the DMAA could be terminated by either party
on 30 days‟ notice show that he was an employee of Farmers. (Ibid.; Varisco v. Gateway
Science & Engineering, Inc., supra, 166 Cal.App.4th 1099, 1107.) And the fact that he
was contractually prohibited from working for other insurance companies during his time
as district manager does not require a finding that he was an employee. (See Murray v.
Principal Fin. Group, Inc., supra, 613 F.3d at p. 944 [“career agent” deemed an
independent contractor]; Mt. Meadow, etc. v. Indus. Acc. Com. (1938) 25 Cal.App.2d
123, 125 [independent contractor distributor not allowed to handle competing products].)
“Even if one or two . . . individual factors might suggest an employment
relationship, summary judgment is nevertheless proper when . . . all the factors weighed
and considered as a whole establish that [plaintiff] was an independent contractor and not
an employee.” (Arnold, supra, 202 Cal.App.4th at p. 590.) Based on the summary
judgment papers, the only reasonable conclusion is that Shin was an independent
contractor under the common law test.
We also find that there is no triable issue of material fact whether Farmers
exercised control over Shin‟s wages, hours, or working conditions for purposes of his
minimum wage and overtime compensation claim. Shin controlled the timing and
amount of wages he was paid by SSIA, and he could increase his compensation by
recruiting and training successful insurance agents for his district. Farmers did not

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monitor or supervise the hours Shin worked and did not require Shin to report his hours
worked. Moreover, Shin rented SSIA‟s office himself, and he supplied the equipment
and supplies.
In sum, Farmers did not exercise the sort of control over Shin that is consistent
with an employment relationship. The trial court did not err by finding that Shin was an
independent contractor. Accordingly, summary judgment was properly granted.
IV. A continuance was not warranted
A trial court‟s decision to deny a request for a continuance so that a party may
seek more evidence to oppose a motion for summary judgment is reviewed for an abuse
of discretion. (Rodriguez v. Oto (2013) 212 Cal.App.4th 1020, 1038.) “In exercising its
discretion the court may properly consider the extent to which the requesting party‟s
failure to secure the contemplated evidence more seasonably results from a lack of
diligence on his part.” (Ibid.)
Shin fails to show that the trial court abused its discretion in denying a
continuance. It appears from the record that, after filing the case on October 29, 2010,
Shin propounded no discovery for almost an entire year. Finally, beginning on
October 28, 2011, Shin began the process of discovery. His opposition to the motion for
summary judgment was due on November 23, 2011, however, meaning that discovery
responses were not even due prior to the deadline for the opposition. Shin provides no
satisfactory excuse for this lack of diligence. Accordingly, we find no abuse of
discretion.
DISPOSITION
The judgment is affirmed.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.

BOREN, P.J.
We concur:

ASHMANN-GERST, J. CHAVEZ, J.

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