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Parada v. MJ's Labor Services, Inc.

United States District Court, D. Oregon, Pendleton Division

August 30, 2019

RONALDO SERPAS PARADA, personal representative of the estate of RODOLFO PEREZ SERPAS, Plaintiff,
v.
MJ'S LABOR SERVICES, INC., a domestic corporation; JAMES MAGOTEAUX; and JANI MAGOTEAUX, Defendants.

          OPINION AND ORDER

          PATRICIA SULLIVAN, UNITED STATES MAGISTRATE JUDGE

         This action concerns conditions at MJ's Motel in Boardman, Oregon, where former plaintiff Rodolfo Perez Serpas stayed in 2016. Following Perez Serpas' death in March 2018, plaintiff Ronaldo Serpas Parada was appointed his personal representative and was substituted as plaintiff in this matter. (Docket Nos. 77, 79). Perez Serpas stayed at MJ's Motel while working for defendant MJ's Labor Services, Inc. (“MJ's Labor”), a labor and contracting service. Defendants James and Jani Magoteaux (the “Magoteaux defendants”) own both MJ's Motel and MJ's Labor. Perez Serpas experienced a bed bug infestation in his room at MJ's Motel.

         Defendants have moved for summary judgment, which plaintiff opposes. (Docket Nos. 29, 41). The Court heard oral argument on May 21, 2019 (Docket Nos. 82, 84, 85), and ordered supplemental briefing (Docket Nos. 86-88, 91, 92).

         For the following reasons, the Court GRANTS, IN PART, AND DENIES, IN PART, defendants' Motion for Summary Judgment.

         FACTUAL BACKGROUND

         Former plaintiff Perez Serpas was a migrant farmworker who temporarily lived and worked in Oregon for several years. Del Carlo Decl. ¶ 2, Ex. A, Hereford 30(b)(6) Dep. 13:6-20 (Docket No. 51). During the 2016 season, Perez Serpas worked for MJ's Labor. Id.; James Magoteaux Decl. ¶¶ 6 & 7 (Docket No. 31); Del Carlo Decl. ¶ 11, Ex. J, 397 (Docket No. 46).

         A. Defendants' Business

         The Magoteaux defendants are a married couple who own MJ's Labor as a closely-held corporation. Hereford Dep. 14:6-8, 16-19; Magoteaux Decl. ¶ 2. Jani Magoteaux and James Magoteaux own 60% and 40% of the shares of MJ's Labor, respectively. Del Carlo Decl. ¶ 10, Ex. I, 265-272 (Docket No. 45). All of MJ's Labor's employees are agricultural workers, except their administrative employees. Hereford Dep. 17:1-5; Del Carlo Decl. ¶ 9, Ex. H, Perez Serpas Dep. 9:8-24 (Docket No. 50). MJ's Labor employs approximately 600 workers during its peak season, August to October, and 200 workers in the off season. Hereford Dep. 17:25-18:15.

         MJ's Labor is registered with the U.S. Department of Labor and the Oregon Bureau of Labor and Industries as a farm labor contractor. Del Carlo Decl., Ex. I, 265-278. Jani Magoteaux is licensed with the state as a farm labor contractor. Del Carlo Decl. ¶ 14, Ex. Q; Ex. I, 137, 221-33, 273-278. James Magoteaux is licensed by the federal government as a farm labor contractor. Del Carlo Decl. ¶ 3, Ex. B, James Magoteaux Dep. 19:9-12 (Docket No. 50).

         Plaintiff argues that defendants use the name “MJ's Motel” to describe the part of MJ's Labor's business that provides housing to its workers. The name “MJ's Motel” appears not to have been registered as a business entity with the state of Oregon prior to commencement of this action. Bradley Decl. ¶ 5, Ex. O (Docket No. 43-1). Plaintiff argues that there is a “tight nexus” between MJ's Labor, the Magoteauxs, and MJ's Hotel. In applications to the U.S. Department of Labor to register as a farm labor contractor, MJ's Labor represented for multiple years that it owned or controlled a migrant housing facility. Del Carlo Decl., Ex. I, 84, 101, 222, 265-72. It submitted documents to the department stating that it is a “housing provider” at a location “commonly known as MJ's Motel.” Id., 88, 106, 226, 269. The department's farm labor contractor database shows that MJ's Labor was granted worker housing authorization. Bradley Decl. ¶ 2, Ex. L (Docket No. 43-1). Many of MJ's Motel's occupants are MJ's Labor employees. Del Carlo Decl., Ex. J, 405. MJ's Motel's manager is Yeni Gordillo, whom MJ's Labor pays and provides benefits, and whose husband works for MJ's Labor. Hereford Dep. 22:8-24, 33:22-24, 60:25-61:4. Brent Hereford, MJ's Labor's business manager, performs most of MJ's Motel's clerical and administrative work. Id. 63:4-14. Hereford completed and filed documents to register “MJ's Motel, Inc.” with the state of Oregon as a business corporation in June 2017, after this action commenced. Id. 53:18-54:1. Other MJ's Labor staff, including Iris Chavez, regularly operate MJ's Motel. Id. 44:25-47; Del Carlo Decl. ¶ 7, Ex. F, Chavez Dep. 9:11-22, 22:2-25:2 (Docket No. 45). MJ's Labor runs vans for its workers, which stop at MJ's Motel daily to provide transportation to and from work sites. Hereford Dep. 25:4-6; Del Carlo Decl. ¶ 6, Ex. E, Izquierdo Dep. 46:1-9 (Docket No. 45). MJ's Labor has an office at MJ's Motel where its employees can pick up paychecks. Hereford Dep. 27:17-28:15. MJ's Labor, under its prior name, “MJ's Labor Contractors, ” signed the leases of the building and land where MJ's Motel is located. Del Carlo Decl. Ex. J, 144, 260, 279.

         Plaintiff points to other distinct aspects of MJ's Motel, arguing that it does not operate on a regular commercial basis as a regular commercial motel. It does not have a vacancy sign, does not take reservations, assigns roommate lodgers who are strangers on a space-available basis, does not have a website or advertising other than a phone book listing, has no way of indicating from the street whether a room is available, accepts only cash payments, does not supply towels, and pays no salary to anyone. Izquierdo Dep. 23:21-23, 28:6-7, 38:8-10, 38:8-19, 44:10-20, 46:1-9; Hereford Dep. 22:4-24; Magoteaux Dep. 28:6-7. MJ's Motel has run at a loss of approximately $18, 000 the past two years, although defendants' various businesses, considered together, are profitable. Hereford Dep. 58:1-4, 59:8-10, 60:17-19; Del Carlo Decl. Ex. J, 155-169, 182; Magoteaux Dep. 30:7-18.

         Defendants characterize MJ's Motel as an assumed business name for a partnership the Magoteauxs use to operate a motel business separate from MJ's Labor. Magoteaux Decl. ¶ 2. Defendants contend that they operate MJ's Motel as a budget motel for those who cannot afford other accommodations. Id. ¶ 4. It is licensed by Umatilla County as a tourist accommodation and is certified by the County Health Department. Id. ¶ 13, Ex. 4 (Docket No. 31-4). Rooms are cleaned daily and fresh sheets are given upon a patron's initial arrival. Magoteaux Decl. ¶ 4. MJ's Motel is open to the public, and customers include referrals from local churches, migrant agricultural workers, and temporary construction workers. Id. ¶ 3. Agricultural workers pay the same rates and have the same room types as the general public. Id. MJ's Labor states that it does not provide housing for employees. Id. ¶ 14, Ex. 5 (Docket No. 31-5). MJ's Labor does not have any ownership interest in MJ's Motel, and they are separate and operate independently. Magoteaux Decl. ¶ 5.

         B. Perez Serpas and MJ's Motel

         In March 2016, Perez Serpas arrived in Oregon from California and began working for MJ's Labor. Perez Serpas need a place to stay, and Don Luis, an MJ's Labor supervisor, directed him to MJ's Motel. Perez Serpas Dep. 14:9-21; 17:10-25, 18:3-4. Perez Serpas rented a room at MJ's Motel, paying $40.00 per week, the standard rate. Del Carlo Decl. Ex. J, 397; Magoteaux Decl. ¶ 7; Perez Serpas Dep. 30:6-10. MJ's Labor's vans transported Perez Serpas between MJ's Motel and work. Id. 41:1-4, 48:1-4.

         When Perez Serpas checked into MJ's Motel in April 2016, Gordillo placed him room 10, but at the end of May 2016, Gordillo moved him to room 14. Izquierdo Dep. 10:3-5; Del Carlo Ex. I, 80. In room 14, Perez Serpas immediately began suffering bed bug bites. Perez Serpas Dep. 15:1-23, 33:1-8, 34:5-8, 80:9-14. He complained about the bed bugs to Gordillo and her husband on a weekly basis, but when he asked them to move him to another room, they refused. Id. 15:8-16, 34:5-16, 72:4-20. Gordillo reported Perez Serpas' complaints to James Magoteaux. Izquierdo Dep. 13:10-19. Perez Serpas filed complaints with MJ's Labor to Norma Silva and Iris Chavez, who told James Magoteaux. Perez Serpas Dep. 68:2-15; Chavez Dep. 19:1-25; Del Carlo Decl. Ex. I, 80, 81. Defendants did not change Perez Serpas' room, offer to help him find other quarters, change his bed, or refund his money; instead they told Perez Serpas he had to stay in the room, sleep in the bed, and cope with the infestation, despite other rooms being available on multiple occasions. Hereford Dep. 55:16-56:5, 57:17-25; Izquierdo Dep. 15:6-16, 50:15-20, 49:21-50:3; Del Carlo. Ex. J, 372-389, 416; Del Carlo Decl. ¶ 13, Ex. P (Docket No. 48). Defendants had sprayed the whole Motel for bed bugs in 2014, and room 14 specifically multiple times in 2015 and 2016. Del Carlo. Ex. J, 229, 289-298 & Ex. I, 82; Chavez Dep. 23:9-12.

         After Perez Serpas complained of the bed bugs, defendants hired Rose Hart Pest Control to treat the room, which it did three times, each treatment consisting of three separate pesticide applications. Magoteaux Decl. ¶ 8. The spraying, however, did not resolve the infestation. Perez Serpas Dep. 58:13, 68:24-69:1, 79:2-80:4, 81:11-17. Instead, Perez Serpas lived with the bed bugs for months, experiencing great physical pain and distress, including itching, anxiety, the sensation of insects crawling on his skin, humiliation, and insomnia. Id. Some of the bug bites became infected, but because of his shame over the affliction, he did not seek medical treatment. Id. Perez Serpas and his roommate began sleeping on the floor to avoid the infested mattresses, where they could see bed bugs and eggs. Id. 61:2-21. Gordillo performed a perfunctory clean-up of room 14, and also left Perez Serpas a broom to clean it himself. Id.

         Defendants argue that the repeated failure of treatments to clear the bed bugs indicated that Perez Serpas himself was the source of the infestation, and so he needed to vacate the room. Magoteaux Decl. ¶ 9. In October 2016, defendant James Magoteaux gave Perez Serpas an eviction notice, implying that he may have been the source of the bugs, stating that they needed to treat the room, and saying that they did not want bed bugs to spread. Perez Serpas Dep. 34:13-16, 68:2-19, 73:17-29, 86:9-16; Del Carlo Decl. ¶ 12, Ex. K (Docket No. 47); Magoteaux Decl. ¶ 10. Initially, Perez Serpas was unable to find other housing because of a shortage of low-cost housing, and friends' refusals to allow him to stay with them due to fear of bed bugs. Perez Serpas Dep. 31:18-23, 56:9-13, 59:9-13, 66:13-17, 73:1-7. After defendants gave Perez Serpas a second eviction notice, he found himself with nowhere to go and unable to tolerate MJ's Motel's conditions, so he slept in his car for two weeks. Id. 16:4-5, 22:9-12, 80:24-81-2.

         PROCEDURAL BACKGROUND

         Defendants file their Motion for Summary Judgment against plaintiff's claims.

         Plaintiff's First Amended Complaint (Docket No. 9) brings five claims for relief:

         1) Violations of the Migrant Seasonal Agricultural Worker Protection Act (“AWPA”), 29 U.S.C. §§ 1801-1872;

         2) Violations of the Oregon Unlawful Trade Practices Act (“UTPA”), Or. Rev. Stat. § 646.608(1), for misrepresenting and falsely advertising the nature of MJ's Motel, disparaging Perez Serpas through the eviction notice, and failing to disclose known defects and noncompliance with the Oregon Travelers' Accommodation rules;

         3) Negligence;

         4) Transacting business as unregistered assumed business name, id. § 648.135(2); and

         5) Violations of the Oregon Contractor Registration Act (“OCRA”), id. § 658.440.[1]

         LEGAL STANDARD

         Summary judgment is appropriate when there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56(a). The burden is on the moving party to point out the absence of any genuine issue of material fact; once the initial burden is satisfied, the burden shifts to the opponent to demonstrate through the production of probative evidence that there remains an issue of fact to be tried. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). In opposing summary judgment, a party may not rely on mere allegations or denials in pleadings, but must set forth specific facts supported by competent evidence. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Far Out Prods., Inc. v. Oskar, 247 F.3d 986, 997 (9th Cir. 2001). On a motion for summary judgment, the evidence is viewed in the light most favorable to the nonmoving party. Robi v. Reed, 173 F.3d 736, 739 (9th Cir. 1999). “A fact issue is genuine if the evidence is such that a reasonable [fact finder] could return a verdict for the nonmoving party.” Villiarimo v. Aloha Island Air, Inc., 281 F.3d 1054, 1061 (9th Cir. 2002) (quotation omitted). “The non-moving party has failed to meet its burden if the record taken as a whole could not lead a rational trier of fact to find for the non-moving party.” Intel Corp. v. Hartford Accident & Indem. Co., 952 F.2d 1551, 1558 (9th Cir. 1991) (quotation omitted). The substantive law governing a claim ...


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