ALIDA MAZARIEGOS VS VANGUARD CLEANING SYSTEMS, INC

Plaintiffs filed an amended complaint. On December 12, 2023, the court heard argument on defendants’ motion to compel arbitration and continued the hearing because defendants had brought up a new issue, delegation, and a new argument based upon a case, Chin v. Advanced Fresh Concepts Franchise Corp. (2011) 194 Cal.App.4th 704, in reply, and plaintiffs needed an opportunity to respond. On January 16, 2024, after further briefing and argument, the court found that the issue of arbitrability was delegated to the arbitrator and ordered those class representatives who had arbitrations clauses in their franchise agreements to arbitration.

Thereafter, the parties engaged in arbitration and then plaintiffs renewed their motion for class certification on the third amended complaint.

May 26, 2026 Law and Motion Calendar PAGE 3 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________ On September 23, 2025, this court granted in part and denied in part plaintiffs’ Third Renewed Motion for Class Certification (Class Cert Order). The court certified the following class:

All individuals who: (a) signed a Franchise Agreement with a "Defendant" (Vanguard Cleaning Systems, Inc.; RR Franchising, Inc.; and Buddha Capital Corp) that established a unit franchise ("Franchise") and did not include an arbitration agreement; and (b) performed cleaning services in California during the "Class Period" (the period beginning April 6, 2016 through the date of trial) for "Vanguard" cleaning accounts serviced by the Franchise established by the Franchise Agreement signed by the same person; (c) BUT EXCLUDING: i. Individuals who signed any Franchise Agreement with a Defendant that included an arbitration agreement; and ii. Individuals who signed a Dispute Resolution Agreement entered into with Vanguard Cleaning Systems, Inc.;

(Class Cert Order filed Sept. 23, 2025 at pp. 3-4.)

As part of the order, the court directed class counsel to distribute a court-approved Questionnaire to the class which asked, among other questions, whether the class member personally performed cleaning services during the class period. (Class Cert Order at pp. 17-18.) The parties agree that in order for a class member to prevail, the class member, not one of its employees, had to personally perform cleaning services. The court ordered questionnaires based upon defendants’ argument that they could not ascertain which of the putative class members actually personally performed cleaning services unless the putative class members provided this information.

The court relied upon the analysis and procedure used in Estrada v. FedEx Ground Package System, Inc. (2007) 154 Cal.App.4th 1 (Estrada III). The parties disagreed on what should happen if a putative class member did not return a questionnaire or if the responses demonstrated that they were not part of the class. The court stated in its Class Cert Order, “Class Members who do not return a questionnaire will not be dismissed automatically, although failure to submit the questionnaire may potentially lead to their exclusion from the case via a future noticed motion; Defendants may revisit their status in the future.” (Class Cert Order at 17.)

Class Counsel distributed the Questionnaire on October 10, 2025, via mail, e-mail and text message, sent a reminder postcard on November 4, 2025, and sent another postcard around February of 2026. In the approximately 7 months since the Questionnaire was sent, 83 or 93 of 235 (there is dispute between the parties on the number of responses, but the exact number is not relevant for the purposes of this analysis) class members have responded.

On April 17, 2026, plaintiffs filed a motion for summary adjudication, which is set for hearing on October 20, 2026. In their motion, plaintiffs seek an order holding that defendants cannot satisfy Prong B of the ABC Test and that the business-to-business exception of the ABC Test does not apply, and they argue that they are entitled to summary adjudication as to this affirmative defense.

May 26, 2026 Law and Motion Calendar PAGE 4 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________ The court finds that in following Estrada v. RPS, Inc. (2005) 125 Cal.App.4th 976, 980 and Estrada III, supra, 154 Cal.App.4th 1, and consistent with this court’s Class Cert Order, it is to provide class members with another opportunity to submit a questionnaire and to revise the class definition to exclude class members who do not return a questionnaire that affirms that they performed cleaning services during the Class Period.

If the court resolves plaintiffs’ upcoming motion for summary adjudication without mandating responses to the Questionnaires, defendants will be unduly prejudiced because it will foreclose them from asserting an affirmative defense against individuals to whom that defense may have applied, i.e., individuals who did not actually perform cleaning services in the relevant time frame. For this reason, the court rejects plaintiffs’ suggestion that the court wait to compel Questionnaire responses until monetary relief is awarded.

The court finds Healy v. Milliman, Inc. (9th Cir. Jan. 9, 2026) 164 F.4th 701, 704-706 (Healy) instructive. In Healy, the district court granted the defendant’s motion for partial summary judgment, finding that the plaintiff “had to present ‘at least some direct evidence of concrete injury on a class-wide basis at summary judgment in a suit for money damages.” (Healy, supra, at p. 705.) The Ninth Circuit agreed, finding the following in determining what was sufficient for a plaintiff to show to defeat summary judgment:

We conclude that TransUnion also compels unnamed class members to demonstrate evidence of standing here— after class certification but prior to trial at summary judgment. This follows directly from TransUnion's instruction that plaintiffs “must demonstrate standing ‘with the manner and degree of evidence required at the successive stages of the litigation.’ ” Id. at 431, 141 S.Ct. 2190 (quoting Lujan, 504 U.S. at 561, 112 S.Ct. 2130). Drawing from our typical summary judgment standard, though unnamed class members “need not establish that they in fact have standing,” they would at least have to demonstrate “that there is a genuine question of material fact as to the standing elements.”

Cent. Delta Water Agency v. United States, 306 F.3d 938, 947 (9th Cir. 2002). This approach is consistent with TransUnion's express clarification that its holding did not “address the distinct question whether every class member must demonstrate standing before a court certifies a class,” in contrast to the post-certification summary judgment stage at issue here. 594 U.S. at 431 n.4, 141 S.Ct. 2190.

(Healy, supra, 164 F.4th at p. 708.) Here, plaintiffs’ summary judgment motion seeks a court order, which will be binding on a class wide-basis, without a showing that the entire class is in a similar position as the class representatives. While the legal issue to be decided may be a narrow one (the court has not reviewed the summary judgment motion), the impact of the ruling is substantial as it would apply to all class members.

The court rejects plaintiffs’ suggestion that the court wait until after a damage phase to determine the scope of the class. There are ascertainability and manageability issues with this approach. If the class includes the at the minimum four franchisees who did not personally perform services (see plaintiffs’ opposition filed on May 5, 2026 at p. 2 [stating that 77 out of 81 responses “profess” to have personally performed cleaning services]), defendants will have to continue to assert arguments regarding these franchisees, which will take up time. Plaintiffs began this

May 26, 2026 Law and Motion Calendar PAGE 5 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________ complaint with a broad definition of the class. During the course of this litigation, substantial time was spent on determining the issue of whether those franchisees with arbitration agreement would be part of the class in this case. Based upon the litigation to date, the court foresees substantial time on the issues of what discovery should be done and dispositive motions to ascertain a group that the parties agree are not part of the class because they did not personally perform cleaning services.

Plaintiffs argue that defendants should have kept better records and cannot now use the lack of information to narrow the class. While Labor Code section 1174 requires employers to keep records showing hours worked and wages paid, the group that defendants seek to identify are not employees but independent contractors. The primary purpose of Labor Code section 1174 is to determine damages when defendant has not kept good records. (Amaral v. Cintas Corp. No. 2 (2008) 163 Cal.App.4th 1157, 1189, disapproved of on other grounds by Cohen v.

Superior Court (2024) 102 Cal.App.5th 706, rev. granted (Sept. 18, 2024).) [“One long-standing application of burden-shifting occurs in the wage-and-hour context when an employer's compensation records are so incomplete or inaccurate that an employee cannot prove his or her damages.”] Amaral discusses and affirms the principle that “Where essential facts necessary to proof lie within the exclusive knowledge or control of one party, ‘fundamental fairness’ is what justifies shifting the burden of proof to this party.” (Id. at p. 1090.)

There is not one great solvent for all cases, but an analysis of policy and fairness. (Id. at pp. 1090-1091.) Thus, in Amaral, the court found burden shifting appropriate because the defendant contractor had control over the workflow and greater knowledge about its obligations under the living wage ordinance at issues. (Id. at p. 1191,) Here in contrast, Defendants do not have knowledge regarding how the franchisees assign the work.

Following the approach of the court in the Estrada litigation, the court revises the class definition to add the following language: “and who complete and returned a signed Questionnaire that affirms that they performed cleaning services during the Class Period.” Further, the court orders class notice to all class members who have not returned questionnaires with language that provides the following information with the current class definition and adds that the court has revised the class definition to add the following language “and who complete and returned a signed Questionnaire that affirms that they performed cleaning services during the Class Period.”

The notice should also state that to date their questionnaire has not been received and the court is providing one last opportunity to provide return a questionnaire. The deadline to return the questionnaire is [thirty days after it is sent]. The parties are to meet-and-confer regarding the language and submit agreed upon language or their own suggestions in the proposed order. The notice shall be sent out within two weeks of notice of entry of order.

The court further notes that class counsel have made substantial efforts to locate all class members, including address tracing. Since they were unsuccessful now in locating these class members, it is unlikely that they would be any more successful after a trial to locate them, which raises another manageability issues.

The court also confirms the briefing schedules for the upcoming motions:

May 26, 2026 Law and Motion Calendar PAGE 6 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________ Plaintiffs’ summary judgment has been filed and the hearing has been continued and will be heard on October 20, 2026 at 2:00 p.m. in Department 4. The clerk is to vacate the July 28, 2026 hearing date. Opposition is to be filed and served on September 15, 2026 and the reply is to be filed and served on October 6, 2026. Plaintiffs shall deliver a binder to Department 4 with all pleadings within two court days of the filing of the reply.

The hearing on Defendants’ motion for summary judgment and decertification is now set for hearing on December 29, 2026 at 2:00 p.m. in Department 4. The court shall vacate the hearing date of September 8, 2026. Defendants’ moving papers are to be filed and served on October 6, 2026, opposition filed and served on December 4, 2026; and reply papers filed and served on December 15, 2026. Defendants shall deliver a binder to Department 4 with all pleadings within two court days of the filing of the reply. The parties shall confirm that these deadlines comply with Code of Civil Procedure section 473c. If they do not, the parties shall stipulate to modify the statutory requirements or adjust the moving and opposition dates accordingly. The court needs the reply brief filed and served by December 15, 2026.

If the tentative ruling is uncontested, it shall become the order of the court. Thereafter, counsel for defendants shall prepare a written order consistent with the court’s ruling for the court’s signature, pursuant to California Rules of Court, rule 3.1312, and provide written notice of the ruling to all parties who have appeared in the action, as required by law and the California Rules of Court.