# Paychex Advance LLC v. Deploy HR, Inc.

> District Court, N.D. California · December 2, 2022

URL: https://www.frixlaw.com/law-library/cases/10073699

## Case

- **Court:** District Court, N.D. California
- **Decided:** December 2, 2022
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

1
2
3
4 UNITED STATES DISTRICT COURT
5 NORTHERN DISTRICT OF CALIFORNIA
6
7 PAYCHEX ADVANCE LLC, Case No. 21-cv-04685-WHO

8 Plaintiff,
ORDER ON MOTION FOR SUMMARY
9 v. JUDGMENT

10 DEPLOY HR, INC., Re: Dkt. No. 72
Defendant.
11

12 Plaintiff Paychex Advance LLC moves for full or partial summary judgment on its claims
13 against defendant Deploy HR, Inc. Dkt. No. 72. The dispute between these two parties is whether
14 Deploy is required to pay Paychex amounts that Deploy would otherwise be required to pay to
15 third-party PEI Staffing, LLC based on staffing services that PEI provided to Deploy. For the
16 reasons explained below, Paychex’s motion is GRANTED in limited part and otherwise DENIED.
17 BACKGROUND
18 I. THE SSA BETWEEN PEI AND DEPLOY
19 It is undisputed that PEI provided staffing services to Deploy under a Subcontractor
20 Supplier Agreement (“SSA”) beginning in May or June 2017, when Deploy employees were
21 transferred to PEI’s payroll. The SSA and a related Management Services Agreement (MSA)
22 were not signed by both PEI and Deploy until August 24, 2017, following the death of a worker
23 (Miguel Almonte Garcia) who PEI provided to a warehouse on behalf of Deploy.
24 On that date, after Deploy notified PEI of Garcia’s death, Deploy’s CFO Jeff Mitchell
25 forwarded the SSA and MSA to PEI’s CEO with instructions to “fully execute” the agreements
26 and to date them “7/1/17.” Declaration of Jeremy Bilsky, Ex. 2 [Dkt. No. 72-1]. The SSA and
27 MSA were signed on the same day and dated “effective” as of July 1, 2017, allegedly to cover the
1 Epstein [Dkt. No. 78-5] at 40-41; Deposition Transcript of Jeff Mitchell [Dkt. No. 78-3] at 88:10-
2 19. The SSA provided:
3 13. INSURANCE.
4 A. Requirement. During the term of this Agreement such additional periods of
5 time required under this section, Subcontract Supplier will maintain in full force
6 and effect, at Subcontract Supplier’s own expense, insurance coverage as specified
7 in this section. All insurance policies will be written by a company authorized to do
8 business in the territory and jurisdiction where the Services are performed….
9 B. …
10 C. General Liability…Insurance will be provided with limits of liability and
11 coverage as indicated below.
12 …
13 7) General Liability… policy limits will not be less than a combined Single
14 Limit for Bodily Injury… of $2,500,000 per occurrence; …and $5,000,000
15 general aggregate….
16 D. Additional Insureds. Any General Liability…policy…will name Client
17 [WCD] and Company [Deploy]…as additional insureds, and will stipulate that the
18 insurance afforded additional insureds will apply as primary insurance and that no
19 other insurance carried by any of them will be called on to contribute to the loss
20 covered thereunder…
21 …
22 J. Certificates of Insurance. On request Subcontract Supplier shall provide
23 Company a Certificate of Insurance evidencing the required coverage and limits
24 and named Client and Company as additional insureds….
25 K. Availability of Insurance Does Not Relieve Subcontract Supplier of Its
26 Obligations. In no event will the coverage or limits of any insurance maintained by
27 Subcontract Supplier under this Agreement, or the lack or unavailability of any
1 liability to Company and client under this Agreement.
2 SSA, Dkt. No. 72-1 [ECF pg. nos. 29-89].
3 Paragraph 14 of the SSA also provides that PEI agreed to:

4 to indemnify, defend and hold harmless Company and Client and as
to each of them their parents, subsidiaries, affiliates and the respective
5 directors, officers, employees and agents of each ("the Released
Parties") from and against all third party demands, claims, actions,
6 suits, losses, damages (including, but not limited to, property damage,
bodily injury and wrongful death), judgments, costs and expenses
7 (including reasonable attorneys' fees, interest and penalties) (
collectively, "Damages") imposed on or incurred by the Released
8 Parties arising out of the acts or omissions of Subcontract Supplier or
its employees, subcontractors or agents in the performance of this
9 Agreement.
10 Deploy and PEI representatives testified in either this or a related case that PEI and Deploy
11 were operating under the terms of the SSA in May and June 2017, even though the SSA was not
12 signed until August 2017. Epstein Depo. Tr. at 70-71; Mitchell Depo. Tr. at 71-72, 88, 103-104.
13 PEI’s CEO, Epstein, testified that since the details of the SSA were still being worked out as
14 performance commenced, he added Deploy to PEI’s workers compensation and general liability
15 policies in May 2017 as an “additional insured.” Epstein Depo. Tr. 110. In July 2017, Epstein
16 sent what he characterized as a draft “mocked up” certificate of insurance to Deploy, outlining the
17 contemplated insurance coverage so that (according to Epstein) the parties could review the limits
18 and determine whether any additional or different insurance was required. Epstein Depo. Tr. at
19 46-57. Deploy contends that Epstein intentionally misled it by sending that email and certificate –
20 which was not clearly marked as a draft – to convey that specific coverage had been secured for
21 Deploy by PEI when it had not been secured. Mitchell Depo. Tr. at 79:18-23; Deposition
22 Transcript of Robert Samet [Dkt. No. 78-7] at 9:19-10:15; see also Epstein Depo. Tr. 110-114.
23 II. THE FSA BETWEEN PEI AND PAYCHEX’S PREDECESSOR
24 Paychex argues that it is entitled to payments amounting to $1,088,615.00 – covering
25 identified invoices for staffing provided by PEI to Deploy – as a result of a 2011 Factoring and
26 Services Agreement (FSA) that Paychex’s predecessor (Advance Payroll Funding) entered into
27 with PEI. Bilsky Decl., Ex. 1 FSA [Dkt. No. 72-1]. Under the FSA, Advance provided funds to
1 Advance a “continuing first priority security interest” in payments due to PEI for its staffing
2 services. Deposition Transcript of Jeremy Bilsky [Dkt. No. 72-2] at 29:9-21; Epstein Depo. Tr. at
3 169:1-22. Paychex “purchased” Advance’s assets, including the FSA with PEI, in 2015. Bilsky
4 Depo. Tr. at 11:2-7; 25:16-26:15; see also Supplemental Declaration of Jeremy Bilsky [Dkt. No.
5 79-1] ¶ 3 & Ex. 1 (FSA).
6 Some of the PEI invoices from the relevant time period in 2017 were paid directly by
7 Deploy to Paychex and some were paid by Deploy to PEI, depending on whether the invoices
8 sought payment for wages and employer taxes or workers compensation and administrative fees.
9 Epstein Depo. Tr. at 150:2-152:18; 157:2-160:2. Payments on PEI invoices for processed payroll
10 were sent by Deploy to Paychex until July 2019. It is undisputed that Deploy did not pay in full
11 seven PEI invoices totaling approximately $1,021,730.97. Deposition Transcript of Cheryl
12 Hughes [Dkt. No. 72-2] at 54:1-8. PEI has, however, made periodic payments to Paychex in the
13 interim, bringing the current balance owed to $769,689.00. Bilsky Decl., Ex. 4.
14 III. RELATED LITIGATION
15 Following the death of Garcia in August 2017, his estate filed a wrongful death claim in
16 Pennsylvania state court in 2019 (“Garcia” action). That action is pending. PEI has moved for
17 summary judgment, arguing that although it was Garcia’s employer at the time of his death, it is
18 immune from tort liability under Pennsylvania’s workers’ compensation scheme. Request for
19 Judicial Notice [RJN, Dkt. No. 73], Ex. 2. Deploy is a named defendant in the Garcia matter,
20 funding its own representation.
21 In June 2019, PEI’s insurer filed a declaratory relief action in Maryland state court, seeking
22 a determination that it had no duty to provide coverage to Deploy (or the warehouse where Garcia
23 died) in the Garcia matter. RJN, Ex. 4. The insurer secured summary judgment in its favor: the
24 Maryland court determined that because neither the SSA nor the MSA were signed until after
25 Garcia’s death, and because PEI’s policy provided that an “additional insured” could be added
26 only where “required by a written contract executed prior” to an occurrence under the policy, the
27 insurer had no duty to defend or indemnify Deploy or the warehouse in the Garcia action. RJN.
IV. PROCEDURAL HISTORY
1
In the operative complaint, Paychex alleges the following causes of action against Deploy:
2
(i) Open Account; (ii) Services Rendered; (iii) Account Stated; and (iv) Breach of Contract.
3
Second Amended Complaint, Dkt. No. 37. In response, Deploy filed a Third Party Complaint,
4
asserting cross-claims against third-party PEI (and its two principals) for: (i) Breach of Contract,
5
against PEI; (ii) Express Contractual Indemnity, against PEI; (iii) intentional misrepresentation
6
and deceit, against PEI and the individuals associated with PEI; (iv) violation of Racketeer
7
Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §1962(c), against PEI and the
8
individuals; and (v) conspiracy to violate RICO, 18 U.S.C. § 1962(d), against PEI and the
9
individuals. Dkt. No. 41. The intentional misrepresentation and RICO claims are based on
10
Deploy’s theory that on July 31 2017, Epstein emailed Deploy a fraudulent certificate of insurance
11
to convey to Deploy that specific insurance was put in place by PEI when it had not.
12
Deploy opposes full or partial summary judgment, arguing that disputes of material fact
13
preclude full or partial summary judgment because: (i) Paychex has failed to establish with
14
admissible evidence that it is a “secured” party or assignee of PEI’s receivables from Deploy and
15
(ii) Deploy is due an offset from PEI because, contrary to the SSA, PEI never added Deploy as an
16
insured to its policies, forcing Deploy to defend itself in Garcia wrongful death matter as well as
17
in the Maryland insurance coverage dispute. Accordingly, Deploy is allowed to offset any
18
amounts otherwise due under the FSA for those expenses.
19
LEGAL STANDARD
20
Summary judgment on a claim or defense is appropriate “if the movant shows
21
that there is no genuine dispute as to any material fact and the movant is entitled to
22
judgment as a matter of law.” Fed. R. Civ. P. 56(a). To prevail, a party moving for summary
23
judgment must show the absence of a genuine issue of material fact with respect to an essential
24
element of the non-moving party’s claim, or to a defense on which the non-moving party will bear
25
the burden of persuasion at trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once
26
the movant has made this showing, the burden then shifts to the party opposing summary
27
judgment to identify “specific facts showing there is a genuine issue for trial.” Id. The party
1 opposing summary judgment must then present affirmative evidence from which a jury could
2 return a verdict in that party’s favor. Anderson v. Liberty Lobby, 477 U.S. 242, 257 (1986).
3 On summary judgment, the court draws all reasonable factual inferences in favor of the
4 non-movant. Id. at 255. In deciding a motion for summary judgment, “[c]redibility
5 determinations, the weighing of the evidence, and the drawing of legitimate inferences from the
6 facts are jury functions, not those of a judge.” Id. However, conclusory and speculative testimony
7 does not raise genuine issues of fact and is insufficient to defeat summary judgment. See
8 Thornhill Publ’g Co., Inc. v. GTE Corp., 594 F.2d 730, 738 (9th Cir. 1979).
9 DISCUSSION
10 Deploy does not challenge or engage with the legal requirements of Paychex’s “common
11 count” claims. Instead, it argues that Paychex has not demonstrated that it is a secured creditor
12 under the FSA. Even if it is, Deploy asserts that it is entitled to offset any amounts due to PEI
13 (and hence Paychex) because of Deploy’s cross-claims against PEI.
14 I. PAYCHEX’S RIGHTS UNDER THE FSA
15 Deploy contends that material facts are in dispute because: (i) Paychex did not produce
16 with its motion the contract between it and its predecessor (Advance), or other admissible proof
17 that Paychex bought or secured the rights to the FSA; (ii) Paychex failed to provide Deploy with
18 the required written “notice of assignment” of the FSA receivables. Neither argument has merit.
19 Paychex has provided sufficient, admissible evidence that it purchased the rights to the
20 FSA through an Asset Purchase Agreement (APA) it executed with Advance. Supp. Bilsky Decl.,
21 Ex. 1 & Schedule 3.10 (identifying FSA between PEI and Deploy). While Deploy is correct that
22 Paychex did not attach the APA to its opening motion, excerpts from the APA were produced in
23 discovery and Paychex attaches relevant excerpts of the APA with its Reply. Supp. Bilsky Decl.,
24 Ex. 1. Although Deploy contends that the APA was hard to secure from Paychex in discovery and
25 complains that only excerpts of the APA were provided, Deploy does not point to any evidence
26 demonstrating that the APA did not cover the FSA that Advance entered into with PEI or that the
27
1 FSA did not cover the monies owed to PEI under the SSA.1 The unrebutted evidence is that
2 Paychex secured rights to the FSA through the APA and is a secured creditor with respect to
3 monies owed to PEI under the SSA. Deploy’s best evidence and related admissibility objections
4 to the evidence regarding the APA are OVERRULED.
5 Deploy also agues that even if Paychex acquired creditor status through the FSA,
6 Paychex’s failure to provide notice to Deploy that it was a secured creditor under section 9406(b)
7 of the California Commercial Code means that Paychex has no rights to the monies Deploy holds
8 for work performed by PEI. Deploy contends that it received no notice of Paychex’s asserted
9 rights as a creditor until this litigation. It relies on the deposition testimony of Mitchell, who
10 testified that “he did not recall” receiving and does not know whether anyone at Deploy received
11 formal notice regarding the FSA obligations from Advance or Paychex. Oppo. at 10; Mitchell
12 Depo. Tr. at 120-122, 125-126. But Mitchell testified that he knew Advance was a “lender” used
13 by PEI to cover payroll and admitted that Deploy would pay some portion of invoices to
14 Advance/Paychex directly when requested to do so by PEI. Mitchel Depo. Tr. at 122, 129-131,
15 135.
16 At base, notice is a non-issue. Section 9406 addresses when a debtor is required to
17 discharge an obligation by paying an assignee instead of the assignor upon notice of assignee’s
18 rights. Paychex is not arguing that Deploy should have sent payments on specific invoices to
19 Paychex when it instead sent them to PEI. Rather, Paychex is arguing that monies currently held
20 by Deploy for services performed by PEI should now be paid to Paychex. And even if some form
21 of notice was required, Deploy does not explain why its paying Paychex directly on invoices for
22 services provided by PEI did not constitute adequate notice while the parties were still performing
23 under the SSA or, ultimately, why the “notice” provided by this litigation and the discovery to
24 date does not suffice.
25 II. DEPLOY’S RIGHTS UNDER THE SSA
26 Deploy argues that even if Paychex can be considered a secured creditor under the FSA,
27
1 Deploy has rights to refuse to pay Paychex on account of PEI’s services given: (i) PEI’s breach of
2 the oral agreement to secure insurance coverage (a material term of the SSA, although the SSA
3 was not signed prior to the Garcia accident) and (ii) the breach of the signed SSA by PEI’s failure
4 to indemnify and defend Deploy in this, the Garcia, and the coverage litigations as required by the
5 SSA.
6 A. Breach of Contract; Insurance Coverage and Indemnity
7 Deploy argues that it has a right to offset the amounts it would otherwise owe to PEI
8 because PEI breached the SSA by failing to add Deploy as an insured to its liability policy and
9 failing to defend or indemnify Deploy in the Garcia and insurance coverage actions, as well as for
10 a related Department of Justice/Department of Transportation investigation into PEI. Deploy
11 contends that it had an oral contract encompassing the material terms of the SSA that was in effect
12 when PEI started to provide services to Deploy in May/early June 2017. It cites to the deposition
13 testimony of Epstein (PEI’s CEO) and Mitchell (Deploy’s CFO) that the essential terms of the
14 SSA had been agreed to and, as a result, PEI started to provide services to Deploy. It points to
15 evidence that the SSA was not signed until late August because of narrow disputes over profit
16 margins on the SSA. Despite those limited disagreements, the parties began performance and PEI
17 received payment from Deploy for services performed the morning of the Garcia accident, prior to
18 Garcia’s accident. Epstein Depo. Tr. at 69-77. Deploy notes that PEI’s obligation to secure
19 insurance did not hinge on the terms of any insurance policy carried or sought by PEI (for
20 example, the Philadelphia policy at issue in the insurance coverage litigation that required a
21 written and executed agreement to provide coverage prior to an occurrence). It also argues that it
22 relied to its detriment on the “false” certificate of insurance PEI sent through interstate commerce
23 to Deploy on July 31, 2017.
24 Paychex responds that the breach of contract claims, whether based on purported failure to
25 secure insurance coverage or failure to indemnify, fail because the accident occurred before the
26 SSA was signed and executed. It argues that PEI is “immune from third-party liability” for
27 indemnity claims related to Garcia’s death under California’s workers compensation scheme
1 3864.2 The only relevant written agreement here was signed after Garcia’s death. There is no
2 dispute that Garcia’s received a workers’ compensation award from PEI’s carrier. Therefore,
3 Paychex contends that the oral SSA cannot support a breach claim against PEI for PEI’s failure to
4 secure insurance coverage or indemnify stemming from damages related to the Garcia accident.
5 Paychex does not address or provide authority to explain why PEI would not still be
6 potentially liable for failure to indemnify Deploy for its expenses in litigating the insurance
7 coverage action in Maryland state court that arose after the SSA was signed and effective. The
8 insurance coverage action is related to the Garcia accident and the Garcia case; Deploy’s attempt
9 to secure coverage under PEI’s insurance policy, as well as the resulting insurance coverage
10 declaratory relief action, occurred after the SSA was signed and operative. Paychex cites no
11 authority that would stretch the worker’s compensation exclusivity provisions on which it relies
12 to bar the suits regarding other litigation between the parties over amounts allegedly owed by
13 Deploy to PEI for work under the SSA.3
14 Paychex is correct that PEI cannot recover under a breach theory based on failure to secure
15 insurance or to indemnify Deploy for the Garcia action or for the part of Deploy’s defense
16
2 Deploy argues that there is no basis for California law to apply, given the work was performed
17
in Pennsylvania. However, the SSA under which the parties were operating expressly provided
that its terms shall be governed by California law. See SSA, ¶ 30. Regardless, Pennsylvania,
18
where the accident occurred, has a similar exclusivity rule to California’s. See 77 Pa. Stat. Ann. §
481:
19
(a) The liability of an employer under this act shall be exclusive [].
(b) In the event injury or death to an employee is caused by a third party, then such
20
employee, his legal representative, husband or wife, parents, dependents, next of kin, and
anyone otherwise entitled to receive damages by reason thereof, may bring their action at
21
law against such third party, but the employer, his insurance carrier, [] shall not be liable to
a third party for damages, contribution, or indemnity in any action at law, or otherwise,
22
unless liability for such damages, contributions or indemnity shall be expressly provided
for in a written contract entered into by the party alleged to be liable prior to the date of the
23
occurrence which gave rise to the action.

24
3 On its face, section 3864 limits liability of an employer to a third party only for costs related to
judgment or settlement in a case brought by the injured party/estate or the employer regarding an
25
underlying accident that was covered by the workers compensation scheme. See Cal. Lab. Code §
3864: “Liability to reimburse or hold third person harmless on judgment or settlement . . . If an
26
action as provided in this chapter prosecuted by the employee, the employer, or both jointly
against the third person results in judgment against such third person, or settlement by such third
27
person, the employer shall have no liability to reimburse or hold such third person harmless on
1 incurred in filing and litigating its suit against PEI in this District (as Deploy’s affirmative
2 Complaint is based on alleged “damages” from Deploy’s defense of the Garcia action). See Case
3 No. 19-cv-06061-WHO Deploy HR, Inc. v. Pei Staffing, LLC. (asserting claims for breach of
4 contract for failure to secure insurance coverage and for failure to indemnify Deploy in the Garcia
5 action). But the Complaint in Case No. 19-cv-06061 also seeks damages for PEI’s failure to
6 secure insurance, causing Deploy to defend itself in the insurance coverage action. Compl. in
7 Case No. 19-cv-06061, ¶ 20. Similarly, Paychex provides no authority that the worker’s
8 compensation exclusivity provisions extinguish Deploy’s right to indemnity from PEI stemming
9 from Deploy’s defense of this action, brought by Paychex against Deploy.
10 In sum, Paychex has demonstrated that Deploy cannot withhold and is not entitled to retain
11 monies otherwise due to PEI on the theory that PEI failed to indemnify or hold Deploy harmless
12 (through insurance of otherwise) for its defense of the Garcia action. Paychex has not
13 demonstrated that Deploy is not entitled as a matter of law to withhold monies otherwise due to
14 PEI to cover Deploy’s costs incurred in defending itself against the insurance coverage action and
15 some part of Deploy’s litigation and defense of the actions pending in this court.
16 B. Collateral Estoppel – offset defense and cross-claims for breach
17 Paychex also argues that Deploy is collaterally estopped from arguing that PEI was
18 required to insure Deploy and provide a defense to the Garcia matter given the Maryland court’s
19 determination that Deploy could not be an “additional insured” under PEI’s policy. As noted
20 above, that conclusion was based on language from PEI’s policy that allowed for additional
21 insured-entities only where a written contract existed prior to an occurrence (i.e., Garcia’s death).
22 Paychex argues not only that there is no offset and that Deploy must pay the amounts owed to
23 Paychex, but that Deploy’s breach of contract claim against PEI – asserted as a cross-claim in this
24 case – fails as a matter of law.
25 The only thing considered in the Maryland action was the policy language of PEI’s
26 insurance policy with its insurer. The Maryland court determined that the language did not cover
27 Deploy as an “additional insured” given the lack of a signed agreement prior to Garcia’s death.
1 oral contract, by which PEI was supposed to have secured insurance coverage for Deploy, and did
2 not reach whether the SSA’s indemnity provision nonetheless required PEI to indemnify Deploy.
3 Collateral estoppel – whether considered under California law or Pennsylvania law – does not bar
4 Deploy’s claims.
5 III. CROSS-CLAIMS FOR INTENTIONAL MISREPRESENTATION AND DECEIT
AND RICO
6
Paychex argues that Deploy’s cross-claims against PEI for intentional misrepresentation
7
and deceit fail as a matter of law – and do not provide a basis to withhold the PEI funds otherwise
8
owed to Paychex – because Deploy has no evidence showing that it was damaged by any
9
misconduct of PEI, given that neither side signed the SSA until after Garcia’s death.
10
Paychex’s argument ignores Deploy’s theory that it was lulled into not being concerned by
11
the absence of a signed SSA by both the parties’ commencement of operation under the SSA
12
before it was signed and the “fraudulent” evidence of insurance coverage sent to Deploy by
13
Epstein. The certificates – one provided by PEI to Deploy in May showing coverage for the WCD
14
warehouse where work was being performed and the other in July (a mock-up according to PEI,
15
but evidence of actual coverage according to Deploy) – helped induce Deploy to continue
16
operating under the oral contract. Under Deploy’s theory, by July 31, 2017, it reasonably
17
understood that it had coverage and continued operations with PEI under that understanding prior
18
to the Garcia accident. Whether Deploy’s reliance was reasonable and whether Deploy would
19
have acted differently but for PEI’s representations raise disputes of material fact that preclude
20
summary judgment.
21
Paychex also argues that given Deploy’s characterization – both in the Maryland coverage
22
action and this case – that the parties were operating under an oral contract based on the agreed-to
23
material terms of the SSA by May/June 2017, the allegedly false insurance certificates sent in July
24
2017 could not have induced Deploy to do anything and without inducement Deploy cannot prove
25
damages. However, Deploy alleges that the false representations of insurance coverage
26
encouraged Deploy to continue to operate under the oral contract. Had Deploy known about the
27
lack of coverage, Deploy argues, it would have taken steps to protect itself or stop performing
1 under the oral contract.* These competing assertions rest on disputes of material fact precluding
2 summary judgment.
3 For similar reasons, I reject Paychex’s argument that Deploy’s fourth and fifth claims of
4 || relief against PEI — for civil RICO and conspiracy to violate RICO — fail as a matter of law
5 || because Deploy cannot show damage stemming from PEI’s alleged fraudulent misconduct.
6 || Deploy’s potential damages from the fraud-based RICO claims are the costs of defending the
7 insurance coverage action, the costs of defense in this case, and some component of the costs
8 || incurred in litigating Case No. 19-cv-06061.
9 CONCLUSION
10 For the foregoing reasons, I find that Paychex has standing as a secured creditor to assert
11 claims against Deploy related to PEI’s rights under the SSA. Paychex’s motion for summary
12 || judgment on its affirmative claims for Open Account, Services Rendered, Account Stated, and

13 Breach of Contract is DENIED: there are disputes of material fact regarding what amounts (if any)

v 14 || Deploy is entitled to withhold under its claims in Case No. 19-cv-06061-WHO and its cross-

15 || claims in this case.
16 IT IS SO ORDERED.

= 17 Dated: December 2, 2022

Qe
19 .
illiam H. Orrick
20 United States District Judge
21
22
23
24
25
26 * Deploy also notes that it incurred expenses in responding to a Department of Justice/Department
of Transportation investigation into PEI. Oppo. at 17. Paychex argues that Deploy’s failure to
97 || break down its defense costs for the actions in this District and the federal investigations means
summary judgment should be granted in its favor. Reply at 10 & n.5. Deploy has, however,
2g || provided some evidence of its costs in these actions. Oppo. at 17; Morrison Decl., Ex. I. (citing
deposition testimony from Deploy). That is sufficient at this juncture.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10073699. Public record. Not legal advice.