In doing the rounds to check on updates in the industry I came across the following lawsuit by an employee of Rescue 1 Financial. In the interest of disclosure, Rescue One and this website have a storied past but this reporting has no relation to that history.
On September 9, 2019, a former employee of Rescue 1 Financial filed an employment suit in Orange County, California.
The employee is identified as Roy Barnhart and is identified as the Director of Business Development. The employee issue is interesting but not the intriguing part so let’s get that out of the way first.
Barnhart claims he was exceeding his employment goals but became ill and was eventually fired from his high paying job at Rescue 1 Financial. During this time the complaint says, “Of note, throughout this time period, Plaintiff’s wife was the manager of human resources for Defendant. Not only was Plaintiff’s wife aware of Plaintiff’s illness, but Plaintiff also separately notified Defendant’s CEOs, Bradley Smith and Branden Millstone, via email of his medical condition and that he had to go to the emergency room for treatment.”
I bet that made for some interesting conversation around the dinner table between Roy and his wife since “Though Plaintiff’s wife informed Plaintiff that he qualified for protected leave under CFRA, Defendant failed to provide Plaintiff with any notice of his rights under CFRA or give him the opportunity to formally take such leave.” Rut ro.
But Here is the Intriguing Bit
The complaint was filed against “RESCUE 1 FINANCIAL, LLC, a California Limited Liability Company, and DOES 1 through 20, inclusive,” states the following about Rescue 1 Financial and other yet unidentified parties who are defendants in the lawsuit:
“Plaintiff is informed and believes, and based thereupon alleges, that Defendants, and each of them, including those defendants named as DOES 1-20, acted in concert with one another to commit the wrongful acts alleged herein, and aided, abetted, incited, compelled and/or coerced one another in the wrongful acts alleged herein, and/or attempted to do so, including pursuant to Government Code §12940(i). Plaintiff is further informed and believes, and based thereupon alleges, that Defendants, and each of them, including those defendants named as DOES 1-20, and each of them, formed and executed a conspiracy or common plan pursuant to which they would commit the unlawful acts alleged herein, with all such acts alleged herein done as part of and pursuant to said conspiracy, intended to cause and actually causing Plaintiff harm.”
The complaint uses language which is either boilerplate or appears to imply there are more entities involved with Rescue 1 Financial. Let me know what you think in the comments below.
“11. Plaintiff is informed and believes, and based thereon alleges, that there exists such a unity of interest and ownership between Defendant and DOES 1-20 that the individuality and separateness of Defendant has ceased to exist.
12. Plaintiff is informed and believes, and based thereon alleges, that despite the formation of purported corporate existence, Defendant and DOES 1-20 are, in reality, one and the same as Defendant, including, but not limited to because:
a. Defendant is completely dominated and controlled by DOES 1-20, who personally committed the frauds and violated the laws as set forth in this complaint, and who have hidden and currently hide behind Defendant to perpetrate frauds, circumvent statutes, or accomplish some other wrongful or inequitable purpose.
b. DOES 1-20 derive actual and significant monetary benefits by and through Defendant’s unlawful conduct, and by using Defendant as the funding source for their own personal expenditures.
c. Plaintiff is informed and believes that Defendant and DOES 1-20, while really one and the same, were segregated to appear as though separate and distinct for purposes of perpetrating a fraud, circumventing a statute, or accomplishing some other wrongful or inequitable purpose.
d. Plaintiff is informed and believes that Defendant does not comply with all requisite corporate formalities to maintain a legal and separate corporate existence.
e. Plaintiff is informed and believes, and based thereon alleges, that the business affairs of Defendant and DOES 1-20 are, and at all times relevant were, so mixed and intermingled that the same cannot reasonably be segregated, and the same are in inextricable confusion. Defendant is, and at all times relevant hereto was, used by DOES 1-20 as a mere shell and conduit for the conduct of certain of Defendant’s affairs, and is, and was, the alter ego of DOES 1-20. The recognition of the separate existence of Defendant would not promote justice, in that it would permit Defendant to insulate itself from liability to Plaintiff for violations of the Government Code and other statutory violations. The corporate existence of Defendant and DOES 1-20 should be disregarded in equity and for the ends of justice because such disregard is necessary to avoid fraud and injustice to Plaintiff herein.
13. Accordingly, Defendant constitutes the alter ego of DOES 1-20, and the fiction of their separate corporate existence must be disregarded.
14. As a result of the aforementioned facts, Plaintiff is informed and believes, and based thereon alleges that Defendant and DOES 1-20 are Plaintiff’s joint employers by virtue of a joint enterprise, and that Plaintiff was an employee of Defendant, and DOES 1-20. Plaintiff performed services for each and every one of Defendant, and to the mutual benefit of all Defendant, and all Defendant shared control of Plaintiff as an employee, either directly or indirectly, and the manner in which Defendant’s business was and is conducted.”
Since Barnhart was the Director of Business Development at Rescue 1 Financial, that part of the lawsuit quoted above could have a tantalizing meaning if someone is actually pulling the strings there. Or just maybe I’m reading too much into that part of the complaint.
We will just have to wait and see but if there is a tipster (send in your tips here) out there with more information, please let me know.
And if someone at Rescue 1 Financial wants to make a statement I can add to this post to clear up any potential incorrect information, you can use this form. I welcome the input and voice of Rescue 1 to help clear up any misperception. Let’s correct the record if the allegations are wrong.
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