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1 James A.

Otto, SBN: 144432


LAW OFFICE OF JAMES A. OTTO
2 19536 San Jose Street
Northridge, California 91326
3 Telephone: (818) 366-8432
Facsimile: (818) 368-7757
4
Regina Ashkinadze (SBN 256908)
5 LAW OFFICES OF REGINA ASHKINADZE
144 N. Glendale Ave., Suite 333
6 Glendale, California 91206
Telephone: (310) 285-8595
7 Facsimile: (310) 300-2112

8 Attorneys for Plaintiffs JONATHAN BEASLEY, IRINA


MASHAROVA, ANNA RSHTOUNI, MARCELO PINEDA,
9 CHUCK PRICE, YURI GRISHKO, TSUNG-HSIEN SHEN, TIM
LUK, DAVID DE HILSTER, LILY BUMATAY, PARTHA
10 CHOUNDRY, TIM NGUYEN, JAMES NGUYEN, EDWARD
DUONG, ISMAIL GUZEY, STEVE MO, BONITA SHOK AND
11 KAREN KU

12
SUPERIOR COURT OF THE STATE OF CALIFORNIA
13
COUNTY OF LOS ANGELES – SOUTH DISTRICT
14
JONATHAN BEASLEY; IRINA Case No. NC055957
15 MASHAROVA; ANNA RSHTOUNI;
MARCELO PINEDA; CHARLES PRICE; [Assigned to The Honorable Mark C. Kim
16 YURI GRISHKO; TSUNG-HSIEN SHEN;
TIM LUK; DAVID DE HILSTER; LILY Dept. S27]
17 BUMATAY; PARTHA CHOUNDRY; TIM
NGUYEN; JAMES NGUYEN; EDWARD
18 DUONG; ISMAIL GUZEY; STEVE MO; PLAINTIFFS’ TRIAL BRIEF
BONITA SHOK; and KAREN KU,
19 Trial:
Plaintiffs,
20 Date: May 132, 2019
vs. Time: 8:30 a.m.
21 Dept: S-27
COGNIZANT TECHNOLOGY SOLUTIONS,
22 a California business, form unknown; Trial Date: May 13, 2019
MOLINA HEALTHCARE, INC., a California
23 business, form unknown; AMIR DESAI, an
individual and managing agent for MOLINA
24 HEALTHCARE, INC.; and DOES 1 to 50,
inclusive,
25
Defendants.
26

27 AND RELATED CROSS-ACTION

28 1
PLAINTIFFS’ TRIAL BRIEF
1. PARTIES ATTORNEY
1

2 Plaintiffs James Otto, Esq.


Jonathan Beasley, Irina Masharova, Regina Ashkinadze Esq.
3 Anna Rshtouni, Marcelo Pineda, Chuck Price, Yuri
Grishko, Tsung-Hsien Shen, Tim Luk, David
4 De Hilster, Lily Bumatay, Partha Choundry, Tim
Nguyen, James Nguyen, Edward Duong,
5 Ismail Guzey, Steve Mo, And Karen Ku

6
Defendant Molina Healthcare, INC. BOIES SCHILLER FLEXNER LLP
7 David K. Willingham, Esq.
8
Defendant Cognizant Technology Solutions.
9 BIRD, MARELLA, BOXER, WOLP , et. al.
Jeremy D. Matz Esq.
10
2. STATEMENT OF CASE
11

12 This is a wrongful termination and retaliation case that arises out of the violation of Plaintiffs
civil rights. (Government Code § 12921). The complaint alleges causes of action that include
13
wrongful termination, national origin discrimination, retaliation, violation of Labor Code section
14
1102.5, as well as intentional infliction of emotional distress and violation of the Unfair Business
15
Practices Act. (Business & Professions Code Section 17200 prohibits any and all means or acts of
16 unfair competition, including “any unlawful, unfair or fraudulent business act or practice and

17 unfair, deceptive, untrue or misleading advertising and any act prohibited by [law].”)

18 Defendants admit to a preference and to replacing non-Indian employees, including


19 plaintiffs, with Indian national.

20 The Second Amended Complaint pleads conspiracy to violate Government Code sections
12940 by preferring a national origin over another and for age discrimination. (SAC - p. 8/7-12
21
[COGNIZANT, DESAI and MOLINA conspired to displace competent U.S citizen and green
22
card employees of MOLINA, including the plaintiffs and hired only Indian males under the age of
23
40.]
24 Also, the SAC at page 15 has a section entitled A. Factual Allegations In Support of the
25 Conspiracy Among Molina, Cognizant and Desai that describes the conspiracy to commit

26 unlawful discrimination. (SAC ¶¶ 48-54.) Specifically, at page 16, lines 1-2, the SAC alleges that
“the contract between MOLINA and COGNIZANT required MOLINA to hire Cognizant’s H-1B
27
contractors from India.” In the very next sentence, at page 16, lines 4-7, the SAC alleges “The
28 2
PLAINTIFFS’ TRIAL BRIEF
removal of 40 MOLINA employees, including the Plaintiffs, was in furtherance of the conspiracy
1
because DESAI needed to make room to bring in the H-1B visa-holders supplied by
2
COGNIZANT.” Finally, SAC page24, lines 27-28 allege damages when the conspiracy fired the
3
plaintiffs.
4

5 3. SUMMARY OF CONTENTIONS

6 PLAINTIFF’S CONTENTIONS:

7 Defendants expressed and showed an illegal preference to hire and retain Indian nationals
8
by replacing Plaintiffs with Indian contractors after plaintiffs were ordered to train the Indians.
9
DEFENDANT’S CONTENTIONS:
10
Defendants claim a business necessity to fire the 18 plaintiffs and replace them with over
11

12 replace 1,200 Indian nationals.

13 4. LIST OF WITNESSES:

14 Plaintiff’s Witness:

15 - 18 plaintiffs who were highly skill IT workers who received outstanding performace
16 evaluations and will testify that they were ordered to train their replacements, the
17 unskilled Indian contractors from Indian; the terms of employment with Molina; job

18 duties and projects; the inability to eliminate their job duties, and the fact that her job
duties could not be performed offshore because of HIPAA; the work environment in
19
the IT department; the change in the diversity of the IT department between the start of
20
employment and the date of termination; the duties and work product of Cognizant’s
21
Indian contractors with whom they were training and working; the termination
22 meeting; and special and general damages.
23 - Supriya Sood the former Senior Vice-President of Human Resources who

24 investigated and found illegal discrimination in the IT department. Ms. Sood was fired
for her part in the investigation and Molina settled her legal action;
25
- Josephine Wittenberg, the former Director of Human Resources who
26
investigated and found illegal discrimination in the IT department. Ms. Wittenberg was
27
fired for her part in the investigation and Molina settled her legal action;
28 3
PLAINTIFFS’ TRIAL BRIEF
- Stuart Zwicke, former Construction Project Manger who oversaw all
1
functions of IT as they related to various projects throughout the U.S. Mr. Zwicke was
2
told by Amir Deasi that Molina preferred to import Indian nationals rather than
3
employee U.S. workers. He was fired for protesting the discrimination and Molina
4 settled his legal action;
5 - Laura Onufrock, former Manger of IT Budgets who was told by Amir

6 Deasi and Joe White (CFO) that Molina preferred to import Indian nationals rather than
employee U.S. workers. She was fired for protesting the discrimination and Molina
7
settled her legal action;
8
- Dixie Lewellan, former payroll clerk, who will testify that she was fired for
9
questioning why Molina was hiring only Indian nationals and Molina settled her legal
10 action;
11 - Dr. Brian Kleiner, Expert in Human Resources Management, who will
12 testify that Ms. Sood and Wittenberg followed proper HRM protocol in their
investigation and decision that national origin, harassment and hostile work place
13
discrimination occurred;
14
- Dr. Darryl Zengler, Expert in Economics, will testify that based on
15
Molina’s verified, audited Financial Statements given to the SEC and Molina’s
16 shareholders, Molina was not experiencing any financial problems in 2008, 2009 or
17 2010.
18 Plaintiffs state that the proffered witnesses by Molina and Cognizant having nho relevant

19 evidence to offer the jury.

20 Molina’s Witnesses:

21
- Amir Desai:
22
- Joe White:
23 - Terry Bayer:
24 - Roseline Agboke
25 - Debbie Simkins

26 - Nitin Gotmare
- Joanne Maghirang
27
- Alan Goedde
28 4
PLAINTIFFS’ TRIAL BRIEF
- Laurie Chua
1
Cognizant’s Witnesses:
2

3 - Kaushik Sen

4 - Helen Kim
- Ted Anderson
5

6
5. THE FACTS
7

8 The facts herein have been tested at demurrer and 5 separate summary judgment motions.
After FIVE (5) separate and distinct summary judgment motions containing in excess of
9
30,000 pages this matter is set to go to trial.
10
Plaintiffs were highly skilled, productive, good-performing employees of Molina’s
11 Information Technology Department (“IT”). When they started working in Molina IT, it was a

12 diverse workplace. However, after Molina promoted Amir Desai (“Desai”), an individual of Indian

13 descent, to be Chief Information Officer (“CIO”) of IT, the IT Department slowly became

14 dominated by individuals of Indian national origin and ancestry, culminating in the Plaintiffs’
termination in 2010, because they were not Indian. Desai admitted to multiple witnesses that he
15
preferred to hire persons of Indian national origin/ancestry.
16
A. Molina and Cognizant Intentionally And Disproportionately Staffed The IT
17
Department With Individuals Of Indian National Origin/Ancestry
18 Cognizant and Molina’s plan to illegally discriminate against the Plaintiffs was more than
19 two years in the making. In early 2008, Desai began pitching the conspiracy plan to the Chief

20 Operating Officer, Terry Bayer, and Chief Executive Officer, Mario Molina, to convert IT into a
department that would be staffed by Cognizant employees and contractors from India. Cognizant’s
21
business model is to bring in IT contractors from India.
22
The contractors would be provided by Cognizant, pursuant to a 2008 contract, which Desai
23
signed, that required Cognizant to take control over the hiring of personnel in IT. From July 2008 to
24 March 2011, the number of Indian workers hired into IT increased dramatically over all other

25 ethnic groups. From 2009 to 2010, alone, the ratio of Indian workers jumped from 30% to 70%.

26 Dixie Lewellan, former payroll clerk, lost her job when she questioned why Molina was

27 hiring only Indian nationals.


Stuart Zwicke, former Construction Project Manger who oversaw all functions of IT as they
28 5
PLAINTIFFS’ TRIAL BRIEF
related to various projects throughout the U.S., was told by Amir Deasi that Molina preferred to
1
import Indian nationals rather than employee U.S. workers. Mr. Zwicke was ordered to train the
2
Indian contractors from Cognizant.
3
In July 2008, Molina’s newly hired Vice-President of HR, Supriya Sood, noticed that there
4 was an apparent national origin discrimination problem in IT; Ms. Sood learned about numerous

5 discrimination issues mounting in IT from the outgoing Vice-President of HR. Starting in mid-2008,

6 Ms. Sood began having multiple discussions with Desai about the exponential increase of Indian
individuals in IT.
7
Around the same time, Laura Onufrock, Molina’s Manager of Budgets for IT, also had
8
several meetings and conversations with Molina’s Chief Accounting Officer, Joe White, and
9
Desai regarding the dramatic shift of Molina’s diverse workforce in favor of Indian individuals
10 over the previous year.

11 Onufrock also flagged that a lot of the Indian workers were contractors provided by
12 Cognizant, and that Molina was spending a fortune on these contractors. Ms. Onufrock figured out
that Molina’s IT employees cost about $48-$50/hour, while Cognizant’s contractors cost about
13
$75/hr. Ms. Onufrock informed Desai and White in 2008, 2009 and 2010 that the cost of the Indian
14
contractors from Cognizant was 144% higher than Molina’s non-Indian workers, including
15
managers and benefits. Nonetheless, Molina’s upper management continued hiring Indian
16 contractors at any expense regardless of the fact that Molina’s own employees were less expensive,

17 more experienced and knew the business systems.

18 From August through December 2009, Onufrock, Deasi and Joe White (CFO) had

19 numerous meeting regarding the IT department budget and manpower needs. Onufrock
identified the costly Indian contractors and unnecessary projects as 2 areas to reduce excess
20
costs. Both Deasi and White told her that Molina preferred to hire Indians and “cost was no
21
object.”
22 Desai told Onufrock that, "We have obligations to Cognizant. These aren't -- this isn't
23 going to change.” Desai routinely hired Cognizant contractors, who were all Indian, to fill IT

24 positions before he would look for a non-Indian, thus, increasing Molina’s cost of labor and

25 inflating IT’s budget, both actual and projected. Onufrock observed how the national origin
makeup of IT changed from being diverse in 2006 to being over 95% Indian in 2010.
26
To single his efforts to push his preference of replacing employees with contractors of
27
Indian national origin under the guise of “cost savings”, on January 25, 2009, after a profitable
28 6
PLAINTIFFS’ TRIAL BRIEF
2008, Desai sent an email to his direct report, forewarning, “you know my pitch…this [2009] will
1
be the worst year of our career”. True to his planning, in the fourth quarter of 2009, IT was claimed
2
to be over budget due to extraordinary costs in the amount of contractor labor hours used to
3
complete projects. Desai’s plan was to use the expensive contractor labor, of Indian national origin
4 or ancestry, to drive up the cost of labor in IT for 2009, and then blame the false high labor costs to

5 justify a “Reduction-in-Force”. For example, Plaintiff Villanueva, an IT manager, testified that in

6 2009 he was routinely instructed by his superior, Nitin Gotmare, an Indian IT director, to inflate the
estimated hours required for IT projects for 2010, so that IT could get approval to hire more
7
contractors. In October 2009, Desai informed Onufrock and White that Desai was moving forward
8
with a “reduction in force” in IT.
9
B. Desai Perpetrates A Fraud On The Plaintiffs
10
On January 13, 2010, Ms. Sood and Josephine Wittenberg, confronted Desai about putting
11 the victims to work at the many IT projects, or HIM, that were already in need of IT workers. Deasi

12 told Ms. Sood and Wittenberg that he and John Molina (CEO) preferred to hire and retain only

13 Indian nationals.
On January 13, 2010, the Plaintiffs showed up for work as usual, and were ushered into a
14
conference room, where Desai informed 33 IT employees that they were being terminated effective
15
immediately “[a]s a result of the current financial performance” which Desai described as a loss in
16
the fourth quarter of 2009. Shortly after Desai’s speech, Molina pressured the Plaintiffs to sign a
17 severance agreement (“General Release”). Relying on Desai’s representation as the CIO and

18 believing that it was true that their termination was due to financial reasons, Plaintiffs signed the

19 General Release to their detriment. Plaintiffs had no way of knowing that Desai had in fact lied to

20 them in order to get them to waive their rights against Molina.


Desai’s representation to Plaintiffs was false and Desai knew it. First, Molina did not suffer
21
losses at the end of 2009. The opposite is true. In 2009, Molina grew by 8.5%, with the fourth
22
quarter showing the largest growth of over 2.2%. Molina increased Equity from <0.5% > to
23 over 2.1% . (Id.)

24 Molina’s 2009 net income appears to have dropped to $30,868,000 for the year, however,
25 this appearance is deceptive because it was not because Molina made less income but because the

26 Net Cash Position Provided By Operating Activities, which is revenue not yet realized as profit,
increased 75% up to $155 million. This means that Molina had $155 million cash, but reported it as
27
“deferred income,” which appears as a loss in income but is not truly a loss because of how the
28 7
PLAINTIFFS’ TRIAL BRIEF
money was classified. The 2009 Net Cash Position ($82 million) increased dramatically from 2008
1
(<$72 million>) showing a 214.5% (or $154 million) increase in cash. If Molina had realized as
2
profit the $155 million; then, the net income for 2009 is truly $185 million, or a 208% increase in
3
net income over 2008. With the $155 million of unrealized income, Molina used $135 million in
4 cash to purchase a new company – the Health Information Management (HIM) division of Unisys

5 Corporation on January 18, 2010. As of 2009, Molina was already planning for the increase in work

6 in IT from the HIM acquisition.


Second, Desai wanted to get rid of the Plaintiffs because as of September 2009 Desai had
7
already planned on hiring more Indian workers upon the termination of the Plaintiffs and he had a
8
commitment to take on Cognizant contractors. On January 12, 2010, Cognizant obtained
9
authorization from the U.S. Department of Labor to bring in 40 new contractors from India to staff
10 at Molina for 2010. In 2010, the IT department consisted mostly of Indian staff.

11 Third, the Plaintiffs’ jobs could not be eliminated because they were essential to Molina’s
12 core business functions. Immediately before Plaintiffs were terminated, they trained contractors,
who were all Indian, on how to do the Plaintiffs’ own jobs.
13
Fourth, given the hundreds of new jobs created by the integration of HIM into Molina, the
14
termination was not necessary as there were hundreds of IT jobs available that needed to be filled in
15
2010 and Molina had planned extensive amounts of projects for IT. For example, just the HIM
16 project, alone, opened over 1,120 new jobs. This caused Molina to add at least 44 new employee

17 positions and 108 new contractors immediately after terminating the Plaintiffs in 2010. In 2011,

18 Molina added another 60 employee positions and a whopping 315 contractors. All of these new

19 positions were filled by Indian individuals which was Desai’s intent all along.
Fifth, the RIF crippled IT’s ability to continue carrying out its functions effectively.
20
Molina’s replacement of Plaintiffs with contractors was not a cost cutting measure because Molina’s
21
payment for Cognizant’s contractors was not any cheaper than the Plaintiffs’ wages, meaning that
22 Molina did not cut any costs by terminating Plaintiffs. In fact, in 2010, IT went $5.5 million over

23 budget due to extraordinary contractor labor costs.

24 C. Molina Hires Over 1,500 Indian Contractors.

25 Both Onufrock and Wittenberg testified that, the day after firing (January 13, 2010) the
Amereican employees, Molina hired hundreds of Indian contractors (the IT department was
26
shoulder to shoulder with new faces, all of them Indina National Origin.)
27
By April of 2010, Moliina had hired over 1,500 new Indina employees/contractors.
28 8
PLAINTIFFS’ TRIAL BRIEF
1. The need for so many new workers was two fold: (1) Molina was growing and
1
needed the extra workers; (2) Molina purchased for approximately $400 million the division of
2
Unisys Corporation, called Health Information Management (“HIM”).
3
As a result of the huge and sudden influx of Indina workers, the IT Department labor costs
4 skyrocketed out of control. The labor costs exceeded budget by over $5.5 million dollars due to

5 the hiring of so many contractors and employees of Indian national origin/ancestry to replace the

6 Plaintiffs. (UDF 24) Further, Ms. Onufrock reported to management in 2010 that the IT
projects were over budget as a result of a lot of errors and a lot of quality control issues
7
because the Indian contractors were not qualified for the job. The lack of ability of the Indian
8
nationals to do the work was beyond a simple language barrier, but, also, included a lack of the
9
technical skill sets and lack of management skill sets. The fact is that the IT Department budget
10 was hurt by the over hiring of Indian contractors to try and do the same job done by the Plaintiffs.

11 D. Molina’s HR Finds That Molina Discriminated Against Plaintiffs


12 In late 2010, Ms. Sood and Josephine Wittenberg, a Director of HR, conducted an
investigation into claims that Desai discriminated against the Plaintiffs and others in IT. Ms. Sood
13
had already been having ongoing discussions with Desai about the lack of diversity within his IT
14
department since 2008. Ms. Sood learned that the contractors being provided through Cognizant
15
were not the highest qualified people to be doing the job.
16 The HR investigation determined that the great majority of promotions on a company-wide
17 basis were going to employees of Indian national origin or ancestry, to the exclusion of the non-

18 Indian employees; there was an unequal level of action or discipline taken in the event of errors by

19 the Indian employees as opposed to the non-Indian employees; Molina had a preference for hiring
Indian employees and contractors over non-Indian employees; Molina was terminating non-Indian,
20
employees, either citizens or residents, and replacing them with employees and contractors of
21
Indian national origin or ancestry, a lot of whom held H1B visas; many employees and contractors
22 were speaking Indian dialects in meetings, which excluded the non-Indian employees from

23 participating. Desai expressed a preference for hiring individuals of Indian national origin or

24 ancestry who were also under 40 years of age and male.

25 The HR investigation concluded that there was a hostile work environment in IT in part
because management did not hide its preference for Indian employees and contractors. The HR
26
investigation found that Molina engaged in national origin/ancestry discrimination. Ms. Sood was
27
concerned that Molina was taking part in illegal activity relative to its preference for Indian
28 9
PLAINTIFFS’ TRIAL BRIEF
employees and contractors over everyone else. Ms. Sood notified Molina 4 or 5 times that it was
1
not in compliance with labor laws and requested Molina to comply with employment obligations,
2
including issues of national origin discrimination.
3
Upon discovering the truth – i.e. that Plaintiffs were not terminated for financial reasons and
4 were really terminated because they were not Indian - Plaintiffs sent Molina a letter to void the

5 severance agreements, rescinding the General Release. Molina refused to rescind.

6 II. ARGUMENT
A. The General Release Is Void Because It Attempts To Release Fraud
7
Molina will claim that the plaintiffs signed a general release. Plaintiffs have proven at
8
summary judgment that the release was procured by fraud.
9
Also, Civil Code § 1668 provides: “All contracts which have for their object, directly or
10 indirectly, to exempt anyone from responsibility for his own fraud, or willful injury to the person or

11 property of another, or violation of law, whether willful or negligent, are against the policy of the

12 law.” The public policy against contracting away individual liability for fraud, deceit, or other
intentional acts was codified in 1872 in the Civil Code. (See, Civil Code §§ 1572, 1608, 1668,
13
1709.) Over the past 140 years, the courts have upheld the public policy against the contracting
14
away liability for fraud. (Simmons v. Ratterree Land Company (1932) 217 Cal. 201, 204 [contract
15
rescission in favor of a plaintiff because the “Release” provisions purported to relieve defendant
16 from liability for any fraudulent representations made that defendant had fraudulently induced the

17 sale by falsely representing the business purposes]; Manderville et al. v. PCG & S Group, Inc.

18 (2007) 146 Cal.App.4th 1486, 1500; Ting v. AT & T (9th Cir. 2002) 182 F.Supp.2d 902, 921, [a

19 contract that exempts from liability for fraud never comes into legal existence.]; Tiedje v. Aluminum
Taper Milling Company (1956) 46 Cal.2d 450, 453-454; First National Bank v. Thompson (1931)
20
212 Cal. 388, 405-406; Health Net Of California, Inc., v. Department Of Health Services, et al.
21
(2003) 113 Cal.App.4th 224, 234 [there are no exemptions from liability for intentional wrong,
22 gross negligence, or violation of law].)

23 The rationale for this rule is that a contract that violates a statute is contrary to public policy
24 and may not be enforced in either law or equity. (Kelton et al. v. T. Stravinski (2006) 138

25 Cal.App.4th 941, 949; Kashani v. Tsann Kuen China Enterprise Company (2004) 118 Cal. App.4th
531, 540.) Courts routinely invalidate settlement agreements for fraud. (Sime v. Malouf (1949) 95
26
Cal.App.2d 82, 91-92, [fraudulent inducement to sign a settlement agreement giving up his right to
27
sue defendants for fraud in a business dealing.]; McQuirk v. Donnelley (1999) 189 F.3d 793, 796
28 10
PLAINTIFFS’ TRIAL BRIEF
[release not enforceable as it violated § 1668 by shielding defendant from liability for intentional
1
torts]; Baker Pacific Corp. v. Suttles (1990) 220 Cal.App.3d 1148, 1157 [invalidated employment
2
release that exempted the employer from all acts of fraud”]; Blankenheim v. E.F. Hutton &
3
Company, Inc. (1990) 217 Cal.App.3d 1463, 1473-1476, [a contract which exempts a party from
4 liability for his own positive assertions, made in a manner not warranted by the information, which

5 are untrue, is against the policy of the law.]

6 The Doctrine of Waiver is of no avail to Molina. Before there can be a waiver there must be
full knowledge on the part of the party defrauded. (Civil Code, § 1542; Ellis Et Ux v. Jones, et al.
7
(1932) 121 Cal.App. 325, 329; Mazuran v. Stanich (1928) 95 Cal.App. 327, 334-335; Chung v.
8
Johnston (1954) 128 Cal.App.2d 157, 163.) “It has often been held that if the releaser was under a
9
misapprehension, not due to his own neglect, as to the nature or scope of the release, and if this
10 misapprehension was induced by the misconduct of the releasee, then the release, regardless of how

11 comprehensively worded, is binding only to the extent actually intended by the releaser.” (DuBois

12 v. Sparrow (1979) 92 Cal.App.3d 290, 298 (misrepresentation); M. G. Chamberlain & Company,


v. Simpson, et al (1959) 173 Cal.App.2d 263, 276 (deception); Raynale v. Yellow Cab Company
13
(1931) 115 Cal.App. 90 (fraud prevented contract formation as no meeting of the minds); Meyer v.
14
Haas (1899) 126 Cal. 560, 563 (misrepresentation).) Molina/Desai’s argument that the General
15
Releases excuse them from their fraud establish the violation of Civil Code §1668 and invalidates
16 the General Releases outright.

17 B. Plaintiffs Have Satisfied Both Notice Of And Offer To Rescind The Contract.
18 Plaintiffs did rescind the Releases. (Civil Code §1691)

19 Here, it is undisputed that Plaintiffs filed a complaint demanding rescission and also sent
Molina a letter of rescission. Plaintiffs are unable to restore the consideration received in their
20
original releases so seek to delay the restoration of consideration until final judgment. Molina/Desai
21
offered no evidence that they are substantially prejudiced by the delay.
22 C. Plaintiffs Have Satisfied the Essential Elements For Fraud In The Inducement As It
23 Is Undisputed That Plaintiffs Were Not Told The Truth About Their Job
24 Termination.

25 The elements of fraud are “(a) a misrepresentation (false representation, concealment, or


nondisclosure); (b) scienter or knowledge of its falsity; (c) intent to induce reliance; (d) justifiable
26
reliance; and (e) resulting damage. Fraud in the inducement is a subset of the tort of fraud. It
27
“occurs when ‘ “the promisor knows what he is signing but his consent is induced by fraud, mutual
28 11
PLAINTIFFS’ TRIAL BRIEF
assent is present and a contract is formed, which, by reason of the fraud, is voidable.” ’ ” (Hinesley
1
v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294-295.)
2
A single material misrepresentation may establish the tort. (OCM Principal Opportunities
3
Fund et al., v. CIBC World Markets Corporation (2008) 157 Cal.App.4th 835, 842.) Moreover,
4 “when the defendant purports to convey the ‘whole truth’ about a subject, “ ‘misleading half-truths'

5 ” about the subject may constitute positive assertions for the purpose of [falsity]” (Ibid; Randi W. v.

6 Muroc Joint Unified School District (1997) 12 Cal.4th 1066, 1081-1084.)


“[I]f the releaser was under a misapprehension, not due to his own neglect, as to the nature
7
or scope of the release, and if this misapprehension was induced by the misconduct of the releasee,
8
then the release, regardless of how comprehensively worded, is binding only to the extent actually
9
intended by the releaser. Under such circumstances it is unnecessary to effect a rescission of the
10 release, and no question of notice to rescind or of restoration of consideration received arises.”

11 (DuBois v. Sparrow (1979) 92 Cal.App.3d 290, 298-299.) (Emphasis added.) Such an issue is a jury

12 question. (Jordan v. Guerra (1943) 23 Cal.2d 469.) “It is the province of the jury to determine
whether the circumstances furnished the opportunity for overreaching, whether the defendant or his
13
agent took advantage of it, and whether the plaintiff was thereby misled.” (DuBois, supra, 92
14
Cal.App.3d at 299.)
15
Here, both plaintiffs and defendants all agree that on January 13, 2010, Desai informed the
16 Plaintiffs that they were being fired “[a]s a result of … a quarterly loss in Q4 [2009]”. The Plaintiffs

17 were immediately pressured to sign a General Release or suffer the consequences of no job and no

18 pay. Relying on Desai’s representation that the reason behind their termination was purely

19 financial, and having no information to the contrary, Plaintiffs signed the General Release to their
detriment.
20
Desai’s representation that he was terminating the Plaintiffs for financial reasons was false
21
and he knew it to be false when he made the representation because: (1) Molina was not suffering
22 from bad financial performance, and (2) the real reason behind Plaintiffs’ termination was that

23 Desai wanted an all Indian staff, which had nothing to do with any financial concerns.

24 First, Molina did not suffer losses at the end of 2009. In 2009, Molina grew by 8.5%, with

25 the fourth quarter showing the largest growth of over 2.2%. Molina increased Equity from <0.5% >
to over 2.1% . Molina’s 2009 net income appears to have dropped to $30,868,000 for the year,
26
however, this appearance is deceptive because it was not because Molina made less income but
27
because the Net Cash Position Provided By Operating Activities, which is revenue not yet realized
28 12
PLAINTIFFS’ TRIAL BRIEF
as profit, increased 75% up to $155 million. Molina deferred reporting the $155 million cash as
1
income. The 2009 Net Cash Position ($82 million) increased dramatically from 2008 (<$72
2
million>) showing a 214.5% (or $154 million) increase in cash. If Molina had realized as profit the
3
$155 million; then, the net income for 2009 is truly $185 million, or a 208% increase in net income
4 over 2008. With the $155 million of unrealized profit, Molina used $135 million in cash to purchase

5 HIM from Unisys. There is undisputed evidence that Molina had no financial issues in 2009.

6 Second, Desai expressed to other Molina executives and employees that he preferred to hire
only Indians for IT. Desai concealed from the Plaintiffs that Desai, Cognizant and Molina had
7
planned on hiring more Indian staff in September 2009 upon the firing of the Plaintiffs. In the first
8
quarter 2010, over 1,000 Indian employees were hired into Molina’s jobs, with many replacing the
9
Plaintiffs. Immediately thereafter, the IT Department labor costs skyrocketed out of control due to
10 the over hiring of Indian contractors to replace the Plaintiffs and because the contractors were

11 significantly more expensive than paying the Plaintiffs. Projects were also over budget as a result of

12 a lot of errors and quality control issues because the Indians were not qualified for the job, which
was beyond a language barrier, but also included lack of the technical and management skills.
13
Further, the Plaintiffs’ jobs could not be eliminated because they were essential to Molina’s core
14
business functions. Immediately before Plaintiffs were terminated, they were instructed to provide
15
knowledge transfer to individuals, all Indians, on how to do Plaintiffs’ jobs. Molina’s excuse of lost
16 profits and “cost-cutting” is belied by the hiring of hundreds of Indians immediately after Plaintiffs’

17 termination, all of whom were more expensive to employ than the Plaintiffs. More importantly in

18 late 2010, Molina’s HR investigated the RIF and concluded that the Plaintiffs were replaced by

19 Indian employees and contractors and that this was discriminatory.


D. Desai/Molina had a legal duty to speak the truth.
20
Molina argues that it had no legal duty to speak the truth to the Plaintiffs about their
21
termination. (See, P&A, p. 23:14-15.)
22 “Regardless of whether one is under a duty to speak or disclose facts, one who does speak
23 must speak the whole truth, and not by partial suppression or concealment make the utterance

24 untruthful and misleading.” (American Trust Company v. California Western States Life Ins. Co.

25 (1940) 15 Cal.2d 42, 65; Jimenez v. 24 Hour Fitness USA, Inc. (2015) 237 Cal.App.4th 546, 564.)
Fraudulent deceit occurs where one “willfully deceives another with intent to induce him to
26
alter his position to his injury or risk” and therefore “is liable for any damage which he thereby
27
suffers.” (Civ. Code §1709.) A deceit, within the meaning of Civil Code §1709 is (1) the suggestion,
28 13
PLAINTIFFS’ TRIAL BRIEF
as a fact, of that which is not true, by one who does not believe it to be true and (2) the suppression
1
of a fact, by one who is bound to disclose it, or who gives information of other facts which are
2
likely to mislead for want of communication of that fact. (Civ. Code §1709; Hynix Semiconductor
3
Inc. v. Rambus Inc., (2006) 441 F.Supp.2d 1066, 1075.)
4 “The duty to disclose arises when two elements are present: (1) the material fact is known to
5 (or accessible only to) the defendant; and (2) the defendant knows the plaintiff is unaware of the

6 fact and cannot reasonably discover the undisclosed fact.” (San Diego Hospice v. County Of San
Diego (1995) 31 Cal.App.4th 1048, 1054.) “A duty to disclose may also arise in the so-called ‘half
7
truth’ context—that is, when a speaker makes a representation which, though not false, he knows
8
will be misleading absent full disclosure of additional facts known to him which qualify the initial
9
representation.”. (Id. at 1054; Randi W. at 1081-1084; OCM at, 842.) An entity is deemed to have
10 knowledge of what was actually contained in the records of the entity. (See, e.g., Welsh v. State of

11 California (1983) 139 Cal.App. 3d 546, 556-557; Rodriguez v. City of Los Angeles (1963) 215 Cal.

12 App. 2d 463, 468-469.)


On point is Persson, v. Smart Inventions, Inc. (2005) 125 Cal.App.4th 1141, wherein the
13
court set aside a settlement agreement for Fraud in the Inducement because the defendant
14
misrepresented the financial prospects of the business. Factually, defendant wrote that the
15
corporation “is now in a grim state, even worse than ever, . .” Yet, one month later, the corporation
16 unveiled a new product that had been concealed from the plaintiff. (Id. at 1149.) “[I]f a defrauded

17 party is induced by false representations to execute a contract, the party has the option of rescinding

18 the contract or affirming it and recovering damages for the fraud.” (Id. at 1153.) The court held the

19 critical principle was that intentional concealment exists when a party to a transaction, who is under
no duty to speak, nevertheless does speak and suppresses facts which materially qualify the facts
20
stated. (Id. at 1165; LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 336 [nondisclosure or
21
concealment may constitute actionable fraud when the defendant makes partial representations but
22 also suppresses some material facts].)

23 Also on point is OCM Principal Opportunities Fund et al., v. CIBC World Markets
24 Corporation, where the court rejected the exact same argument presented by Molina in its MSJ, i.e.

25 that there was no duty to disclose the full facts about financial performance. The court affirmed a
jury verdict that the defendant had violated a duty owed to Plaintiffs by nondisclosure. The court
26
held that a duty to disclose can arise from the relationship such as seller-buyer, employer-employee,
27
doctor-patient, or parties entering into any kind of contractual agreement. (Emphasis Added.) (Ibid)
28 14
PLAINTIFFS’ TRIAL BRIEF
The OCM court cited to Lingsch v. Savage (1963) 213 Cal.App.3d 729, 728 fn 16: “The elements of
1
a cause of action for damages for fraud based on mere nondisclosure and involving no confidential
2
relationship would therefore appear to be the following: (1) Nondisclosure by the defendant of facts
3
materially affecting the value or desirability of the property; (2) Defendant's knowledge of such
4 facts and of their being unknown to or beyond the reach of the plaintiff; (3) Defendant's intention to

5 induce action by the plaintiff; (4) Inducement of the plaintiff to act by reason of the nondisclosure;

6 and (5) Resulting damages.” (Accord, Continental Airlines, Inc. v. McDonnell Douglas Corp.
(1989) 216 Cal. App. 3d 388, 404-405.) In OCM, elements (1) and (2) specify the factual
7
circumstances creating a duty to disclose.
8
Here, the undisputed factual circumstances created a duty to disclose. First, when
9
Desai/Molina made the representation about the reason for the RIF being bad financial performance
10 and asked for the Plaintiffs to enter into a contract as a result (releasing Molina from liability), their

11 legal duty was to disclose all facts that would not be misleading absent full disclosure of additional

12 facts known to Desai which qualify the initial representation. (San Diego Hospice v. County Of San
Diego at 1054; Randi W. at 1081-1084; OCM at, 842.) Second, as the employer of the Plaintiffs,
13
Molina owed a duty of full disclosure of all facts pursuant to the holding in OCM. Thus,
14
Desai/Molina had the legal obligation to speak the full truth or not at all.
15
Molina’s reliance on Hoffman v. 162 N.Wolfe LLC (2014) 228 Cal.App.4th 1178 is
16 misplaced. The Hoffmans alleged two fraud claims--concealment/suppression of facts, and

17 intentional misrepresentation, because the defendants had stated to the Hoffmans that they had no

18 claims or interest with respect to the 170 Wolfe property and that vehicles servicing the 162 Wolfe

19 property were crossing over onto Hoffman’s property, so defendant said he “would take care of it.”
The court affirmed the grant of summary judgment because two elements of the claims were not
20
present: (1) a duty on the part of 162 LLC to disclose that it claimed prescriptive easement rights
21
and (2) the Hoffmans’ lack of justifiable reliance on the facts as they understood them without such
22 disclosure. The case at bar is completely different from Hoffman because Molina created a contract

23 between the parties based on a false statements of fact, which justified Plaintiffs’ reliance on the

24 facts as they understood them without full disclosure.

25 Molina’s reliance on Hunter v. Up-Right, Inc. (1993) 6 Cal.4th 1174, 1184 is misplaced as
this case is distinguishable. The issue before the court was whether Foley v. Interactive Data
26
Carnation (1988) 47 Cal.3d 654 precludes recovery of tort damages for fraud and deceit predicated
27

28 15
PLAINTIFFS’ TRIAL BRIEF
on a misrepresentation made to effect termination of employment. This court sticking to the facts
1
said yes it does. Nether Hunter nor Foley address the issue of Fraud in the inducement.
2
E. Plaintiffs Have Satisfied the Essential Elements For National Origin
3
Discrimination.
4 The Second Amended Complaint (“SAC”) at paragraph 64 states that the complaint is
5 based on “[plaintiffs] national origin or ethnic origin. . . . during DESAI’S tenure as CIO, he and

6 COGNIZANT considered for employment with MOLINA individuals exclusively of Indian


descent, who were mostly males under 40 years of age. All U.S. workers were disqualified for
7
being non-Indian. DESAI systematically replaced MOLINA’S non-Indian, American citizen and
8
resident workers with COGNIZANT’S Indian contractors.” In all of the deposition testimony cited
9
by Molina from the Plaintiffs’ depositions, Plaintiffs repeat continuously that the discrimination
10 was because Molina had a preference for Indians. Being Indian is a national origin, an ethnicity,

11 and an ancestry. Thus, Plaintiffs have pled and testified, unequivocally, that Molina’s wrongful

12 conduct was based on national origin, ethnicity, ancestry as being, or not being, Indian.
More importantly, in late 2010, Molina’s HR investigated and concluded that Desai
13
discriminated against the Plaintiffs on the basis of national origin by terminating them and
14
replacing them with Indian employees and contractors. Molina argues that it fired the Plaintiffs as
15
a necessary RIF. Yet, it has yet to introduce any evidence of a need to reduce force. More
16 noticeable is the absence of any evidence of the persons who replaced the Plaintiffs – the reason

17 for this absence is because Molina knows that it replaced the Plaintiffs with Indians as is written

18 all over the Climate Survey report prepared by Molina’s own HR in 2010.

19 On the other hand, Plaintiffs have a flood of admissible evidence of national origin
discrimination, including admissions from Desai that the RIF was, in fact, a pretext to justify
20
creating an all-Indian IT Department, without any concern as to labor cost. Between 2007 and
21
2010, the diversity in the IT department disappeared and in 2010, the IT Department was 95%
22 Indian. Immediately after the RIF, over 1,100 Indian employees were hired to replace the

23 Plaintiffs. Molina paid the Indians a higher wage rate. (UDF 9.) Molina knew that the cost of

24 Indian contractors was 144% higher than the Plaintiffs and that the IT labor costs were $5.5

25 million over budget due to the Indian contractors, but hired the Indians over the non-Indians
anyway, which means that Desai’s justification for the RIF as being motivated by financial reasons
26
was a lie.
27
F. Plaintiffs Have Satisfied the Essential Elements For IIED.
28 16
PLAINTIFFS’ TRIAL BRIEF
This case is much more than a “mere” firing. Rather, it is about despicable acts of an
1
American conglomerate terminating American workers. That is outrageous. This court must deny
2
this summary judgment as the moving party has failed to carry its burden.
3
G. Plaintiffs Have Satisfied the Essential Elements For Retaliation.
4 The SAC alleges a 9th cause of action for retaliation in violation of Government Code, §
5 12940, subd. (h) and the 10th cause of action for retaliation in Labor Code section 1102.5. Molina’s
th
6 MSJ gives notice at issue 25 and 26 of challenging the 9 cause of action for retaliation, only.
Nowhere in the motion or the separate statement is notice given of the 10th cause of action
7
challenge. Thus, Molina does not challenge the 10th cause of action. Defendant’s motion is
8
meritless as the defendant admits the plaintiffs opposed HIPAA violations and reported them to
9
Molina management.
10 A claim for Retaliation under FEHA exists where (1) the plaintiff engaged in a protected
11 activity; (2) the employer subjected plaintiff to an adverse employment action; and (3) a causal

12 link exists between the protected activity and the employer's action. (Yanowitz v. L'Oreal USA,
Inc. (2005) 36 Cal.4th 1028, 1044; Lewis v. City of Benicia (2014) 224 Cal.App.4th 1519, 1533.)
13
An employee's formal or informal complaints to a supervisor regarding unlawful discrimination is
14
a “protected activity” and actions taken against the employee after such complaints may constitute
15
retaliation; it is immaterial whether the employee's complaints were well-founded. (Passantino v.
16 Johnson & Johnson Consumer Products, Inc. (9th Cir. 2000) 212 F.3d at 506-507.)

17 The causal link may be established by an inference derived from circumstantial evidence
18 such as: (1) the employer's knowledge that the employee engaged in protected activities (Jordan v.

19 Clark (9th Cir. 1988) 847 F.2d 1368, 1376; Morgan v. Regents of Univ. of Calif. (2000) 88
Cal.App.4th; (2) a pattern of conduct consistent with a retaliatory intent (e.g., hostile treatment,
20
exclusion from meetings) (Wysinger v. Automobile Club of Southern Calif. (2007) 157 Cal.App.4th
21
413, 421.) Notably, no court has held that “timing” automatically rules out causation as a matter of
22 law. While the passage of time may influence a jury’s decision, it does not establish the lack of

23 causation as many defendants “lay-in-wait” to retaliate.

24 Importantly for this case, “if a subordinate, in response to a plaintiff's protected activity,

25 sets in motion a proceeding by an independent decision-maker that leads to an adverse


employment action, the subordinate's bias is imputed to the employer if the plaintiff can prove that
26
the allegedly independent adverse employment decision was not actually independent because the
27
biased subordinate influenced or was involved in the decision or decision-making process.”
28 17
PLAINTIFFS’ TRIAL BRIEF
(Poland v. Chertoff (9th Cir. 2007) 494 F. 3d 1174, 1182; Staub v. Proctor Hosp. (2011) 562 U.S.
1
411, 422; Reeves v. Safeway Stores, Inc. (2004) 121 Cal.App. 4th 95, 100.)
2
Here, Plaintiffs engaged in multiple protected actions. They reported the various forms of
3
illegal activity including HIPAA violations and disparate treatment based on national
4 origin/ancestry. Molina failed to introduce any evidence of the passage of time in between

5 Plaintiffs’ last complaint to a supervisor and their termination.

6 Defendant’s reliance on Morgan v. Regents Of The University Of California (2000) 88


Cal.App.4th 52 is misplaced. Plaintiff was laid off in 1995 but waited until 1998 to sue the
7
employer. The trial court granted employer’s MSJ because plaintiff failed to raise any issue of
8
pretext. (Id. at 57-63.) The “passage in time” was discussed in context of a Statute of Limitations
9
issue. (Id. at 63-67.) Regarding retaliation, the court relied on federal cases ruling on federal law.
10 (Id. at 67-69.) Unlike federal court, CCP § 437c (e) does not allow a trial court to weigh evidence

11 or the credibility of a declaration submitted by the party opposing a summary judgment motion.

12 (CCP §437c(e); Mann v. Cracchilo (1985) 38 Cal.3d 18, 39; AARTS Productions Inc. v. Crocker
National Bank (1986) 179 Cal. App,. 3d 1061, 1064; Estate of Housley (1997) 56 Cal. App. 4th
13
342, 359–360). The court then cited to a federal case deciding federal law (Title VII) to create a
14
new rule that ”[t]he retaliatory motive is ‘proved by showing that plaintiff engaged in protected
15
activities, that his employer was aware of the protected activities, and that the adverse action
16 followed within a relatively short time thereafter”. No other California court has followed or

17 applied Morgan’s federal rules.

18

19 6. THE DAMAGES:

20 I. ECONOMIC DAMAGES
21 18 Plaintiffs (Aggregate) $7,500,000
Attorney Fees (Aggregate before trial) $2,442,500
22
Costs of Suit (Approximate Before Trial) $115,000.00
23 Expert Witness Fees (Before Trial) $28,000.00
TOTAL ECONOMIC LOSSES: $10,085,500
24

25

26

27

28 18
PLAINTIFFS’ TRIAL BRIEF
II. NON-ECONOMIC LOSSES
1

2 Emotional distress $10,000,000

3 TOTAL LOSSES: $20,085,500

4
III. PUNITIVE DAMAGES TBD
5

7
DATED: April 30, 2019 LAW OFFICES OF REGINA ASHKINADZE
8

10 By:
Regina Ashkinadze
11 Attorneys for Plaintiffs and Cross-Defendants

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PLAINTIFFS’ TRIAL BRIEF