Stallworth v. Imani Environmental Group, Inc.

Filing 21

MEMORANDUM OPINION AND ORDER directing that on the default judgment, Plaintiff is awarded $15,750 for back pay, $15,750 for front pay, $10,000 in compensatory damages, $3,277.50 for attorney's fees, and $376.01 for costs. A separate judgment shall be entered. The Clerk of the Court is DIRECTED to close this case. Signed by Chief Judge William Keith Watkins on 11/5/13. (Attachments: # 1 Civil Appeals Checklist)(scn, )

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
NORTHERN DIVISION
FRED STALLWORTH,
Plaintiff,
v.
IMANI ENVIRONMENTAL
GROUP, INC.,
Defendant.

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CASE NO. 2:12-CV-814-WKW
[WO]

MEMORANDUM OPINION AND ORDER
In May 2013, Plaintiff Fred Stallworth obtained a default judgment against
his former employer, Imani Environmental Group, Inc., on his claims brought
under Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e to 2000e–17,
and state law. The default judgment was entered on the issue of liability, with the
issue of damages reserved. There are two interrelated matters pending in this
action. The first involves the impact on this action of a bankruptcy petition filed
by Defendant’s chief executive officer.

The second concerns the amount of

damages to be awarded on the default judgment. The court addresses each matter
in turn.
A.

The Automatic Stay: 11 U.S.C. § 362(a)
On May 9, 2013, Plaintiff notified the court that on May 2, 2013,

Defendant’s chief executive officer, Sabrina D. Moore, filed a Chapter 7

bankruptcy petition in the United States Bankruptcy Court for the Northern District
of Georgia, and listed Plaintiff as a creditor in an unknown amount based upon this
lawsuit and Defendant as a co-debtor in Schedule H of the bankruptcy petition.
(See Docs. # 17-6, 17-7 (Bankruptcy Record).) Plaintiff observed that the Chapter
7 filing “may require a stay” pursuant to 11 U.S.C. § 362(a). (Doc. # 17, at 1.)
The court ordered further briefing on whether the automatic stay provisions of
§ 362(a) extended to this action against the debtor’s corporation (i.e., Imani
Environmental Group, Inc.), and Plaintiff complied.
Section 362(a)’s automatic stay does not apply to Defendant. The general
rule is that the automatic stay in a bankruptcy case protects only the debtor and not
parties who are liable alongside the debtor. See Credit Alliance Corp. v. Williams,
851 F.2d 119, 121 (4th Cir. 1988). Defendant is not a party to Ms. Moore’s
Chapter 7 bankruptcy case, but rather is included in Schedule H as an entity “that
is also liable on any debts listed by the debtor.” (Doc. # 17-7, at 44.) The court is
aware of no authority and none has been cited that would deem Defendant a party
in Ms. Moore’s bankruptcy case and bring it within the protections of the
automatic stay.

Indeed, there is authority that a corporation cannot join an

individual in filing a Chapter 7 bankruptcy petition. See In re Calhoun, 312 B.R.
380, 383 (Bankr. N.D. Iowa 2004) (declining to extend the automatic stay to a
chapter 7 debtor’s limited liability company because there is “[n]o provision in the

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Code [permitting] an individual and a business to file jointly”). Moreover, at no
time has Defendant or Ms. Moore asked this court for an extension of the
automatic stay or suggested that a stay is appropriate. Rather, Ms. Moore merely
has notified the court that Defendant “is no longer in operation” and “is not in a
position to hire an attorney for this case.” (Doc. # 20, at 1.) Finally, as noted in a
prior Order (Doc. # 18), the Second Circuit has recognized that in limited
circumstances § 362(a) can reach a non-bankrupt, third party.

However, no

representation or argument has been made that a failure to extend the stay to
Plaintiff’s action against Defendant would have “an immediate adverse economic
consequence for the debtor’s estate.” Queenie, Ltd. v. Nygard Int’l, 321 F.3d 282,
287 (2d Cir. 2003).

Hence, there is no factual basis for finding Queenie’s

exception applicable.
Accordingly, the automatic stay resulting from Ms. Moore’s bankruptcy case
does not foreclose further proceedings in this case. The court, thus, proceeds to the
issue of damages on the default judgment.
B.

Default Judgment Damages
On May 6, 2013, the court entered a default judgment on the issue of

liability against Defendant, ordered briefing on the issue of damages, and set an
evidentiary hearing. (Doc. # 16.) Plaintiff submitted a brief and evidence on
damages (Doc. # 18), but later withdraw his request for an evidentiary hearing.

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(See Doc. # 19 ¶ 5 (Based upon the “high probability that Defendant . . . has no
assets for Plaintiff to collect,” Plaintiff “withdraws his request for a hearing on
damages” and relies solely on his previously filed affidavit.).)
A court should not award money damages “without a hearing unless the
amount claimed is a liquidated sum or one capable of mathematical calculation.”
Adolph Coors Co. v. Movement Against Racism & the Klan, 777 F.2d 1538, 1543
(11th Cir. 1985). While the Eleventh Circuit has stated that “[a]n evidentiary
hearing is not a per se requirement,” it has emphasized that “such hearings are
required in all but ‘limited circumstances,’ as when the district court already has a
wealth of evidence from the party requesting the hearing, such that any additional
evidence would be truly unnecessary to a fully informed determination of
damages.” S.E.C. v. Smyth, 420 F.3d 1225, 1232 n.13 (11th Cir. 2005) (citation
and internal quotation marks omitted).
On his Title VII claims, Plaintiff requests back pay in the amount of
$15,750, prejudgment interest, front pay in the amount of $15,750, compensatory
damages for mental anguish “between the amount of $15,750 and $50,000” as the
court “sees fit,” and punitive damages “not [to] exceed $50,000.” (Doc. # 17, at 2–
11.) On his state-law claims, Plaintiff admits he “cannot double dip his lost wages
. . . or an award of compensatory damages,” but he says that “[s]hould the court
award punitive damages for [Defendant’s] negligent behavior, Plaintiff requests

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such an award not [to] exceed three times his back pay of $15,750, combined with
whatever the Court may award for Title VII mental anguish damages.” (Doc. # 17,
at 11.) Plaintiff also requests $3,277.50 in attorney’s fees and $376.01 in costs.
(Doc. # 17, at 11–12.) The record contains a sufficient basis for awarding damages
for back pay, front pay, compensatory damages, attorney’s fees, and costs, but not
for awarding prejudgment interest and punitive damages.
1.

Back Pay Under Title VII

Title VII permits “reinstatement or hiring of employees, with or without
back pay . . . , or any other equitable relief as the court deems appropriate.” 42
U.S.C. § 2000e-5(g)(1). “Successful Title VII claimants . . . are presumptively
entitled to back pay.” Lathem v. Dep’t of Children & Youth Servs., 172 F.3d 786,
794 (11th Cir. 1999). “Back pay is the difference between the actual wages earned
and the wages the individual would have earned in the position that, but for the
discrimination, the individual would have attained.”

Akouri v. Fla. Dep’t of

Transp., 408 F.3d 1338, 1343 (11th Cir. 2005) (citation and internal quotation
marks omitted).
Plaintiff’s declaration provides a reasonable basis from which to calculate
back pay. It provides that Plaintiff worked for Defendant fifty hours per week at
an hourly rate of $10.50 for forty hours and an overtime hourly rate of $15.75 for
ten additional hours. Plaintiff requests back pay from the date of his wrongful

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termination – April 19, 2011 – through December 31, 2011. Plaintiff selects the
ending date based upon his “information and belief” that Defendant ceased
Alabama operations “at the end of December 2011.” (Pl.’s Decl. ¶ 6.) He requests
back-pay wages for this period of approximately thirty-six weeks.
Based upon the foregoing evidence, Plaintiff’s unmitigated back pay is
calculated as follows: ($10.50 per hour × 40 hours a week) + ($15.75 per hour ×
10 hours per week) × 36 weeks = $20,790. Plaintiff submits further evidence that
his interim earnings totaled $5,040.

(Pl.’s Decl. 2.)

Deducting the interim

earnings from $20,790, the court finds that a back-pay award of $15,750 is
appropriate.
2.

Front Pay Under Title VII

Additionally, “prevailing Title VII plaintiffs are presumptively entitled to
either reinstatement or front pay.” Weaver v. Casa Gallardo, Inc., 922 F.2d 1515,
1528 (11th Cir. 1991) (superseded by statute on other grounds).

Given that

Defendant is no longer in business, reinstatement is not a viable option. The court
finds that Plaintiff’s request for front pay in the amount of $15,750 is a reasonable
award for future lost earnings and that Plaintiff has provided an adequate
evidentiary basis for such entitlement. Front pay in the amount of $15,750 will be
awarded.

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3.

Prejudgment Interest

Whether to award prejudgment interest rests within the sound discretion of
the district court. “There is no federal statute mandating the prejudgment interest
rate, and therefore the Court also has the discretion to determine the rate of
interest.” Soliday v. 7-Eleven, Inc., No. 09cv807, 2011 WL 4949652, at *3 (M.D.
Fla. Oct. 17, 2011). Plaintiff has pointed out the discretionary nature of such an
award; however, because he has not requested any particular rate or calculated an
amount based upon that rate, the request for prejudgment interest will be denied.
4.

Punitive Damages Under Title VII

Plaintiff asks for punitive damages under Title VII. These damages are not
susceptible of mathematical calculation, and it is not clear from the record whether
an award of punitive damages is justified and, if so, in what amount. Plaintiff has
failed to offer sufficient evidence from which a determination of punitive damages
can be made. The court declines to grant Plaintiff punitive damages on this record
and in the absence of an evidentiary hearing.
5.

Compensatory Damages Under Title VII & State Law

Plaintiff asks for compensatory damages for mental anguish “between the
amount of $15,750 and $50,000” as the court “sees fit,” but does not ask for a
double recovery of such damages under both federal and state law. (Doc. # 17,
at 2.) Based upon Plaintiff’s declaration, the court finds that an award of $10,000

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in compensatory damages for mental anguish is appropriate under either Title VII
or state law and is not a double recovery.
6.

Punitive Damages Under State Law

Plaintiff suggests that an award of punitive damages may be appropriate on
his state-law claims for negligent retention and negligent supervision.

Under

Alabama law, “[a] finding . . . that [an employer] was only negligent in . . .
supervising . . . and retaining [an employee] would not warrant an award of
punitive damages.” CP & B Enters., Inc. v. Meller, 62 So. 2d 356, 363 (Ala.
2000). “‘Punitive damages are not recoverable for simple negligence, but the
recovery in such case is for compensatory damages.’” Id. (quoting Bradley v.
Walker, 93 So. 634, 635 (1922)).

Based on this authority, Plaintiff has not

demonstrated that he is entitled to punitive damages on his negligence claims.
Punitive damages will not be awarded on the state-law claims.
7.

Attorney’s Fees & Costs

In its discretion, a court may award attorney’s fees to the prevailing party in
a Title VII action. See 42 U.S.C. § 2000e–5(k). The court calculates attorney’s
fees based upon the lodestar method. See Perdue v. Kenny A. ex rel. Winn, 559
U.S. 542, 546 (2010). Plaintiff’s counsel has submitted a detailed invoice for his
fees in representing Plaintiff in this action. (Doc. # 17-2.) Based upon the time
record, the court finds that Plaintiff’s attorney’s requested hourly rate is

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reasonable.1

The court also finds that the hours billed by the attorney are

reasonable and are not “excessive, redundant, or otherwise unnecessary.” Am.
Civil Liberties Union v. Barnes, 168 F.3d 423, 428 (11th Cir. 1999) (citation and
internal quotation marks omitted). The attorney’s fees award will be $3,277.50.
Plaintiff also properly supports his requests for costs for postage and the filing fee,
and those costs totaling $376.01 will be awarded.
C.

Conclusion
Based on the foregoing, it is ORDERED that on the default judgment,

Plaintiff is awarded $15,750 for back pay, $15,750 for front pay, $10,000 in
compensatory damages, $3,277.50 for attorney’s fees, and $376.01 for costs. A
separate judgment shall be entered.
The Clerk of the Court is DIRECTED to close this case.
DONE this 5th day of November, 2013.

/s/ W. Keith Watkins
CHIEF UNITED STATES DISTRICT JUDGE

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Following the practice of this district, the court applies these rates for purposes of this
fee petition only.
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