Martinez et al v. Red's Towing

Filing 69

ORDER by Magistrate Judge Kristen L. Mix on 3/23/15.Fed. R. Civ. P. 12(b)(1) Motion to Dismiss # 50 is DENIED.(lgale, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 14-cv-00458-KLM
LEONARD MARTINEZ,
DOUG PATRICK,
SAMANTHA PATRICK,
DEVIN QUINTANA,
SCOTT ROSENBAUM,
STEVEN ROSENBAUM,
JOSEPH VIALPANDO,
MICHAEL WOLFE,
DENNIS GREGORY,
FRANCISCO MEDINA, and
SCOTTIE LEE WRAY,
Plaintiffs,
v.
RED’S TOWING,
Defendant.
_____________________________________________________________________
ORDER
_____________________________________________________________________
ENTERED BY MAGISTRATE JUDGE KRISTEN L. MIX
This matter is before the Court on Defendant’s Fed. R. Civ. P. 12(b)(1) Motion to
Dismiss [#50]1 (the “Motion”). Plaintiffs Michael Wolfe (“Wolfe”) and Leonard Martinez
(“Martinez”) filed a Response [#52] in opposition to the Motion, and Defendant filed a Reply
[#56]. For the reasons set forth below, the Motion [#50] is DENIED.
I. Background
On November 2, 2014, Plaintiffs filed a Notice of Acceptance of Offer of Judgment

1

“[#50]” is an example of the convention the Court uses to identify the docket number
assigned to a specific paper by the Court’s case management and electronic case filing system
(CM/ECF). The Court uses this convention throughout this Order.

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[#32], stating that all Plaintiffs except Mr. Martinez and Mr. Wolfe accepted Defendant’s
Offer of Judgment [#32-1]. The Offer of Judgment states in relevant part:
Defendant, Red’s Towing, by its undersigned attorney, pursuant to Fed. R.
Civ. P. 68, respectfully submits the following offer of judgment:
1. The sum of $370.44 plus an equal amount as liquidated damages, for a
total of $740.88 to Plaintiff Leonard Martinez.
...
8. The sum of $1,409.46 plus an equal amount as liquidated damages, for a
total of $2,818.92 to Plaintiff Michael Wolfe.
...
13. Defendant agrees to pay all costs incurred by Plaintiffs up to and
including the date of this offer.
14. Defendant agrees to pay all reasonable and necessary attorney fees, as
determined by the Court, incurred by Plaintiffs up to and including the date
of this offer.
15. Defendant believes this offer compensates Plaintiffs with the maximum
amount they could recover under the law. Defendant's offer is in exchange
for the settlement of all Plaintiffs' claims against Defendant, and dismissal,
with prejudice, of the above-captioned lawsuit. The offer shall be withdrawn
if not accepted within 14 days of service.
Offer of Judgment [#32-1].2 In the present Motion, “Defendant moves to dismiss the claims
of Plaintiffs Martinez and Wolfe as moot because Defendant’s Offer of Judgment presented
Plaintiffs with the maximum recovery of overtime that they could obtain under their FLSA
claims.” [#50] at 4.
II. Standard
A motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(1) attacks a court's subject

2

Although the Offer of Judgment states that it concerns “all Plaintiffs’ claims against
Defendant,” the parties have proceeded on the understanding that the acceptance of the Offer of
Judgment is valid as to only nine of the eleven Plaintiffs.

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matter jurisdiction. The determination of a court's jurisdiction over the subject is a threshold
question of law. Madsen v. United States ex. rel. United States Army Corps of Eng'rs, 841
F.2d 1011, 1012 (10th Cir. 1987). The objection that a federal court lacks subject matter
jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1) may be raised by a party, or by a court on
its own initiative, at any stage in the litigation. Arbaugh v. Y & H Corp., 546 U.S. 500, 506
(2006). If at any time, the Court determines that it lacks subject matter jurisdiction, the
Court must dismiss the action. Fed. R. Civ. P. 12(h)(3); Arbaugh, 546 U.S. at 506.
Mootness is an issue of subject matter jurisdiction, which can be raised at any stage
of the proceedings. Kennedy v. Lubar, 273 F.3d 1293, 1301-02 (10th Cir. 2001). This
Court has no jurisdiction to consider moot cases, that is, cases in which “the issues
presented are no longer ‘live’ or the parties lack a legally cognizable interest in the
outcome.” United States Parole Comm'n v. Geraghty, 445 U.S. 388, 396 (1980) (citation
omitted). “It is a basic principle of Article III that a justiciable case or controversy must
remain extant at all stages of review, not merely at the time the complaint is filed.” Deberry
v. Davis, 460 F. App’x 796, 799 (10th Cir. 2012) (internal quotations and citation omitted).
A claim may become moot at any point in the controversy and deprive the Court of
authority to decide questions which had previously been at issue. Lewis v. Cont'l Bank
Corp., 494 U.S. 472, 477–78 (1990). “[I]t is therefore not enough that the dispute was alive
when the suit was filed; the parties must continue to have a personal stake in the outcome.”
McLendon v. City of Albuquerque, 100 F.3d 863, 867 (10th Cir. 1996).
III. Analysis

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Regarding the mootness issue,3 Defendant primarily cites to case law predating the
United States Supreme Court decision in Genesis Healthcare Corp. v. Symczyk, 133 S. Ct.
1523 (2013), and subsequent cases from the District of Colorado analyzing the
consequences of that decision. See Delgado v. Castellino Corp., No. 13-cv-03379-MSKMJW, 2014 WL 4339232 (D. Colo. Sept. 2, 2014); Perez v. Pinon Mgmt., Inc., No. 12-cv00653-RM-MEH (D. Colo. Nov. 4, 2014); Witt v. GC Servs. Ltd. P’ship, No. 13-cv-02834RBJ-CBS, 2015 WL 273838 (D. Colo. Jan. 20, 2015).4 Chief Judge Krieger thoroughly
explained in Delgado v. Castellino Corp., 2014 WL 4339232, at *1-2, that non-acceptance
of a defendant’s offer of settlement in the full amount of the plaintiffs’ possible recovery
does not render the plaintiffs’ claim moot. As Judge Jackson later succinctly summarized:
[T]he Court agrees . . . that the dissenting opinion in Genesis Healthcare,
which finds that non-acceptance does not moot a plaintiff's claim, is the better
reasoned approach. I pause to add that in this respect the dissent did not
disagree with a position taken by a majority of the Supreme Court, but
instead addressed a question that the majority declined to confront. As the
court explained in Delgado, “four members of the dissent have indicated, in
stark and unflinching terms, that they absolutely reject the notion that an
unaccepted Offer of Judgment can operate to moot a plaintiff's claim.” 2014
WL 4339232 at *3. On the other hand, “the majority merely assumes the
applicability of a doctrine that the dissent so vigorously rejects, never actually
endorsing it.” Id. (emphasis in original). The Delgado order also expands on
the Tenth Circuit Lucero [v. Bureau of Collection Recovery, Inc., 639 F.3d
1239, 1243 (10th Cir. 2011),] opinion, explaining that it “expresses only
lukewarm enthusiasm for the [mootness-by-unaccepted-offer] doctrine,
acknowledging only that ‘other circuits have concluded’ that a sufficient offer
activates the mootness doctrine.” Id. (quoting Lucero, 639 F.3d at 1243).
This Court agrees with Chief Judge Krieger's analysis. Given the weight of
the statements of four justices of the Supreme Court alongside the failure of
the Tenth Circuit to ever expressly adopt the mootness-by-unaccepted-offer
3

Regarding this portion of the analysis, the Court assumes that Defendant has made an
offer of judgment to Plaintiffs Martinez and Wolfe that would provide them with the full amount of
their potential recovery. This issue is addressed more fully below.
4

The Court acknowledges that Witt v. GC Services Limited Partnership was issued after
the present Motion was fully briefed.

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doctrine, the Court errs on the side of caution and finds that Ms. Witt's claims
are not moot.
Witt, 2015 WL 273838, at *2.
As noted, the Tenth Circuit has never directly addressed the mootness-byunaccepted-offer doctrine, and last indirectly addressed the doctrine in a 2011 opinion.
See Lucero, 639 F.3d at 1243. Justice Kagan explained in her 2013 Genesis Healthcare
dissenting opinion that “a case becomes moot only when it is impossible for a court to grant
any effectual relief whatever to the prevailing party. By [this] measure[ ], an unaccepted
offer of judgment cannot moot a case. . . . [Rule 68] prohibits a court from considering an
unaccepted offer for any purpose other than allocating litigation costs—including for the
purpose of entering judgment for either party. . . . The Rule provides no appropriate
mechanism for a court to terminate a lawsuit without the plaintiff's consent.” Genesis
Healthcare, 133 S. Ct. at 1533, 1536 (Kagan, J., dissenting) (internal quotation marks and
citations omitted). Having considered the 2013 opinions in Genesis Healthcare and the
subsequent trend in this District as embodied by Delgado, Perez, and Witt,5 the Court
agrees with Plaintiffs Martinez and Wolfe that their claims are not moot simply because
they did not accept a Rule 68 offer of judgment that purportedly would afford them full relief
on their claims. Response [#52] at 4.
In the alternative, Defendant “requests that [the Court] enter judgment in favor of
Plaintiffs [Martinez and Wolfe] in the amounts delineated in the Offer of Judgment.” Motion

5

The Court acknowledges that there is a split in this District regarding this issue. Judge
Daniel in Jacobson v. Credit Control Services, Inc., No. 13-cv-03307-WYD-MJW, 2014 WL
4636449, at *2 (D. Colo. Sept. 17, 2014), determined that “when an Offer of Judgment
unequivocally offers a plaintiff all the relief she sought to obtain, the offer renders the plaintiff’s
action moot.” The analysis, however, did not consider the consequences of the Supreme Court’s
decision in Genesis Healthcare.

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[#50] at 6 n.4. In Miranda v. Receivables Performance Management, LLC, No. 12-cv02507-MSK-MJW, 2013 WL 3958367, at *2 (D. Colo. Aug. 1, 2013), Chief Judge Krieger
reasoned that “[r]egardless of whether [the plaintiff] had good cause to refuse the offer as
tendered, if the offer is deemed reformed to propose complete relief, there can be no
cognizable reason for [the plaintiff] to refuse it.” She concluded that, “[i]n order to cure any
mistakes made by either party without further belaboring this action or causing additional
unproductive expenditure of attorney time, the Court will deem [the defendant’s] offer to
constitute an offer of $1,001 in statutory damages, costs, and a reasonable attorney’s fee,
and further deems [the plaintiff] to have accepted it.” Id. Chief Judge Krieger than entered
judgment in favor of the plaintiff on those terms. Id.
Similarly, in Witt v. GC Services Limited Partnership, 2015 WL 273838, at *2, Judge
Jackson relied on Miranda and Genesis Healthcare to determine that, even though the
plaintiff’s claims were not rendered moot by her failure to accept an offer of judgment that
provided for full relief:
[I]n the circumstances presented here, the Court declines to permit Ms. Witt's
claims to move forward to trial. A court has discretion to halt a lawsuit by
entering judgment for the plaintiff when the defendant unconditionally
surrenders and only the plaintiff's obstinacy or madness prevents her from
accepting total victory. Regardless of whether Ms. Witt had good cause to
refuse the offer as tendered, if the Court remedies the alleged defects so that
the offer proposes complete relief, there can be no arguable reason for Ms.
Witt to refuse to accept it. As such, the Court deems GC Services' offer to
constitute an offer of $1000 in statutory damages, costs, and a reasonable
attorney's fee. The Court further deems Ms. Witt to have accepted it. The
Court will enter judgment in favor of Ms. Witt on those terms.
(internal citations and quotation marks omitted).
The circumstances in the present case differ somewhat from those in Miranda and
Witt. Each of those cases involved claims with a statutory cap on damages under the Fair

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Debt Collection Practices Act. Calculation of damages in the present matter, which
primarily asserts claims under the Fair Labor Standards Act, is of a more nuanced nature,
because there is not a similar statutory cap on damages. Further, the Second Amended
Complaint [#21] does not contain a demand for a specific dollar amount with which to
compare the amounts offered by Defendant to Plaintiffs Martinez and Wolfe. Although
Defendant argues that the evidence supports its assertion that it has offered the maximum
amount Plaintiffs can recover, Plaintiffs contest this assertion and argue that the present
evidence and uncompleted discovery demonstrates otherwise. The Court is not inclined
to enter judgment as in Miranda or Witt under these differing circumstances. Determining
the maximum amount of damages to which Plaintiffs Martinez and Wolfe are entitled is an
issue better suited for summary judgment motions practice (if Defendant is correct that
there is no issue of material fact) or for the trier of fact (if Plaintiffs Martinez and Wolfe are
correct that there is or will be an issue of material fact upon the completion of discovery).
IV. Conclusion
Based on the foregoing,
IT IS HEREBY ORDERED that the Motion [#50] is DENIED.

Dated: March 23, 2015

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