Nevarez-Bustillos v. O.P.A. Inc. et al
ORDER denying 23 Defendants' Second Motion to Dismiss Plaintiff's Complaint Pursuant to Fed. R. Civ. P. 12(b)(6), or in the Alternative, Motion for Summary Judgment, by Judge Lewis T. Babcock on 6/19/2017. (ebuch)
Case 1:16-cv-02992-LTB Document 31 Filed 06/19/17 USDC Colorado Page 1 of 6
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Lewis T. Babcock, Judge
Civil Action No. 16-cv-02992 - LTB
RICARDO JAVIER NEVAREZ - BUSTILLOS,
O.P.A. INC. and MARK OBROCHTA,
This case is before me on Defendants’ Second Motion to Dismiss Plaintiff’s
Complaint Pursuant to Fed. R. Civ. P. 12(b)(6), or in the Alternative, Motion for
Summary Judgment [Doc # 23]. After consideration of the motion, all related
pleadings, and the case file, I deny Defendants’ motion pursuant to Fed. R. Civ. P.
In this action, Plaintiff’s Amended Complaint asserts a single claim for
unpaid overtime compensation pursuant to the Fair Labor Standards Act (the
“FLSA”), 28 U.S.C. § 201, et seq., based on his employment at Uncle Pizza in
Glenwood Springs, Colorado from 2007/2008 to May 16, 2016. Defendant O.P.A.,
Inc. (“O.P.A.”) operates Uncle Pizza, and Defendant Mark Obrochta (“Obrochta”) is
the sole owner of O.P.A.
Defendants argue that Plaintiff’s claim under the FLSA fails because Uncle
Pizza des not have the requisite $500,000 minimum annual gross volume of sales to
establish enterprise liability under the FLSA. 29 U.S.C. § 203(s)(1)(a)(ii). My
discussion of the facts will therefore be limited to those pertinent to a determination
of this issue.
Case 1:16-cv-02992-LTB Document 31 Filed 06/19/17 USDC Colorado Page 2 of 6
In support of their motion, Defendants have filed an affidavit from Obrochta.
In this affidavit, Obrochta asserts that he is responsible for entering and
maintaining all of Uncle Pizza’s financial information and that Uncle Pizza’s gross
sales volume was less than $500,000 for every 12 month period from 2013 through
May 16, 2016. See Doc # 25, ¶¶ 9-10. To support this assertion, Uncle Pizza’s
federal tax return for the years 2013, 2014, and 2015, and its profit and loss
statement from January 1, 2016 through May 16, 2016 are attached to Obrochta’s
affidavit. Id. at Ex. A.
To counter Obrochta’s affidavit, Plaintiff’s Amended Complaint includes the
While employed by Defendants, Plaintiff worked 7 days a week at the
Glenwood Springs Uncle Pizza. Doc # 21, ¶¶ 10, 15-17.
Uncle Pizza employees, including Plaintiff, would record pizza orders
in a book that produced three carbon copies for each order. The pink
carbon copies were kept for bookkeeping purposes. Id. at ¶¶ 23-28.
At the end of each of his evening shifts, Plaintiff was responsible for
counting the money received and the number of order tickets written
that evening at the Glenwood Springs Uncle Pizza and recording this
information on a form. Id. at ¶¶ 29-30. Plaintiff would place the
completed form plus all cash, order tickets, and receipts in Uncle
Pizza’s safe. Id. at ¶ 31.
Plaintiff estimates that Uncle Pizza was paid in cash for 40 - 60% of its
food sales during the evening shift. Id. at ¶ 33.
Plaintiff asserts that he witnessed Obrochta shredding the pink copies
of order tickets on numerous occasions, leading him to believe that
Obrochta was pocketing the money from the cash sales instead of
reporting it in Defendants’ books or depositing it in a bank account. Id.
at ¶ 34. Plaintiff also asserts that he overheard a conversation
between Obrochta and his former business partner about “hiding cash”
and that Defendants paid several employees in cash. Id. at ¶¶ 35 &
As a result of the money that he received and counted every evening at
the Glenwood Springs Uncle Pizza, Plaintiff believes that Defendants
received at least $500,000 in gross receipts annually. Id. at ¶ 38.
Plaintiff has attached an affidavit to his response to Defendants’ motion that
Case 1:16-cv-02992-LTB Document 31 Filed 06/19/17 USDC Colorado Page 3 of 6
asserts these same facts with some additional detail. See Doc #27, Ex. A.
II. Standard of Review
Defendants seek the dismissal of Plaintiff’s Amended Complaint pursuant to
either Fed. R. Civ. P. 12(b)(6) or, alternatively, Fed. R. Civ. P. 56. The appropriate
standard of review depends on my consideration of the affidavits and other
documents outside the pleadings submitted by the parties.
“[I]n general, a motion to dismiss should be converted to a summary
judgment motion if a party submits, and the district court considers, materials
outside the pleadings.” Prager v. LaFaver, 180 F.3d 1185, 1188 (10th Cir. 1999).
There are limited exceptions to this rule for (1) documents that the complaint
incorporates by reference; (2) documents referred to in the complaint if the
documents are central to the plaintiff's claim and the parties do not dispute the
documents’ authenticity; and (3) matters of which a court may take judicial notice.
Gee v. Pacheco, 627 F.3d 1178, 1186 (10th Cir. 2010) (citations and internal
quotation marks omitted). Because the affidavits and other financial documents
document submitted by the parties do not fall within any of these exceptions,
Defendants’ motion is properly considered as one for summary judgment under Rule
Rule 56 provides that summary judgment shall be granted if the pleadings,
depositions, answers to interrogatories, admissions, or affidavits show that there is
no genuine issue of material fact and the moving party is entitled to judgment as a
matter of law. Fed. R. Civ. P. 56(c). A party seeking summary judgment bears the
initial responsibility of informing the district court of the basis for its motion, and
identifying those portions of the pleadings, depositions, interrogatories, and
admissions on file together with affidavits, if any, which it believes demonstrate the
absence of genuine issues for trial. Celotex, 477 U.S. at 323; Mares v. ConAgra
Case 1:16-cv-02992-LTB Document 31 Filed 06/19/17 USDC Colorado Page 4 of 6
Poultry Co., Inc., 971 F.2d 492, 494 (10th Cir. 1992). Once a properly supported
summary judgment motion is made, the opposing party may not rest on the
allegations contained in his complaint, but must respond with specific facts showing
the existence of a genuine factual issue to be tried. Otteson v. United States, 622
F.2d 516, 519 (10th Cir. 1980); Fed. R. Civ. P. 56(e). To defeat a motion for
summary judgment, evidence, including testimony, must be based on more than
mere speculation, conjecture, or surmise. Bones v. Honeywell Int’l, Inc., 366 F.3d
869, 875 (10th Cir. 2004).
If a reasonable juror could not return a verdict for the non-moving party,
summary judgment is proper and there is no need for a trial. Celotex, 477 U.S. at
323. The operative inquiry is whether, based on all documents submitted,
reasonable jurors could find by a preponderance of the evidence that the plaintiff is
entitled to a verdict. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986).
However, summary judgment should not enter if, viewing the evidence in a light
most favorable to the nonmoving party and drawing all reasonable inferences in
that party’s favor, a reasonable jury could return a verdict for that party.
Anderson, 477 U.S. at 252; Mares, 971 F.2d at 494.
FLSA enterprise liability requires, among other things, that the employer
have an annual gross volume of sales of not less than $500,000. 29 U.S.C. §
203(s)(1)(a)(ii). Obrochta’s affidavit and the attached Uncle Pizza 2013-2015 federal
tax returns and 2016 profit and loss statement provide strong evidence that Uncle
Pizza did not meet this threshold in any of the years that Plaintiff alleges that he
was not paid overtime. See Doc # 21, ¶ 20 (“For the past three years, [Plaintiff]
averaged 61 hours per week in his employment with Defendants.”). See also 29
U.S.C. § 255(a) (establishing three-year statute of limitations for willful violation of
Case 1:16-cv-02992-LTB Document 31 Filed 06/19/17 USDC Colorado Page 5 of 6
the FLSA). The question is therefore whether Plaintiff’s allegations that
Defendants were underreporting Uncle Pizza’s cash receipts are sufficient to create
a genuine issue of material fact as to whether Uncle Pizza meets FLSA’s threshold
for enterprise liability despite Defendants’ evidence to the contrary.
Viewing the evidence in the light most favorable to Plaintiff, I conclude that
it would be premature to enter summary judgment in Defendants’ favor on the
issue of whether Uncle Pizza satisfies the $500,000 gross volume of sales threshold
for FLSA enterprise liability. First, unlike the employer in some of the cases cited
by Defendants, Uncle Pizza’s own financial documents demonstrate that it was very
close to, i.e. within $20,000 of, meeting FLSA’s $500,000 threshold in each of the
relevant years. Compare Arilus v. Jospeh A. DiEmmanuele, Jr., Inc., 895 F. Supp.
2d 1257, 1262 (S.D. Fla. 2012) (plaintiffs’ speculative beliefs not based on direct
knowledge or experience with the financial practices of the business did not raise
question of material fact that Defendants had unreported gross receipts of more
than $70,000 in 2007, more than $136,000 in 2008, or more than $248,000 in 2009);
Lopez v. Top Chef Inv., Inc., 2007 WL 4247646 at * 3 (S.D. Fla. Nov.30, 2007)
(conclusory assertion by plaintiff who only worked in kitchen as a cook that
defendant understated their income on their federal tax return by over $440,000
insufficient to defeat summary judgment motion on enterprise liability).
In addition, while his credibility may be a matter of dispute, Plaintiff has
averred that he was personally responsible for counting the money earned during
every evening shift at the Glenwood Springs Uncle Pizza during his employment
there and that he has personal knowledge of behavior by Obrochta that supports his
assertion that Uncle Pizza was underreporting the cash that it received. Plaintiff’s
involvement with the finances of Uncle Pizza also distinguishes this case from legal
authority cited by Defendants. Compare Arilus, supra; Lopez, supra.
Case 1:16-cv-02992-LTB Document 31 Filed 06/19/17 USDC Colorado Page 6 of 6
Although Plaintiff’s evidence regarding Uncle Pizza’s gross annual volume of
sales is relatively weak, I conclude that it is nonetheless sufficient at this stage in
the proceedings where Plaintiff has not had an opportunity to conduct discovery to
bolster his contention that Uncle Pizza qualifies for FLSA enterprise liability. See
Ramos v. Goodfellas Brooklyn’s Finest Pizzeria, 2008 WL 4613059 at *3 (S.D. Fla.
Oct. 15, 2008) (denying defendants’ motion for summary judgment without
prejudice and allowing plaintiff to conduct discovery to develop evidence that
defendants qualified as an enterprise for FLSA purposes). By the same token,
discovery may bolster Defendants’ contention that Plaintiff’s allegations regarding
Uncle Pizza’s annual gross volume of sales are without merit. In any event,
Defendants are not entitled to summary judgment that Uncle Pizza does not qualify
for FLSA enterprise liability at present.
For the reasons set forth above, IT IS HEREBY ORDERED that
1. Defendants’ Second Motion to Dismiss Plaintiff’s Complaint Pursuant to
Fed. R. Civ. P. 12(b)(6), or in the Alternative, Motion for Summary Judgment [Doc #
23] is DENIED pursuant to Fed. R. Civ. P. 56; and
2. Nothing in this Order shall preclude Defendants from filing a subsequent
dispositive motion on the issue of their enterprise liability under FLSA if
19 , 2017 in Denver, Colorado.
BY THE COURT:
s/Lewis T. Babcock
LEWIS T. BABCOCK, JUDGE
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?