Maglione-Chenault v. Douglas Realty & Development, Inc.
Filing
25
ORDER granting in part and denying in part 20 Plaintiff Lisa Maglione-Chenault and Third Party Defendants Gulfstyle Realty, Inc. and Dorothy Young's Motion to Dismiss Counterclaims and Third Party Complaint and Motion to Strike Affirmative De fenses. a. The counterclaims and third-party complaint are DISMISSED without prejudice. b.Motion to Strike first and second affirmative defenses is DENIED. The Court will treat these affirmative defenses as a denial. c. Motion to Strike third affir mative defense is GRANTED. d. Motion to strike claims for punitive damages is DENIED as moot. 2. Defendant Douglas Realty is directed to file and serve an amended answer, counterclaims, and affirmative defenses in accordance to this order no later than April 23, 2014. 3. The Clerk is directed to terminate Defendants A&J Consulting Inc., Gulfstyle Realty, Inc. and Dorothy Young from this matter. Signed by Judge Sheri Polster Chappell on 4/9/2014. (LMF)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
LISA MAGLIONE-CHENAULT, an
individual
Plaintiff,
v.
Case No: 2:13-cv-811-FtM-38CM
DOUGLAS REALTY &
DEVELOPMENT, INC., GULFSTYLE
REALTY, INC., A&J CONSULTING
INC. and DOROTHY YOUNG,
Defendants/Third
Party Plaintiff
GULFSTYLE REALTY, INC., A&J
CONSULTING INC. and
DOROTHY YOUNG,
Third Party Defendants.
___________________________
/
ORDER1
This matter comes before the Court on Plaintiff Lisa Maglione-Chenault and Third
Party Defendants Gulfstyle Realty, Inc. and Dorothy Young’s Motion to Dismiss
Counterclaims and Third Party Complaint and Motion to Strike Affirmative Defenses (Doc.
#20) filed on February 27, 2014. Although given the opportunity, Defendant Douglas
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Realty & Development, Inc. has not filed a response in opposition and the time to do so
has expired. This matter is now ripe for review.
Background
Plaintiff Lisa Maglione-Chenault filed a two-count Complaint on November 21,
2013, against Defendant Douglas Realty & Development, Inc. (Doc. #1). The action is
brought pursuant to the Fair Labor Standards Act (“FLSA”) for unpaid wages, unpaid
overtime, and retaliation. The Complaint specifically alleges in April 2010, MaglioneChenault was hired by Douglas Realty to serve as a Property Manager at a location in
Lee County, Florida. (Doc. #1, at ¶6). Maglione-Chenault’s job as Property Manager for
Douglas Realty required long work hours. (Doc. #1, at ¶¶11-12, 27). Maglione-Chenault
was paid on a salary basis rather than an hourly rate. (Doc. #1, at ¶¶13-14, 22). MaglioneChenault often worked more than 40 hours a week but did not receive overtime
compensation or minimum wage compensation. (Doc. #1, at ¶27).
At some point, Maglione-Chenault demanded “proper” compensation. (Doc. #1, at
¶29). But in response, Douglas Realty began a campaign of retaliation against MaglioneChenault which resulted in a constructive discharge. (Doc. #1, at ¶¶29, 35). MaglioneChenault initiated this lawsuit against Douglas Realty for failing to pay her for the hours
she worked in excess of her regular 40 hour work week and retaliating against her for
seeking proper compensation. (Doc. #1, at ¶¶46, 50).
After the Complaint was filed, Douglas Realty filed an answer, affirmative
defenses, and a three-count counterclaim and third-party complaint. (Doc. #19). There
are three affirmative defenses. The first affirmative defense is that Maglione-Chenault
fails to state a cause of action because her claims are vague, confusing and contradictory,
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and fail to provide sufficient details to put defendant on notice. (Doc. #19, at ¶55). The
second affirmative defense discusses why Douglas Realty believes Maglione-Chenault
was not an employee within the meaning of the FLSA but instead was an independent
contractor paid based on her commissions. (Doc. #19, at ¶56). The third affirmative
defense states Maglione-Chenault owes Douglas Realty for her breach of trade secrets,
theft of confidential information, unfair competition, tortious interference with contractual
relationships and other tortious acts committed against Douglas Realty. (Doc. #1, at ¶57).
Douglas Realty’s counterclaims and third-party complaint adds A&J Consulting
Inc., Gulfstyle Realty, Inc., and Dorothy Young as defendants to this case. Count I is
Tortious Interference with Contractual Relations as to all Defendants, Count II is Negligent
Supervision as to Defendants Gulfstyle and Young, and Count III is Theft of Trade Secrets
in violation of Chapter 688 of the Florida Statutes as to all Defendants. The counterclaims
and third-party complaint alleges Maglione-Chenault affiliated herself and her real estate
company, A&J, with Gulfstyle after leaving her employment with Douglas Realty. (Doc.
#19, at ¶63). And when Maglione-Chenault did so, she took proprietary and confidential
client information belonging to Douglas Realty and then began immediately working for
Gulfstyle. (Doc. #19, at ¶¶75-76).
Thereafter, Douglas Realty alleges A&J, Maglione-Chenault, Young, and Gulfstyle
contacted Douglas Realty’s clients to solicit the breach of its clients then existing contracts
with Douglas Realty in order to use Gulfstyle’s services instead. (Doc. #19, at ¶¶81, 83,
98). Further, the counterclaims and third-party complaint allege these defendants
misappropriated Douglas Realty’s trade secrets and propriety information. (Doc. #19, at
¶107). The counterclaims and third-party complaint also allege Young and Gulfstyle were
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negligent in supervising Maglione-Cheault’s behavior by allowing her to solicit Douglas
Realty’s existing clients and by intentionally assisting others to breach existing contracts
with Douglas Realty. (Doc. #19, at ¶99). As a result, Douglas Realty has suffered
damages from the actions of Maglione-Chenault, A&J, Young, and Gulfstyle. (Doc. #19,
at ¶¶89, 111). Douglas Realty also states punitive damages should be awarded to
discourage and deter like treatment from similarly situated persons in the future. (Doc.
#19, at ¶91).
Maglione-Chenault along with Gulfstyle and Young (“the moving Parties”) jointly
argue that the third-party Complaint should be dismissed against Gulfstyle and Young
because the allegations are purely state law claims that do not have anything to do with
the pending FLSA matter. In addition, the moving Parties argue the counterclaims should
be dismissed because the allegations fail to allege facts sufficient to state a claim against
any of the Parties upon which relief can be granted. The moving Parties argue Douglas
Realty’s affirmative defenses should be stricken because they are insufficient. Lastly, the
moving Parties argue that the prayer for punitive damages is improper.
Discussion
i.
Motion to Dismiss Third-Party Complaint
Rule 14(a) of the Federal Rules of Civil Procedure permits a defendant to bring a
claim against any person not a party to the main action if that third person’s liability is in
some way dependent on the outcome of the main action. United States v. Olavarrieta,
812 F.2d 640, 643 (11th Cir. 1987). This rule, however, does not permit a defendant to
assert a wholly separate and independent claim even if the claim arises out of the same
general set of facts as the main action. Id. (citing Southeast Mortgage Co. v. Mullins, 514
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F.2d 747, 749-50 (5th Cir. 1975); United States v. Joe Grasso & Son, Inc., 380 F.2d 749,
751-52 (5th Cir. 1967)).
The moving Parties argue the counterclaims and third-party complaint should be
dismissed against Defendants Gulfstyle and Young because the claims asserted against
them are not related to the FLSA main action. Further, the moving Parties argue this Court
should not exercise supplemental jurisdiction over Defendant Douglas Realty’s state law
claims because there is no reasonable nexus to Maglione-Chenault’s FLSA main action.
The Court agrees with the conclusion sought by the moving Parties. The main
action here is an unpaid wages, unpaid overtime, and retaliation action pursuant to the
FLSA. Whereas, the third-party action is a tortious interference, negligent supervision,
and theft of trade secrets action brought pursuant to state law and arising from alleged
post-employment acts. These matters are wholly distinct and unrelated even if two of the
parties, Maglione-Chenault and Douglas Realty, are the same in both matters and a few
facts surrounding the legal issues may overlap. See Stewart Title Guar. Co. v. Title
Dynamics, Inc., No. 2:04CV316FTN-33SPC, 2005 WL 1593364, at *5 (M.D. Fla. June 30,
2005) (discussing that third-party complaint brought independent claims and therefore
dismissal was appropriate). These matters are not dependent on whether Douglas Realty
is liable to Maglione-Chenault with regard to unpaid wages, unpaid overtime, and
retaliation. Moreover, the counterclaims and third-party complaint is not related to the
main action, brings unrelated state law issues to be considered, and would not support
judicial economy, convenience, fairness, or comity. The witnesses and evidence would
not necessarily be the same. Leite v. Termron, Inc., No. 12-22118-CIV, 2012 WL
4049962, at *2 (S.D. Fla. Sept. 13, 2012) (citations omitted). Moreover, the Court finds it
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would be inappropriate to exercise supplemental jurisdiction over the state claims brought
in the counterclaims and third-party complaint as well because the claims do not arise out
of a common nucleus of operative fact. 28 U.S.C. § 1367; Lucero v. Trosch, 121 F.3d
591, 597 (11th Cir. 1997) (explaining supplemental jurisdiction exists if all state claims
arise out of a common nucleus of operative fact with a substantial federal claim) (citing
United Mine Workers of America v. Gibbs, 383 U.S. 715, 724-25 (1966); Palmer v. Hosp.
Auth. of Randolph County, 22 F.3d 1559, 156-64 (11th Cir. 1994)); Veal v. Voyager Prop.
and Cas. Ins. Co., No. 8:04-CV-323-T-27MSS, 2008 WL 2512528, at *2 (M.D. Fla. June
20, 2008) (citations omitted); Cruz v. Winter Garden Realty, LLC, No. 6:12-cv-1098-Orl22KRS, 2012 WL 6212909, at *9 (M.D. Fla. Nov. 27, 2012) (finding it was inappropriate
to exercise supplemental jurisdiction when additional action for tortious interference, civil
theft, and conversion were not related to main FLSA action for unpaid wages).
Accordingly, the motion to dismiss the counterclaims and third-party complaint is due to
be dismissed in its entirety without prejudice. Ingram v. Sch. Bd. of Miami-Dade County,
167 Fed.Appx. 107, 109 (11th Cir. 2006) (citing Eubanks v. Gerwen, 40 F.3d 1157, 1162
(11th Cir. 1994)).
ii.
Motion to Strike Affirmative Defenses
A party is required to assert its affirmative defenses to any claim in its responsive
pleading. Royal Palm Sav. Ass’n v. Pine Trace Corp., 716 F.Supp. 1416, 1420 (M.D. Fla.
July 20, 1989) (citing Fed.R.Civ.P. 12). The opposing party may then move to strike
improper affirmative defenses. Albeit, affirmative defenses are not stricken when the
defense presents a bona fide issue. Royal Palm Sav. Ass’n, 716 F.Supp. at 1420 (citing
A.M. Kiddler & Co. v. Turner, 106 So.2d 905, 906 (Fla. 1958)); see also Fifth Third Bank
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v. Alaedin & Majdi Investments, Inc., No. 8:11-CV-2206-T-17TBM, 2012 WL 1137104, at
*3 (M.D. Fla. Apr. 4, 2012) (explaining that a motion to strike an affirmative defense is
usually denied unless the allegations have no possible relation to the controversy and
may cause prejudice to one of the parties) (quoting Story v. Sunshine Foliage World, Inc.,
120 F.Supp.2d 1027, 1030 (M.D. Fla. 2000) (quoting Seibel v. Society Lease, Inc., 969
F.Supp. 713, 715 (M.D. Fla. 1997))). In addition, when a court reviews a motion to strike
an affirmative defense, it must accept the truthfulness of the well-pleaded facts and it
cannot consider matters beyond the pleadings. Fifth Third Bank, 2012 WL 1137104 at *3
(quoting Thompson v. Kindred Nursing Centers East, LLC, 211 F.Supp.2d 1345, 1348
(M.D. Fla. 2002) (citing Carlson Corp./Southeast v. Sch. Bd. of Seminole County Fla.,
778 F.Supp. 518 (M.D. Fla. 1991))). The moving Parties argue Douglas Realty’s three
affirmative defenses are legally insufficient and therefore must be stricken.
a. First Affirmative Defense
Douglas Realty’s first affirmative defense is that “Plaintiff fails to state a cause of
action or causes of action inasmuch as Plaintiff’s claims are vague, confusing and
contradictory and fail to provide sufficient detail to put Defendant on notice as to Plaintiff’s
allegations.” (Doc. #19, at ¶55). The moving Parties argue this is not a valid affirmative
defense because it is insufficient as a matter of law, and even if it were true, it does not
permit Douglas Realty the opportunity to escape liability. Upon review and consideration,
the Court finds this affirmative defense is not a proper affirmative defense. Rosada v.
John Wieland Homes and Neighborhoods, Inc., No. 3:09-cv-652-J-20MCR, 2010 WL
1249841, at *2 (M.D. Fla. Mar. 25, 2010) (explaining that an affirmative defense stating
that complaint fails to state of cause of action is not an affirmative defense but is instead
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a denial as it alleges only a defect in a plaintiff’s prima facie case) (citing In re Rawson
Food Service, Inc., 846 F.2d 1343, 1349 (11th Cir. 1988)); see also United Fixtures Co.,
Inc. v. Base Mfg., No. 6:08-cv-506-Orl-28GJK, 2008 WL 4550212, at *4 (M.D. Fla. Oct.
8, 2008). The Court finds, however, the proper remedy is not to strike this affirmative
defense but instead is to construe it as a specific denial. Rosada, 2010 WL 1249841, at
*2 (citing Home Mgmt. Solutions, Inc. v. Prescient, Inc., No. 07-20608-CIV, 2007 WL
2412834, at *3 (S.D. Fla. Aug. 21, 2007); Gonzalez v. Spears Holdings, Inc., No. 0960501-CIV, 2009 WL 2391233, at *2 (S.D. Fla. July 31, 2009)); Cadle v. Geico Gen. Ins.
Co., No. 6:13-cv-1591-Orl-31GJK, 2014 WL 793339, at *2 (M.D. Fla. Feb 27, 2014)
(same) (citing Premium Leisure, LLC v. Gulf Coast Spa Mfrs., Inc., No. 8:08-cv-1048-T24EAJ, 2008 WL 3927265, at *3 (M.D. Fla. Aug. 21, 2008)). Therefore, the motion is
denied with regard to this affirmative defense.
b. Second Affirmative Defense
Douglas Realty’s second affirmative defense is that Maglione-Chenault was not an
employee of Douglas Realty within the meaning of the FLSA but instead was an
independent contractor paid based on her commissions. (Doc. #19, at ¶56). The moving
Parties state this defense is insufficient to escape liability because it is a conclusory
statement that does not need to be taken as true. Further, the moving Parties argue this
defense should be stricken because it fails to conform to the appropriate pleading
standards.
The Court finds Douglas Realty’s second affirmative defense is also not a true
affirmative defense but is a mere denial. Adams v. Jumpstart Wireless Corp., 294 F.R.D.
668, 671 (S.D. Fla. 2013) (discussing that an affirmative defense stating that a plaintiff
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was never an employee of defendant but instead was an independent contractor is a
mere denial rather than an appropriate affirmative defense); see generally Diaz v. Jaguar
Rest. Group, LLC, 627 F.3d 1212 (11th Cir. 2010) (one of defendant’s affirmative
defenses was that plaintiff was an independent contractor). Accordingly, the proper
remedy is to not strike this affirmative defense but instead is to treat it as a denial. Adams,
294 F.R.D. at 671. Therefore, the motion is denied with regard to this affirmative defense.
c. Third Affirmative Defense
Douglas Realty’s third affirmative defense is that Maglione-Chenault owes a setoff to Douglas Realty for her breach of trade secrets, theft of confidential information,
unfair competition, tortious interference with contractual relationships, and other tortious
acts committed against Douglas Realty. (Doc. #19, at ¶57). The moving Parties assert
this affirmative defense is inappropriate because it is legally insufficient because Douglas
Realty is seeking affirmative relief from alleged post-employment acts of MaglioneChenault’s unrelated to her employment with regard to her FLSA claims. The moving
Parties rely on Brennan v. Heard, 491 F.2d 1 (5th Cir. 1974), stating that a set-off here
would prevent Maglione-Chenault from receiving her “cash in hand.” Id. at 4.
An employee receives a set-off if he receives pay in which he is not entitled to, and
consequently this pay is subtracted from any amount of overtime compensation owed.
King v. ITT Educational Services, Inc., No. 3:09-cv-848-J-32MCR, 2009 WL 3583881, at
*2 (citing Mercer v. Palm Harbor Homes, Inc., No. 805CV1435T30TGW, 2005 WL
3019302, at *2 (M.D. Fla. Nov. 10, 2005); Tibensky v. C.D.C. Acquisition Corp., No.
605CV820ORL28DAB, 2005 WL 1949825, at *1 (M.D. Fla. Aug. 12, 2005)). The FLSA
provides certain payments made by an employer shall be “credible toward overtime
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compensation.” Morrison v. Executive Aircraft Refinishing, Inc., 434 F.Supp.2d 1314,
1321 (S.D. Fla. 2005); 28 U.S.C. §§ 207(e), 207(h). Moreover, courts have found Brennan
does not represent that all set-offs are inappropriate. King, 2009 WL 3583881, at *2.
Instead, Brennan stands for the proposition that set-offs cannot cause a plaintiff’s wages
to fall below the statutory minimum. Id. (citations omitted); see also Singer v. City of Waco,
Tex., 324 F.3d 813, 828 n. 9 (5th Cir. 2003).
Here, Douglas Realty seeks to set-off the alleged failure to pay overtime wages by
seeking damages for its alleged misappropriation of trade secrets, confidential
information, and the like. This is not the kind of set-off that involves an overpayment of
wages by Douglas Realty to Maglione-Chenault. Nelson v. CK Nelson, Inc., No. 0761416-CIV, 2008 WL 2323892, at *3 (S.D. Fla. June 2, 2008) (finding that an alleged setoff regarding alleged damages caused by plaintiff would invariably cause plaintiff to not
receive the overtime payments he was allegedly entitled to under the FLSA and
accordingly, this kind of set-off was an inappropriate affirmative defense). Allowing such
a set-off would cause Plaintiff to not receive the overtime payments he was allegedly
entitled to under the FLSA. Id. Therefore, allowing Douglas Realty’s third affirmative
defense would be inappropriate. Id. The Court will strike the third affirmative defense.
Accordingly, it is now
ORDERED:
1. Plaintiff Lisa Maglione-Chenault and Third Party Defendants Gulfstyle Realty,
Inc. and Dorothy Young’s Motion to Dismiss Counterclaims and Third Party
Complaint and Motion to Strike Affirmative Defenses (Doc. #20) is GRANTED
in part and DENIED in part:
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a. The counterclaims and third-party complaint are DISMISSED without
prejudice.
b. Motion to Strike first and second affirmative defenses is DENIED. The
Court will treat these affirmative defenses as a denial.
c. Motion to Strike third affirmative defense is GRANTED.
d. Motion to strike claims for punitive damages is DENIED as moot.
2. Defendant Douglas Realty is directed to file and serve an amended answer,
counterclaims, and affirmative defenses in accordance to this order no later
than April 23, 2014.
3. The Clerk is directed to terminate Defendants A&J Consulting Inc., Gulfstyle
Realty, Inc. and Dorothy Young from this matter.
DONE and ORDERED in Fort Myers, Florida this 9th day of April, 2014.
Copies: All Parties of Record
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