FURGASON v. PROTEUS PROS et al

Filing 54

ORDER granting Plaintiff's 39 Motion for Partial Summary Judgment and denying as moot Defendant's 41 Motion for Partial Summary Judgment. Signed by Judge Richard L. Young on 9/30/2013. (TMD)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION

WRAY L. FURGASON,

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Plaintiff,
vs.
JAMES FURRER,
PROTEUS PROS, LLC,
Defendants.

1:12-cv-00738-RLY-MJD

ENTRY ON PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT
AND DEFENDANTS’ MOTION FOR PARTIAL SUMMARY JUDGMENT
Plaintiff, Wray Furgason (“Furgason”) worked as a handyman/technician for
Defendants, James Furrer (“Furrer”) and Proteus Pros, LLC d/b/a Mr. Handyman (“Mr.
Handyman”). During the majority of his employment, Furgason did not receive overtime
pay regardless of the number of hours he worked. Furgason brought the present action
against Mr. Handyman under the Fair Labor Standards Act (“FLSA”) or, in the
alternative, the Indiana Minimum Wage Law of 1965 (“IMWL”). Furgason filed his
Motion for Partial Summary Judgment asking the court to determine that, as a matter of
law, Mr. Handyman and Furrer violated either the FLSA or IMWL. Mr. Handyman and
Furrer then filed their Motion for Partial Summary Judgment on the FLSA claims,
arguing the FLSA does not apply to them. For the reasons set forth below, Defendants’
Motion is DENIED as moot, the court retains supplemental jurisdiction, and Plaintiff’s
Motion is GRANTED.
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I.

Background.

Furgason, a resident of Carmel, Indiana, began working for Mr. Handyman in
Indianapolis on February 28, 2011. (James Furrer Deposition (“Furrer Dep”). 18-19).
Furrer is the owner and manager of Mr. Handyman. (Id. at 16). Furgason worked as a
technician – he did not supervise anyone or have any managerial authority. (Id. at. 38).
As a technician, Furgason traveled to homes and businesses to perform repairs and other
home improvement services. (Id. at. 18-19). Upon hiring Furgason, Furrer informed
Furgason that his pay would be $700 per week, which would consist of a 45 hour work
week. (Id. at 35-36; Furgason Dep. 43).
Furgason was paid $700 per week from March 6, 2011 through October 29, 2011,
regardless of the number of hours he worked. (Furrer Dep. 33; Furrer Dep. Ex. 8).
Believing it was legal then, but now knowing that it was not, Mr. Handyman incorrectly
classified Furgason as a salary paid, overtime exempt employee. (Furrer Dep. 40). On
October 30, 2011, Mr. Handyman changed Furgason’s salary to a wage of $15 per hour.
(Furrer Dep. 34; Furrer Dep. Ex. 9). The payroll records reflect that from the pay period
of November 6, 2011 to November 12, 2011, Mr. Handyman paid Furgason $15.00 per
hour for fifty (50) “regular” hours. (Furrer Dep. Ex. 9) With the exception of that pay
period, the payroll records dated after October 30, 2011, reflected a rate of $22.50 for any
hours worked over forty (40). (Id.)
Mr. Handyman and Furrer did not use a time clock system to keep track of the time an
employee worked. (Furrer Dep. 48-49). According to Furgason, he worked on average
50 - 55 hours per week. (Furgason Dep. 26-27). The available records include a report
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from a GPS tracking device that monitored Furgason’s work van. Additionally, Furgason
completed Service Technician Labor Records (a.k.a. billing sheets) that documented the
time he spent at each job. Mr. Handyman submitted a spreadsheet, to which Furgason
objects, to detail Furgason’s work hours. (Docket # 46-5).
Furrer terminated Furgason’s employment with Mr. Handyman on January 27, 2012.
Upon termination, Furrer presented Furgason with a Severance Agreement and General
Release (“Agreement” or “Waiver”). The Agreement states that for the consideration of
a severance payment in the amount of $1,800 Furgason agrees to a general release of all
claims against Mr. Handyman including alleged violations of the FLSA and IMWL.
(Docket # 46-3).
Furgason brought the present action under the FLSA and IMWL in May 2012. He
requests the court grant him the following relief: all wages, overtime compensation,
statutory penalties for late payment of wages, liquidated damages, and his attorneys’ fees
and costs. Before the court is Plaintiff’s Motion for Partial Summary Judgment and
Defendants’ Motion for Partial Summary Judgment.
II.

Summary Judgment Standard.

The purpose of summary judgment is to “pierce the pleadings and to assess the proof
in order to see whether there is a genuine need for trial.” Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986). Summary judgment is appropriate if the
record “shows that there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed R. Civ. P. 56(a). A genuine issue of
material fact exists if there is sufficient evidence for a reasonable jury to return a verdict
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in favor of the non-moving party on the particular issue. See Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986).
On a motion for summary judgment, the burden rests with the moving party to
demonstrate “that there is an absence of evidence to support the nonmoving party’s case.”
Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). After the moving party demonstrates
the absence of a genuine issue for trial, the responsibility shifts to the non-movant to “go
beyond the pleadings” and point to evidence of a genuine factual dispute precluding
summary judgment. Id. at 322-23. “If the non-movant does not come forward with
evidence that would reasonably permit the finder of fact to find in her favor on a material
question, then the court must enter summary judgment against her.” Waldridge v. Am.
Hoechst Corp., 24 F.3d 918, 920 (7th Cir. 1994) (citing Matsushita Elec. Indus. Co., 475
U.S. at 585-87); see Celotex, 477 U.S. at 322-24; see also, Anderson, 477 U.S. at 249-52.
III.

Defendants’ Motion for Partial Summary Judgment.

Defendants’ move for partial summary judgment on the FLSA claims. They argue
that the FLSA does not apply to Mr. Handyman because it did not generate more than
$500,000 annually in gross sales and was not engaged in interstate commerce. In
response, Furgason stipulated to the application of the IMWL to his claims if the court
retains jurisdiction over those claims. As discussed below, the court will retain
jurisdiction over the IMWL claim. Thus, Furgason and Defendants are bound to this
stipulation, and any dispute regarding whether Mr. Handyman qualifies under the FLSA
is now moot. Defendants’ motion therefore is DENIED as moot.
IV.

Supplemental Jurisdiction.
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With the FLSA claims no longer pending, the court must decide whether to retain
supplemental jurisdiction over the remaining state law claim under the IMWL. A district
court may retain supplemental jurisdiction over state law claims even after it has
dismissed all claims over which it has original jurisdiction. 28 U.S.C. § 1367(c)(3). The
court is given broad discretion in determining whether it is appropriate to retain
jurisdiction over the state law claims. See Kennedy v. Schoenberg, Fisher & Newman,
Ltd., 140 F.3d 716, 728 (7th Cir. 1998).
Generally, when a district court dismisses all federal-law claims before trial, the
remaining claims should be left to the state courts. This general rule has three wellrecognized exceptions where a district court should retain jurisdiction. In determining
whether to retain jurisdiction, “[a] district court . . . should make a finding as to the
balance of judicial economy, convenience, fairness and comity to justify retention.”
Wright v. Associated Ins. Companies Inc., 29 F.3d 1244, 1252 (7th Cir. 1994).
Additionally, a court may retain state-law claims “when substantial judicial resources
have already been committed, so that sending the case to another court will cause a
substantial duplication of effort.” Id. at 1251.
In stipulating to the application of the IMWL, Furgason requests that the court
maintain supplemental jurisdiction under 28 U.S.C. § 1367(c)(3). Furgason argues that
remanding the case to state court would be a waste of judicial resources. In support of his
request, Furgason notes that his claim has been pending for over a year. In addition, the
parties have completed discovery. The court notes that since both motions for summary
judgment were filed, the parties have submitted their final witness lists (Docket ## 51,
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52), conducted a settlement conference with the magistrate judge (Docket # 53), and have
a trial date set for the end of January. Additionally, Mr. Handyman and Furrer did not
file a reply objecting to the court’s retention of the state law claims.
For these reasons, the court elects to take supplemental jurisdiction over the
remaining state law claim under 28 U.S.C. § 1367(c)(3). The court finds that it would be
inefficient and a duplication of resources for a state court to start the process over.
Judicial economy is best served by the court’s retention of the claims arising under the
IMWL.
V.

Plaintiff’s Motion for Partial Summary Judgment.
a. Fair Labor Standards Act Claim.
As indicated above, Furgason has stipulated that the IMWL will apply to his claim

rather than the FLSA. This argument is now moot and will not be considered by the
court.
b. Indiana Minimum Wage Law Claim.
i. The Waiver.
Mr. Handyman argues that the claims against it have been waived pursuant to the
Agreement entered into between Mr. Handyman and Furgason on February 6, 2012. In
the Agreement, Furgason agrees to a general release of all claims against Mr. Handyman
including alleged violations of the FLSA and IMWL, in consideration for $1,800
severance pay. (Docket # 46-3). Notwithstanding the Agreement, the court is bound by
Indiana law.

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The IMWL expressly states, “[n]o contract or agreement between the employee and
employer nor any acceptance of a lesser wage by the employee shall be a defense to this
action.” Ind. Code 22-2-2-9. Therefore, the Agreement entered into between Mr.
Handyman and Furgason purporting to waive a potential claim under the IMWL cannot
constitute a waiver under the IMWL.
ii. The Merits.
Furgason argues that Mr. Handyman misclassified him as a salary employee, exempt
from overtime. This misclassification resulted in Mr. Handyman’s failure to pay
Furgason any overtime from March 6, 2011, through October 29, 2011. Furgason argues
that he was entitled to overtime wages for the hours worked over forty (40) in a week,
which he alleges averages to be ten to fifteen hours per week. The failure of Mr.
Handyman to pay this overtime results, according to Furgason, in a violation of the
IMWL.
The IMWL states “no employer shall employ an employee for a work week longer
than forty (40) hours unless the employee receives compensation for employment in
excess of the hours above specified at a rate not less than one and one-half (1.5) times the
regular rate at which the employee is employed. Ind. Code. 22-2-2-4(k). An employer is
defined as
any individual, partnership, association, limited liability company,
corporation, business trust, the state, or other governmental agency or
political subdivision during any work week in which they have two (2) or
more employees. However, it shall not include any employer who is
subject to the minimum wage provisions of the federal Fair Labor
Standards Act of 1938 as amended. . . . Ind. Code 22-2-2-3.
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In determining whether or not Mr. Handyman’s actions fall under the IMWL, the
court must first determine if Mr. Handyman qualifies as an employer. The court finds
that Mr. Handyman is an employer for purposes of IMWL. First, Mr. Handyman is a
registered limited liability company. Second, it is undisputed that at all relevant times,
Mr. Handyman employed at least two employees. Additionally, the parties have
stipulated that the FLSA does not apply to Mr. Handyman. Therefore, Mr. Handyman
falls under the definition provided in Indiana Code 22-2-2-3.
The next issue is whether Mr. Handyman complied with the IMWL by paying
Furgason time and a half for the number of hours that he worked over forty (40).
Paystubs generated by Mr. Handyman, deposition testimony of Furgason, and deposition
testimony of Furrer all reveal that Mr. Handyman did not pay Furgason one and a half
(1.5) times his normal hourly rate for the hours worked over forty (40) hours in each
week.
Mr. Handyman and Furrer argue that Furgason was overpaid considering the alleged
hours he did not work but was paid for and the $1,800 severance pay. This argument,
however, is more applicable to the damages calculation which is unquestionably disputed
and not necessary to resolve at the summary judgment stage. In conclusion, Plaintiff’s
Motion for Partial Summary Judgment is hereby GRANTED.
VI.

Conclusion.

Because Plaintiff and Defendants agreed that the Indiana Minimum Wage Law would
apply to Plaintiff’s claims instead of the Fair Labor Standards Act, Defendants’ Motion
for Partial Summary Judgment (Docket # 41) is DENIED as moot. In order to not waste
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judicial resources and promote judicial economy, the court elects to retain supplemental
jurisdiction over Furgason’s claims arising under the IMWL. The court, finding no issue
of material fact, concludes that Plaintiff was not paid the overtime due to him under the
IMWL on at least one work week. The court thus finds a violation of the IMWL as a
matter of law. Therefore, Plaintiff’s Motion for Partial Summary Judgment (Docket #
39) is GRANTED. The court does not here decide the damages, if any, owed to
Plaintiff.

SO ORDERED this 30th day of September 2013.

__________________________________
________________ ________________
RICHARD L. YOUNG, CHIEF JUDGE
RICHARD L. YOUNG, CHIEF JUDGE
United States District Court
United States District Court
Southern District of Indiana
Southern District of Indiana

Distributed electronically to registered counsel of record.

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