Kalinich v. Grindlay et al
Filing
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MEMORANDUM AND ORDER denying 8 Motion for Default Judgment. Plaintiff may timely file and serve an amended complaint that alleges facts sufficient to establish FLSA coverage and liability. Signed by U.S. District Senior Judge Sam A. Crow on 7/30/14. (mb)
IN THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF KANSAS
AMY M. KALINICH
on behalf of herself and
all others similarly situated,
Plaintiffs,
Vs.
No. 14-1120-SAC
DONNA S. GRINDLAY,
SUSAN E. SMITH, and
KANCONNECT, LLC,
Defendants.
MEMORANDUM AND ORDER
The case comes before the court on the plaintiff’s Motion for
Default Judgment against all defendants. (Dk. 8). The clerk of the court filed
an entry of default on June 19, 2014. (Dk. 7). The plaintiff now asks the
court to enter judgment on her Fair Labor Standards Act (“FLSA”) claim for
unpaid wages (29 U.S.C. § 206(a)), and liquidated damages, attorneys’ fees
and costs (29 U.S.C. § 216(b)), and on her fraudulent filing of W-2 claim for
the fixed liability of $5,000 or the sum of actual damages, costs, and
attorneys’ fees (26 U.S.C. § 7434(b)).
“Defendant by his default, admits the plaintiff’s well-pleaded
allegations of fact.” Olcott v. Delaware Flood Co., 327 F.3d 1115, 1125 (10th
Cir.) (internal quotation marks and citation omitted), cert. denied, 540 U.S.
1089 (2003). “After an entry of default, a defendant cannot defendant a
claim on the merits.” Id. at 1125 n.11. Thus, “the factual allegations of the
complaint, except those relating to the amount of damages, will be taken as
true.” Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3rd Cir. 1990)
(quoting 10 C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure,
§ 2688 at 444 (2d ed. 1983) (citing in turn Thomson v. Wooster, 114 U.S.
104 (1885))). The entry of default judgment remains within the district
court’s sound discretion. Shah v. New York State Dept. of Civil Service, 168
F.3d 610, 615 (2nd Cir. 1999); Olivas v. Bentwood Place Apartments, LLC,
2010 WL 2952393 at *4 (D. Kan. Jul. 26, 2010). “Even after default, it
remains for the court to consider whether the unchallenged facts constitute a
legitimate basis for the entry of a judgment since a party in default does not
admit conclusions of law.” Olivas, 2010 WL 2952393 at *4 (citation
omitted); see Topp v. Lone Tree Athletic Club, Inc., 2014 WL 3509201 at *4
(D. Colo. Jul. 15, 2014).
“Following Iqbal and Twombly, federal courts have declined to
enter default judgments based upon complaints lacking sufficient factual
allegations to establish liability under the FLSA.” Topp v. Lone Tree Athletic
Club, Inc., 2014 WL 3509201 at *5 (citations omitted). To establish her
eligibility under FLSA, the plaintiff must allege “sufficient facts to plausibly
state a claim either (1) that she, individually, was engaged in commerce or
(2) that [defendant] . . . is an enterprise engaged in commerce.” Reagor v.
Okmulgee County Family Resource Center, 501 Fed. Appx. 805, 808, 2012
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WL 5507181 at *2 (10th Cir. Nov. 14, 2012). The plaintiff’s complaint offers
such conclusory and formulaic recitations as the defendants are “engaged in
interstate commerce and/or in the production of goods for commerce” and
“Plaintiff and other similarly situated employees were engaged in commerce
and/or worked for Defendants, which were enterprises engaged in
commerce.” (Dk. 1, ¶¶ 10-11). Such allegations fail to establish eligibility.
See Topp v. Lone Tree Athletic Club, Inc., 2014 WL 3509201 at *7. The
plaintiff’s complaint also offers these bare-bones allegations: “Plaintiff’s job
duties included answering calls and providing customer service for thirdparty companies with whom Defendants contracted to provide after-hours
customer service.” Id. at ¶ 12. The court cannot reasonably infer interstate
commerce activities from the mere terms of “third-party companies” or
“customer service.” The complaint offers no other facts describing the nature
and scope of the defendants’ business that would support any inference that
the defendants were an enterprise engaged in interstate commerce.
The court is mindful that an employee may be engaged in
commerce if she “regularly and recurrently use[s] an instrument of
interstate commerce, such as a telephone.” Reagor, 501 Fed. Appx. at 809
(citing Thorne v. All Restoration Servs. Inc., 448 F.3d 1264, 1266 (11th Cir.
2006), and 29 C.F.R. § 776.10(b) (“requiring regular and recurrent use of
instruments of communication as part of job duties”)). “Isolated or sporadic
activities do not satisfy this requirement.” Id. (citing in part, Kitchings v. Fla.
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United Methodist Children’s Home, Inc., 393 F. Supp. 2d 1282, 1293 n.26
(M.D. Fla. 2005) (“For an employee to be engaged in commerce, a
substantial part of the employee’s work must be related to interstate
commerce.” (internal quotation marks omitted)). The plaintiff’s complaint
alleges no more than her job duties “included answering calls.” The
vagueness of this allegation keeps this court from inferring that the plaintiff’s
use of the telephone was a “regular,” “recurrent,” and “substantial part” of
her work. See Reagor, 501 Fed. Appx. at 810 (“Ms. Reagor’s assertion that
she uses the telephone as part of her duties is conclusory. She does not
assert that her use of the telephone was a regular and recurrent part of her
duties or that she used the telephone for interstate communications.”
(citation omitted)). Due to the lack of allegations showing that Kalinich
engaged in interstate commerce, the court cannot reasonably infer that the
plaintiff is eligible for FLSA coverage and that the defendants are liable for
the minimum wages under the FLSA. Thus, the court denies the motion for
default judgment on count one. The plaintiff may timely file and serve an
amended complaint which allege facts sufficient to establish FLSA coverage
and liability.
Even if the plaintiff’s complaint had properly alleged coverage
and liability, the court still would have denied the motion on count one for
the lack of a factual presentation on damages. It is well established in this
district:
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Furthermore, a default judgment does not establish the amount of
damages. Plaintiff must establish that the amount requested is
reasonable under the circumstances. “Damages may be awarded only
if the record adequately reflects the basis for [the] award via hearing
or a demonstration by detailed affidavits establishing the necessary
facts.”
Olivas v. Bentwood Place Apartments, LLC, 2010 WL 2952393 at *4 (citing
and quoting, DeMarsh v. Tornado Innovations, L.P., 2009 WL 3720180 at *2
(D. Kan. Nov. 4, 2009); see Hermeris, Inc. v. McBrien, 2012 WL 1091581 at
*1-*2 (D. Kan. 2012); see also Topp v. Lone Tree Athletic Club, 2014 WL
3509201, at *9 (D. Colo. Jul. 15, 2014); Solis v. Melt Brands Stores, LLC,
2012 WL 364685 at *2 (D, Colo. 2012). The plaintiff proceeds under Fed. R.
Civ. P. 55(b), and not (a), as she apparently recognizes that her claims are
not for sums certain or for sums that can be made certain by computation.
“’[W]hen a default judgment is entered on a claim for an indefinite or
uncertain amount of damages, facts alleged in the complaint are taken as
true, except facts relating to the amount of damages, which must be proven
in a supplemental hearing or proceeding.’” United States v. Craighead, 176
Fed. Appx. 922, 925 (10th Cir. 2006) (quoting American Red Cross v.
Community Blood Center of the Ozarks, 257 F.3d 859, 864 (8th Cir. 2001)).
The plaintiff’s motion is not accompanied by documentation or affidavits
concerning the issues of wages, damages, fees and costs. In a footnote, the
plaintiff’s motion does offer to make any documents and information
available to the court. (Dk. 8, p. 2 n.1). The above citations are commended
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to the plaintiff for review in making any subsequent factual presentation in
this regard.
Concerning count two, fraudulent filing of 2013 W-2 Form, the
plaintiff seeks to recover only the statutory penalty of $5,000 which would
be a sum certain. The judgment on this count, however, requires more, for
26 U.S.C. § 7434(e) provides: “The decision of the court awarding damages
in an action brought under subsection (a) shall include a finding of the
correct amount which should have been reported in the information return.”
The plaintiff’s motion offers no proposed finding for the court to comply with
the requirements of § 7434(e). The plaintiff also asks for attorneys’ fees
under this count without alleging entitlement to the same.
IT IS THEREFORE ORDERED that the plaintiff’s Motion for Default
Judgment against all defendants (Dk. 8) is denied, and the plaintiff may
timely file and serve an amended complaint that alleges facts sufficient to
establish FLSA coverage and liability.
Dated this 30th day of July, 2014, Topeka, Kansas.
s/Sam A. Crow
Sam A. Crow, U.S. District Senior Judge
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