Cruz et al v. Home & Garden Concepts, LLC et al
Filing
12
REPORT AND RECOMMENDATION re #7 Plaintiffs' MOTION for Default Judgment as to Defendants filed by Santos Aristides Majano Reyes, Neemias E. Cruz, Marvin A. Hernandez, Eleazar Cruz Zavala. Objections due 7/29/16. Signed by Magistrate Judge William Connelly on 7/12/2016. (Attachments: #1 Exhibit Letter, #2 Exhibit FRCP 72)(nk, Chambers) (Copies mailed to Murray A. Kivitz, Esq. [Defendants' counsel who has not entered his appearance] & to Defendant Sanoj Dhamindranath. No copy mailed to Defendant Home & Garden Concepts, LLC since previous mailing was returned undeliverable)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
__________________________________________
NEEMIAS E. CRUZ, et al.
)
)
Plaintiffs,
)
)
v.
)
)
HOME & GARDEN CONCEPTS, LLC, et al. )
)
Defendants.
)
__________________________________________)
Civil Action No. GJH-15-204
REPORT AND RECOMMENDATION
This Report and Recommendation addresses Plaintiffs Neemias E. Cruz, Santos Aristides
Majano Reyes, Eleazar Cruz Zavala and Marvin A. Hernandez (hereinafter “Plaintiffs”)’ Request
for Judgment by Default. ECF No. 7.1 Defendants Home & Garden Concepts, LLC and Sanoj
Dhamindranath (hereinafter “Defendants”) have not filed a response and the deadline for their
response elapsed on April 4, 2016. See Loc. R. 105.2.a. Having reviewed the filings, no hearing
is deemed necessary. See Loc. R. 105.6. For the reasons stated herein, the undersigned
recommends that, following the time to object to this Report and Recommendation, Plaintiffs’
Motion for Default Judgment be GRANTED.
I.
FACTUAL AND PROCEDURAL HISTORY
Neemias E. Cruz, Santos Aristides Majano Reyes, Eleazar Cruz Zavala and Marvin A.
Hernandez are adult residents of Maryland. ECF No. 1 at 2 (Compl. ¶ 3). Defendant Home &
Garden Concepts, LLC (“Home & Garden”), a Maryland corporation2, has forfeited its status3
1
On April 20, 2016, pursuant to 28 U.S.C. § 636 and Local Rules 301 and 302, Judge Hazel referred this case to
the undersigned to review a default judgment and/or make recommendations concerning damages. ECF No. 8.
2
A search on Google revealed this limited liability company, with Sanoj Dhamindranath as President, is an active,
foreign limited liability company registered with the State of Connecticut. See Companies Connecticut
1
and presently is not in good standing.4 See Home & Garden Concepts LLC, Maryland
Corporates-Company
Profiles
of
Maryland,
http://www.marylandcorporates.com/corp.
702494.html (last visited June 6, 2016). Home & Garden is owned by Defendant Sanoj
Dhamindranath. ECF No. 1 at 2 (Compl. ¶ 5).
Defendant Sanoj Dhamindranath controlled the daily operations of Home & Garden. He
supervised directly or indirectly the Plaintiffs. He had the power to hire, suspend, discipline or
fire the Plaintiffs. The Plaintiffs’ work schedules were directly or indirectly set and controlled by
Defendant Sanoj Dhamindranath, or he had the power to do so. The rate and method of the
Plaintiffs’ pay were directly or indirectly set and determined by Defendant Sanoj
Dhamindranath, or he had the power to do so. Id. ¶¶ 10-14.
Both Defendant Sanoj Dhamindranath and Defendant Home & Garden are employers
within the meaning of the Fair Labor Standards Act of 1938 (“FLSA”), 29 U.S.C. § 201, et seq.,
the Maryland Wage & Hour Law (“MWHL”), Md. Code Ann., Lab. & Empl. § 3-401, et seq.,
and the Maryland Wage Payment and Collection Law (“MWPCL”), Md. Code Ann., Lab. &
Empl. § 3-501, et seq. At all times relevant, Defendants have at least two or more employees
engaged in commerce or “handling, selling, or otherwise working on goods or materials that
have been moved in or produced for commerce by any person[.]” 29 U.S.C. § 203(s)(1)(A)(i).
“Defendants negotiate and purchase from producers and suppliers who operate in interstate
(http://www.connecticutcompanieslist.com); Connecticut Secretary of the State, (http://www.concord-sots.ct.gov)
(last visited June 6, 2016).
3
“’Forfeited’ means the ‘legal existence’ of the entity has been relinquished and it is usually for failing to make
required Annual Report/Personal Property Return filings for prior years.” “What Does It Mean That My Business
Entity Is ‘Not in Good Standing’ Or “Forfeited’?”, Maryland Department of Assessments & Taxation,
http://dat.maryland.gov/businesses/Documents/entitystatus.pdf (last visited June 6, 2016).
4
“’Not in Good Standing’ means the entity has not filed an Annual Report/Business Personal Property Return or it
owes a late filing penalty.” Id.
2
commerce and serve customers in interstate commerce.” ECF No. 1 at 3 (Compl. at ¶ 8). At all
times relevant, Defendants’ annual gross volume of sales made or business done is not less than
$500,000.00. Id. ¶ 6. Further, at all times relevant, Defendants constituted an “enterprise” as
defined by 29 U.S.C. § 203(r).
Plaintiff Neemias E. Cruz was employed as a project manager by the Defendants from
September 1, 2011 through February 8, 2013. Mr. Cruz was paid $2,500.00 per month.
Defendants did not pay Mr. Cruz for hours worked during his final four months of employment,
October 2012 through January 2013. For this period of time the Defendants owe Mr. Cruz
$10,000.00 in unpaid wages which Defendants withheld absent a bona fide dispute. See ECF No.
1 at 4 (Compl. ¶¶ 18-20); ECF No. 7-1 at 2 (Cruz Decl.).
Plaintiff Santos Aristides Majano Reyes was employed as a carpenter by the Defendants
for approximately one year and two months. Mr. Reyes was paid an hourly rate of $12.00. He
worked an average of fifty-seven (57) hours per week. Mr. Reyes was never compensated at the
required overtime rate (1.5 times his regular hourly rate) for those hours he worked in excess of
forty (40) hours per week. He seeks the difference between the overtime rate for sixty (60) weeks
(one year and two months) he should have been paid minus the regular hourly rate he was paid.
Further, for his last few weeks of employment Defendants failed to pay Mr. Reyes for 160 hours
of work. Mr. Reyes is owed $1,920.00 for unpaid wages at his regular hourly rate (160 hours x
$12.00/hour). Defendants owe him $6,120.00 in unpaid overtime wages. This amount is derived
as follows: $12.00/hour x 1.5 equals $18.00/hour. The difference between $18.00/hour and
$12.00/hour is $6.00/hour. Mr. Reyes routinely worked 57 hours per week, or 17 hours per week
overtime. The difference in the overtime rate is calculated as follows: 17 hours x $6.00/hour
3
equals $102.00. Sixty (60) weeks x $102.00 equals $6,120.00. See ECF No. 1 at 4 (Compl. ¶¶
21-24); ECF No. 7-2 at 2 (Reyes Decl.).
Plaintiff Marvin A. Hernandez was employed as a carpenter by the Defendants for fiftythree (53) weeks. Mr. Hernandez was paid an hourly rate of $12.00. He routinely worked 57
hours per week on average. Mr. Hernandez was never compensated at the required overtime rate
(1.5 times his regular hourly rate) for those hours he worked in excess of 40 hours per week. He
seeks the difference between the overtime rate he should have been paid minus the regular
hourly rate he was paid. See computation supra. Mr. Hernandez routinely worked 57 hours per
week, or 17 hours per week overtime. See computation supra. Fifty-three (53) weeks x $102.00
equals $5,406.00. See ECF No. 1 at 5 (Compl. ¶¶ 25-27); ECF No. 7-3 at 2 (Hernandez Decl.).
Plaintiff Eleazar Cruz Zavala was employed as a carpenter by the Defendants for fiftytwo (52) weeks. Mr. Zavala was paid an hourly rate of $12.00. He routinely worked 57 hours per
week on average. Mr. Zavala was never compensated at the required overtime rate (1.5 times his
regular hourly rate) for those hours he worked in excess of 40 hours per week. He seeks the
difference between the overtime rate he should have been paid minus the regular hourly rate he
was paid. See computation supra. Mr. Zavala routinely worked 57 hours per week, or 17 hours
per week overtime. See computation supra. Fifty-two (52) weeks x $102.00 equals $5,304.00.
See ECF No. 1 at 5 (Compl. ¶¶ 28-30); ECF No. 7-4 at 2 (Zavala Decl.).
On January 23, 2015 the Plaintiffs filed a Complaint against the Defendants alleging the
Defendants willfully violated clear and well-established straight time wages and overtime
provisions of the FLSA, MWHL, and MWPCL. ECF No. 1. The Plaintiffs seek compensatory
and statutory damages as well as attorneys’ fees and costs.
4
This Court’s jurisdiction is based on federal question, 28 U.S.C. § 1331, as this civil
action arises under “the Constitution, laws, or treaties of the United States.” See 29 U.S.C. §
216(b) (“An action to recover the liability prescribed . . . may be maintained against any
employer . . . in any Federal or State court of competent jurisdiction by any one or more
employees for and in behalf of himself or themselves and other employees similarly situated.”).
This Court exercises supplemental jurisdiction over the state (Maryland) law claims in
accordance with 28 U.S.C. § 1367(a) (“in any civil action of which the district courts have
original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims
that are so related to claims in the action within such original jurisdiction that they form part of
the same case or controversy under Article III of the United States Constitution.”).
On January 27, 2015 a summons and a copy of the Complaint were issued by the Clerk of
Court. ECF No. 2. Almost three months later, on April 22, 2015, Murray A. Kivitz, Esq. filed an
Affidavit of Acceptance of Service acknowledging he accepted the service of the Complaint and
Writ of Summons issued to Home & Garden Concepts, LLC and Sanoj Dhamindranath on April
15, 2015. ECF No. 3. The Defendants’ Answers were due May 6, 2015. Neither Defendant filed
an Answer by this deadline.
On July 31, 2015 the Plaintiffs moved for Clerk’s entry of default for want of answer or
other defense against the Defendants. ECF No. 4. The deadline for Defendants’ response in
opposition was August 17, 2015. No response in opposition was filed by either Defendant by the
deadline.
On September 1, 2015 the Clerk’s Entry of Default was docketed against both
Defendants. ECF No. 5. Approximately six months elapsed without any apparent activity. On an
5
undisclosed date the parties attempted to reach a settlement of this case. The case was not settled
but Defendants made certain partial payments.
Accordingly, the following amounts should be deducted from the
judgment. Five Thousand Two Hundred and Seventy ($5,270.01)
Dollars 01/100 in attorney fees and Nine Thousand Seven Hundred
and Twenty-Nine ($9,729.99) 99/100 Dollars to Plaintiffs totaling
Fifteen Thousand ($15,000.00) 00/100 Dollars.
ECF No. 7 at 4 ¶ 26.
On March 11, 2016 Judge Hazel issued an Order directing the Plaintiffs, within thirty
(30) days, to file and serve by mail on the Defendants a motion for default judgment, or submit a
report explain why such a motion would be inappropriate. ECF No. 6. Five days later, the
Plaintiffs moved for default judgment. ECF No. 7. On April 20, 2016 Judge Hazel referred the
case to the undersigned for a report and recommendation. ECF No. 8.5
II.
DISCUSSION
Federal Rule of Civil Procedure 55(b) governs the entry of default judgments. Pursuant to
Rule 55(b), the clerk may enter a default judgment “[i]f the plaintiff’s claim is for a sum certain
or a sum that can be made certain by computation,” and the defendant is in default for failing to
appear and is “neither a minor nor an incompetent person.” Fed. R. Civ. P. 55(b)(1).
Additionally, when a defendant is an individual, the plaintiff must certify or declare to be true
under penalty of perjury whether the defendant is in military service. 50 U.S.C. app. § 521(b)(1)
(“In any action or proceeding covered by this section, the court, before entering judgment for the
plaintiff, shall require the plaintiff to file with the court an affidavit—(A) stating whether or not
the defendant is in military service and showing necessary facts to support the affidavit; or (B) if
5
On June 7, 2016 the undersigned issued an Order directing the Plaintiffs to supplement the record as to Defendant
Sanoj Dhamindranath’s military status and further to address whether Defendant Sanoj Dhamindranath is a minor or
incompetent person. See ECF No. 9. The Plaintiffs supplemented the record on July 8, 2016. See ECF No. 10.
6
the plaintiff is unable to determine whether or not the defendant is in military service, stating that
the plaintiff is unable to determine whether or not the defendant is in military service.”).6
The entry of default judgment is a matter within the discretion of the Court. SEC v.
Lawbaugh, 359 F. Supp. 2d 418, 421 (D. Md. 2005) (citing Dow v. Jones, 232 F. Supp. 2d 491,
494 (D. Md. 2002)). As the Court noted in Disney Enterprises, Inc. v. Delane, 446 F. Supp. 2d
402 (D. Md. 2006), “[t]he United States Court of Appeals for the Fourth Circuit has a ‘strong
policy that cases be decided on the merits.’” Id. at 405 (quoting United States v. Shaffer Equip.
Co., 11 F.3d 450, 453 (4th Cir. 1993)). Nonetheless, “default judgment is available when the
‘adversary process has been halted because of an essentially unresponsive party.’” Id. (quoting
Lawbaugh, 359 F. Supp. 2d at 421).
In determining whether to award a default judgment, the Court takes as true the wellpleaded factual allegations in the complaint, other than those pertaining to damages. Ryan v.
Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001) (“The defendant, by his default,
admits the plaintiff’s well-pleaded allegations of fact, is concluded on those facts by the
judgment, and is barred from contesting on appeal the facts thus established.” (citation and
internal quotation marks omitted)); see Fed. R. Civ. P. 8(b)(6) (“An allegation—other than one
relating to the amount of damages—is admitted if a responsive pleading is required and the
allegation is not denied.”). It remains, however, “for the court to determine whether these
unchallenged factual allegations constitute a legitimate cause of action.” Agora Fin., LLC v.
Samler, 725 F. Supp. 2d 491, 494 (D. Md. 2010); 10A Charles Alan Wright et al., Fed. Prac. and
Proc. Civ. § 2688 (3d ed. 1998) (“[L]iability is not deemed established simply because of the
6
“Undersigned counsel engaged in substantial communication with Defendant Sanoj S. Dhamindranath’s counsel
for almost one year in efforts to resolve this matter and Defendant Sanoj S. Dhamindranath’s counsel never
mentioned that Defendant Sanoj S. Dhamindranath was a minor, involved in any military service or incompetent.”
ECF No. 10 at 1-2 (Lombardo, Esq. Decl. ¶ 5). See also ECF No. 10-1 at 2 (Affidavit Pursuant to Servicemembers
Civil Relief Act).
7
default . . . and the court, in its discretion, may require some proof of the facts that must be
established in order to determine liability.”); id. (explaining that the court must “consider
whether the unchallenged facts constitute a legitimate cause of action, since a party in default
does not admit mere conclusions of law”).
If the Court finds that “liability is established, [it] must then determine the appropriate
amount of damages.” Samler, 725 F. Supp. 2d at 494 (citing Ryan, 253 F.3d at 780-81). This is
so because “an allegation ‘relating to the amount of damages’ is not deemed admitted based on a
defendant’s failure to deny in a required responsive pleading.” Hartford Fin. Servs. Grp. Inc. v.
Carl J. Meil, Jr., Inc., No. WDQ-10-2720, 2011 WL 1743177, at *7 (D. Md. May 5, 2011)
(quoting Fed. R. Civ. P. 8(b)(6)); Trs. of the Elec. Welfare Trust Fund v. MH Passa Elec.
Contracting, LLC, No. DKC-08-2805, 2009 WL 2982951, at *1 (D. Md. Sept. 14, 2009) (“Upon
default, the well-pled allegations in a complaint as to liability are taken as true, although the
allegations as to damages are not.”); Int’l Painters & Allied Trades Indus. Pension Fund v. Metro
Glass & Mirror, Inc., No. ELH-11-2389, 2012 WL 893262, at *2 (D. Md. Mar. 14, 2012) (“The
court does not accept factual allegations regarding damages as true, but rather must make an
independent determination regarding such allegations.”).
In sum, the Court must make two determinations. First, the Court must decide “whether
the unchallenged facts in plaintiff[’s] complaint constitute a legitimate cause of action[.]”
Samler, 725 F. Supp. 2d at 494. Second, if the Court finds that liability is established, it must
“make an independent determination regarding the appropriate amount of damages.” Id.
A.
Liability
One year and three months have elapsed since Defendants Home & Garden and Sanoj
Dhamindranath were served with the Plaintiffs’ Complaint, yet the Defendants have not pleaded
8
or otherwise asserted a defense by filing an Answer. As a result, all of the factual allegations
made in the Plaintiffs’ Complaint not pertaining to damages are deemed admitted. Fed. R. Civ. P.
8(b)(6); Ryan, 253 F.3d at 780.
The Plaintiffs moved for a default judgment on March 16, 2016 and the Defendants have
not responded. It is within the Court’s discretion to grant default judgment when a defendant is
unresponsive. See Park Corp. v. Lexington Ins. Co., 812 F.2d 894, 897 (4th Cir. 1987)
(upholding a default judgment awarded where the defendant lost its summons and did not
respond within the proper period); Disney Enterprises, 446 F. Supp. 2d at 405-06 (finding
appropriate the entry of default judgment where the defendant had been properly served with the
complaint and did not respond, despite repeated attempts to contact him). Accordingly, the Court
should grant default judgment on the Complaint if the Plaintiffs establish the Defendants’
liability.
That accepting as true the Plaintiffs’ well-pleaded allegations, the undersigned finds the
Plaintiffs have proven the following:
a.
Defendant Home & Garden is a Maryland corporation;
b.
Defendant Sanoj Dhamindranath is the owner of Home & Garden;
c.
At all times relevant Defendants had annual gross volume of sales made or
business done in an amount exceeding $500,000.00;
d.
At all times relevant Defendants constituted an enterprise as defined by 29 U.S.C.
§ 203(r);
e.
Each Defendant is an employer as defined by the FLSA, the MWHL, and the
MWPCL;
9
f.
Defendant Sanoj Dhamindranath controlled the daily operations of Home &
Garden;
g.
Defendant Sanoj Dhamindranath supervised the Plaintiffs directly or indirectly;
h.
Defendant Sanoj Dhamindranath directly or indirectly set and controlled the
Plaintiffs’ work schedules;
i.
Defendant Sanoj Dhamindranath directly or indirectly set and determined the rate
and method of each Plaintiff’s pay;
j.
Defendant Sanoj Dhamindranath had the power to hire, discipline, suspend or fire
the Plaintiffs;
k.
Because of his intrinsic involvement in the business, Defendant Sanoj
Dhamindranath would be considered an employer for purposes of individual liability;
l.
Plaintiffs were employed by the Defendants from 2011 through 2013;
m.
Defendants paid Plaintiff Neemias E. Cruz $2,500.00 per month regardless of the
number of hours worked. On average he worked forty-four (44) hours per week;
n.
Defendants failed to pay Plaintiff Neemias E. Cruz for his final four months of
employment (October 2012 through January 2013) and is owed $10,000.00 in unpaid wages
which were withheld by Defendants absent a bona fide dispute;
o.
Defendants paid Plaintiff Santos Aristides Majano Reyes $12.00 per hour
regardless of the number of hours per week he worked. He routinely worked fifty-seven (57)
hours per week. He was not compensated at the overtime rate (1.5 times the hourly rate or $18.00
per hour) for those hours he worked in excess of 40 hours a week. Plaintiff Santos Aristides
Majano Reyes is owed the difference between the overtime rate he should have been paid and the
regular rate he was paid for sixty (60) weeks. He is owed $6,120.00 in unpaid overtime wages;
10
p.
Defendants also failed to pay Plaintiff Santos Aristides Majano Reyes for 160
hours of work. He is owed $1,920.00 in unpaid straight time wages;
q.
Defendants paid Plaintiff Marvin A. Hernandez $12.00 per hour regardless of the
number of hours per week he worked. He routinely worked fifty-seven (57) hours per week. He
was not compensated at the overtime rate (1.5 times the hourly rate or $18.00 per hour) for those
hours he worked in excess of 40 hours a week. Plaintiff Marvin A. Hernandez is owed the
difference between the overtime rate he should have been paid and the regular rate he was paid
for fifty-three (53) weeks. He is owed $5,406.00 in unpaid overtime wages;
r.
Defendants paid Plaintiff Eleazar Cruz Zavala $12.00 per hour regardless of the
number of hours per week he worked. He routinely worked fifty-seven (57) hours per week. He
was not compensated at the overtime rate (1.5 times the hourly rate or $18.00 per hour) for those
hours he worked in excess of 40 hours a week. Plaintiff Eleazar Cruz Zavala is owed the
difference between the overtime rate he should have been paid and the regular rate he was paid
for fifty-two (52) weeks. He is owed $5,304.00 in unpaid overtime wages;
s.
Pursuant to 29 U.S.C. § 206(a)(1)(C), “[e]very employer shall pay to each of his
employees who in any workweek is engaged in commerce or in the production of goods for
commerce, or is employed in an enterprise engaged in commerce or in the production of goods
for commerce, wages” at a minimum of $7.25 an hour;
t.
Defendants’ failure to abide by 29 U.S.C. § 206 constitutes a willful violation;
u.
In accordance with the MWHL, “each employer shall pay to each employee who
is subject to both the federal Act and this subtitle, the greater of the minimum wage for that
employee under the federal Act; or the State minimum wage rate set under subsection (c) of this
section[.]” Md. Code Ann., Lab. & Empl., § 3-413(b)(1);
11
v.
Defendants’ failure and refusal to comply with their obligations under the MWHL
was willful and not in good faith;
w.
“[No] employer shall employ any of his employees who in any workweek is
engaged in commerce or in the production of goods for commerce, or is employed in an
enterprise engaged in commerce or in the production of good for commerce, for a workweek
longer than forty hours unless such employee receives compensation for his employment in
excess of the hours above specified at a rate not less than one and one-half times the regular rate
at which he is employed.” 29 U.S.C. § 207(a)(1);
x.
Defendants’ failure to abide by 29 U.S.C. § 207 constitutes a willful violation;
y.
In accordance with the MWHL, “each employer shall pay an overtime wage of at
least 1.5 times the usual hourly wage[.]” Md. Code Ann., Lab. & Empl., § 3-415;
z.
Defendants’ failure and refusal to comply with their obligations under the MWHL
was willful and not in good faith;
aa.
Pursuant to the MWPCL, “each employer shall pay an employee . . . all wages
due for work that employee performed before the termination of employment, on or before the
day on which the employee would have been paid the wages if the employment had not been
terminated.” Id., § 3-505(a);
bb.
Defendants, as the employers, have the burden of demonstrating they withheld
wages as a result of a bona fide dispute. Peters v. Early Healthcare Giver, Inc., 439 Md. 646,
658-59, 97 A.3d 621, 628 (2014);
cc.
Defendants’ failure and refusal to comply with their obligations under the
MWPCL was not due to a bona fide dispute, and thus was willful and not in good faith;
12
dd.
Defendants failed to pay Plaintiffs Neemias E. Cruz and Santos Aristides Majano
Reyes all of the straight time wages they were owed as required by the FLSA, the MWHL, and
the MWPCL; and
ee.
Plaintiffs Santos Aristides Majano Reyes, Marvin A. Hernandez, and Eleazar
Cruz Zavala worked in excess of forty hours per week, constituting overtime work. They were
not properly compensated by the Defendants as required by the FLSA, the MWHL, and the
MWPCL.
Accordingly, the Plaintiffs have established the Defendants’ liability and therefore a default
judgment as to the violations of the FLSA, the MWHL and the MWPCL as outlined in the
Plaintiffs’ Complaint is proper.
B.
Damages
In support of their claims for damages each Plaintiff has submitted a declaration and their
counsel have submitted a declaration with supporting documentation. Initially, in their
Complaint the Plaintiffs sought $86,250.00 (three times the wages owed) plus reasonable
attorneys’ fees and costs under the MWPCL, $46,652.64 (two times the overtime compensation
owed) plus reasonable attorneys’ fees and costs under the FLSA, and $23,326.32 under the
MWHL plus reasonable attorneys’ fees and costs. See ECF No. 1 at 6, 8.
In their motion for default judgment the Plaintiffs seek treble damages under the
MWPCL of the regular and overtime wages owed ($28,750.00), a total amount of $86,250.00.
ECF No. 7 at 8. This amount is reduced by the partial payment by Defendants in the amount of
$9,729.99. Id. at 4. The adjusted amount of damages the Plaintiffs seek is $76,520.01. Id. at 13.
“If . . . a court finds that an employer withheld the wage of an employee in violation of
this subtitle and not as a result of a bona fide dispute, the court may award the employee an
13
amount not exceeding 3 times the wage, and reasonable counsel fees and other costs.” Md. Code
Ann., Lab. & Empl. § 3-507.2(b). Since the Plaintiffs alleged violations of § 3-502 and § 3-505
of the MWPCL and the Defendants’ liability has been established, this court may consider an
award of treble damages. In light of the Maryland General Assembly’s use of the word may
instead of shall, “an employee is not presumptively entitled to enhanced damages, even if the
court finds that wages were withheld without a bona fide dispute.” Early Healthcare Giver, 439
Md. at 662, 97 A.3d at 630.
The undersigned recommends an award of treble damages. Defendants’ failure to pay the
proper rate for overtime pay occurred in 2012 and 2013, three to four years ago. At least two of
the Plaintiffs were not paid for work performed in 2012 and/or 2013. In either case the wages
were unlawfully withheld. Awarding tremble damages appropriately punishes the Defendants for
their misconduct and places other employers on notice about the consequences of violating the
MWPCL.
An award of $76,520.01 is the amount owed to the Plaintiffs collectively. The Defendants
have already made a partial payment of $9,729.99. The undersigned assumes this payment was
divided proportionally among the four Plaintiffs. To determine each Plaintiff’s proportional
share, the undersigned multiplied each unpaid wages by 3.38 percent. Those amounts totaled
$9,717.50, leaving a difference of $12.49 (which the undersigned distributed proportionally
among the Plaintiffs). Next, the proportional share each Plaintiff presumably received was
subtracted from each Plaintiff’s treble award to derive the amount owed as compensatory and
statutory damages.
a.
Plaintiff Neemias E. Cruz is owed $26,614.887;
7
The Defendants owe Plaintiff Cruz $10,000.00 in unpaid wages. This amount times 3.38 percent equals $3,380.00
(Plaintiff Cruz’s proportional share from Defendants’ partial payment). The undersigned then added $5.12 as
14
b.
Plaintiff Santos Aristides Majano Reyes is owed $21,399.368;
c.
Plaintiff Marvin A. Hernandez is owed $14,388.639;
d.
Plaintiff Eleazar Cruz Zavala is owed $14,117.14.10
The amounts owed to each Plaintiff individually ($26,614.88 + $21,399.36 + $14,388.63 +
$14,117.14) total $76,520.01.
Attorneys’ Fees
The total amount of attorneys’ fees incurred in this case is $11,084.33. See ECF No. 7-5
at 3 (Lombardo Decl. ¶ 7). This amount is reduced by $5,270.01, Defendants’ partial payment on
an undisclosed date. See ECF No. 7 at 4 ¶ 26. The balance sought by Plaintiffs’ counsel is
$5,814.3211 (exclusive of costs).
The undersigned has reviewed the Declaration of Mary Craine Lombardo, Esquire (ECF
No. 7-5 at 2-4) and the billing records of her firm. Ms. Lombardo has been practicing law for
over fifteen (15) years. She has been the lead attorney of this case since it went to litigation. Her
colleague Jonathan F. Lieberman, Esquire, who likewise has practiced law for over 15 years, was
the lead attorney of this case during the investigation and initial demand stage.
Plaintiff Cruz’s proportional share of $12.49, for a total proportional share of $3,385.12. Subtracting this amount
from $30,000.00 (Plaintiff Cruz’s treble damages) yields a balance of $26,614.88.
8
The Defendants owe Plaintiff Reyes $8,040.00 in unpaid wages. This amount times 3.38 percent equals $2,717.52
(Plaintiff Reyes’ proportional share from Defendants’ partial payment). The undersigned then added $3.12 as
Plaintiff Reyes’ proportional share of $12.49, for a total proportional share of $2,720.64. Subtracting this amount
from $24,120.00 (Plaintiff Reyes’ treble damages) yields a balance of $21,399.36.
9
The Defendants owe Plaintiff Hernandez $5,406.00 in unpaid wages. This amount times 3.38 percent equals
$1,827.23 (rounded up) (Plaintiff Hernandez’s proportional share from Defendants’ partial payment). The
undersigned then added $2.14 as Plaintiff Hernandez’s proportional share of $12.49, for a total proportional share of
$1,829.37. Subtracting this amount from $16,218.00 (Plaintiff Hernandez’s treble damages) yields a balance of
$14,338.63.
10
The Defendants owe Plaintiff Zavala $5,304.00 in unpaid wages. This amount times 3.38 percent equals
$1,792.52 (Plaintiff Zavala’s proportional share from Defendants’ partial payment). The undersigned then added
$2.11 as Plaintiff Zavala’s proportional share of $12.49, for a total proportional share of $1,794.86. Subtracting this
amount from $15,912.00 (Plaintiff Zavala’s treble damages) yields a balance of $14,117.14.
11
In their motion the Plaintiffs request reasonable attorneys’ fees in the amount of $6,264.32 and costs in the
amount of $450.00. See ECF No. 7 at 13. The motion does not identify the total amount of attorneys’ fees incurred.
See id. at 8-13. The difference between $6,264.32 and $5,814.32 is $450.00. When comparing the motion to the
declaration of Plaintiffs’ counsel, the undersigned deduces the Plaintiffs failed to deduct $450.00 from the
outstanding amount of attorneys’ fees, and thus the outstanding attorneys’ fees is higher as listed in the motion.
15
The FLSA allows a prevailing Plaintiff to recover reasonable attorney’s fees and court
costs. 29 U.S.C. § 216(b) (“The court . . . shall . . . allow a reasonable attorney’s fee to be paid
by the defendant, and costs of the action.”). The award of reasonable counsel fees and other costs
is discretionary with the court under the MWCPL. See Md. Code Ann., Lab. & Empl. § 3507.2(b). But as the Court of Appeals of Maryland has noted, if the factfinder determines a lack
of a bona fide dispute as to unpaid wages, “courts should exercise their discretion liberally in
favor of awarding a reasonable fee, unless the circumstances of the particular case indicate some
good reason why a fee award is inappropriate in that case.” Friolo v. Frankel, 373 Md. 501, 518,
819 A.2d 354, 364 (2003) (quoting Hensley v. Eckerhart, 461 U.S. 424, 429, 103 S. Ct. 1933, 76
L.E.2d 40 (1983)). A fee award is appropriate in this case.
After reviewing the billing history and considering the twelve factors derived from
Johnson v Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974), the
undersigned finds (a) the time and labor required, (b) the level of skill required to perform the
legal services properly, (c) the customary fee, (d) a contingent fee case, (e) the experience,
reputation and ability of the attorneys and (f) awards in similar cases weigh heavily in liberally
awarding a reasonable fee. The fees incurred are reasonable. The undersigned therefore
recommends an award of $5,814.32 as reasonable attorneys’ fees.
Other Costs
Plaintiffs seek reimbursement of minimal court costs. They claim $400.00 for filing fee
and $50.00 for the process server’s fee, for a total cost award of $450.00. The undersigned finds
these fees are reasonable and necessary costs associated with this litigation. The undersigned
therefore recommends an award of $450.00 as reasonable costs.
16
RECOMMENDATIONS
The undersigned summarizes the recommendations as follows:
(a) The Court grant Plaintiffs’ Motion for Entry of Default Judgment and Award of
Attorneys’ Fees and Costs (ECF No. 7);
(b) The Court award Plaintiff Neemias E. Cruz and against the Defendants, jointly and
severally, $26,614.88 as compensatory and statutory damages;
(c) The Court award Plaintiff Santos Aristides Majano Reyes and against the Defendants,
jointly and severally, $21,399.36 as compensatory and statutory damages;
(d) The Court award Plaintiff Marvin A. Hernandez and against the Defendants, jointly
and severally, $14,388.63 as compensatory and statutory damages;
(e) The Court award Plaintiff Eleazar Cruz Zavala and against the Defendants, jointly and
severally, $14,117.14 as compensatory and statutory damages;
(f) The Court award the Plaintiffs $5,814.32 as reasonable attorneys’ fees;
(g) The Court award the Plaintiffs $450.00 as reasonable costs;
(h) The Court direct post-judgment interest, calculated in accordance with 28 U.S.C. §
1961, continue to accrue on the judgment until satisfied by the Defendants; and
(i) The Court grant any other and further relief as it deems appropriate.
July 12, 2016
________________/s/________________
WILLIAM CONNELLY
UNITED STATES MAGISTRATE JUDGE
17
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