Heimpel et al v. Vicour Holdings, LLC et al

Filing 37

MEMORANDUM OPINION. Signed by Magistrate Judge Timothy J. Sullivan on 2/7/2024. (ybs, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
Donald Ernest Heimpel, et al.,

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Plaintiffs,

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v.

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Vicour Holdings, LLC, et al.,

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Defendants.

Civil No. TJS-23-1159

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MEMORANDUM OPINION
This case is assigned to me for all proceedings by the parties’ consent, pursuant to 28 U.S.C.
§ 636(c). ECF No. 18. Pending before the Court is the Motion to Dismiss or, in the Alternative, for
Summary Judgment (“Motion”) (ECF No. 22) filed by Defendant Vicour Holdings, LLC
(“Vicour”). Having considered the parties’ submissions (ECF Nos. 22, 33 & 36), I find that a
hearing is unnecessary. See Loc. R. 105.6. For the following reasons, the Motion will be denied.
I.

Background
Plaintiffs Daniel Ernest Heimpel, Dillon Kercher, and Ronald Palacios sued Vicour and

James Richard Seba (“Mr. Seba”), on behalf of themselves and on behalf of a putative Rule 23
class, for purported violations of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (“FLSA”),
the Maryland Wage and Hour Law, Md. Code, Lab. & Empl. § 3-401 et seq. (“MWHL”), and the
Maryland Wage Payment and Collection Law, Md. Code, Lab. & Empl. § 3-501 et seq.
(“MWPCL”), and for breach of contract. Vicour timely moved to dismiss and their Motion is ripe
for decision.1

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Defendant James Richard Seba does not join in the Motion. He filed an Answer to the
Complaint at ECF No. 20.

II.

Factual Allegations
The following facts are accepted as true for the purpose of evaluating this Motion. Vicour

is a limited liability company formed in the State of Maryland. ECF No. 1 ¶ 6. It “acquires
companies to own and operate, and as such, is the parent company to a number of different
corporate entities.” Id. ¶ 7. Mr. Seba is Vicour’s founder and general managing partner. Id. ¶ 11. In
2018, Vicour acquired Pavement Company, LLC (“Pavement Company”), which, as its name
suggests, is engaged in the pavement business. Id. ¶¶ 8-9. Mr. Seba “took an active role in
managing [Vicour’s] business, including its finances and payroll in Pavement Company.” Id. ¶ 12;
see also id. ¶ 39 (alleging that “Defendant Seba has (or had . . .) complete operational control of
Defendant Vicour and Pavement Company . . . and maintains custody and control” of their business
records, including payroll records). Plaintiffs are former employees of Pavement Company. Id. ¶
10.
As part of his management of Vicour and Pavement Company, Mr. Seba “explicitly
directed” that Pavement Company’s employees not be paid their regular wages for the time period
of August 14, 2022, through September 24, 2022. Id. ¶ 14. And since April 2022, Mr. Seba directed
that monies deducted from employees’ paychecks that were meant to be deposited into the
employees’ IRA accounts “be withheld and not remitted.” Id. ¶ 15. Pavement Company assured its
employees that Mr. Seba and Vicour “were working with a new bank to make sure Pavement
Company’s employees would be paid” the wages owed to them, but the employees were ultimately
laid off without having been paid. Id. ¶¶ 16-21. Vicour and Mr. Seba were actively involved in all
aspects of Pavement Company’s operations. See id. ¶¶ 22-28. And Mr. Seba used his authority and
discretion to hire and fire Vicour and Pavement Company employees and “to fix, adjust and
determine hours worked and amounts paid.” Id. ¶¶ 42-43.

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At all times relevant to the Complaint, Vicour had an annual gross volume of sales or
business done in an amount exceeding $500,000. Id. ¶ 29. And at all times, Vicour and Pavement
Company employed at least two employees who were engaged in commerce, and who produced
goods for commerce, or handled, sold, or otherwise worked on goods or materials that have moved
in or were produced for commerce as a single enterprise under the FLSA. Id. ¶ 30. Vicour and
Pavement Company’s employees used equipment that had crossed interstate lines, communicated
by interstate wire and electronic means, and worked on projects in Virginia, Pennsylvania, and
Delaware. Id. ¶¶ 31-35. Plaintiffs allege that they were jointly employed by Vicour and Pavement
Company, that Vicour and Pavement Company are a single enterprise under the FLSA, that the
enterprise coverage provisions of the FLSA are satisfied, and that Vicour satisfies the coverage
provisions of the MWHL. Id.¶¶ 36-37.
Plaintiffs allege that Defendants did not pay the wages owed to them under federal and
state minimum wage and overtime laws, and the commissions owed to them according to their
employment contracts. Id. ¶¶ 51-59. This failure, Plaintiffs allege, did not stem from any bona fide
dispute, but was instead a willful violation of the governing statutes. Id. Each of the named
Plaintiffs makes additional allegations specific to their individual claims for unpaid wages and
commissions. See id. ¶¶ 60-91. And Plaintiffs make allegations relevant to a Rule 23 class, but
these allegations are not germane to the pending Motion. Id. ¶¶ 92-102.
III.

Discussion
A.

Legal Standard
1.

Rule 12(b)(6)

Rule 12(b)(6) permits a court to dismiss a complaint if it fails to “state a claim upon which
relief can be granted.” “The purpose of a Rule 12(b)(6) motion is to test the sufficiency of a

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complaint, [and not to] resolve contests surrounding the facts, the merits of a claim, or the
applicability of defenses.” Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). A
complaint must contain “sufficient factual matter, accepted as true, to state a claim to relief that is
plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009) (internal quotation marks
omitted). A complaint must consist of “more than labels and conclusions, and a formulaic recitation
of a cause of action’s elements will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 545 (2007).
When considering a motion to dismiss, a court must accept as true the well-pled allegations of the
complaint and “construe the facts and reasonable inferences derived therefrom in the light most
favorable to the plaintiff.” Ibarra v. United States, 120 F.3d 472, 474 (4th Cir. 1997). While a court
must take the facts in the light most favorable to the plaintiff, it “need not accept the legal
conclusions drawn from the facts” and “need not accept as true unwarranted inferences,
unreasonable conclusions, or arguments.” E. Shore Markets, Inc. v. J.D. Assocs. Ltd. P’ship, 213
F.3d 175, 180 (4th Cir. 2000).
“Federal Rule of Civil Procedure 8(a)(2) requires only ‘a short and plain statement of the
claim showing that the pleader is entitled to relief,’ in order to ‘give the defendant fair notice of
what the . . . claim is and the grounds upon which it rests.’” Twombly, 550 U.S. at 555 (quoting
Conley v. Gibson, 355 U.S. 41, 47 (1957)). A complaint generally “does not need detailed factual
allegations.” Id. So long as the factual allegations are “enough to raise a right to relief above the
speculative level,” the complaint will be deemed sufficient. Id. A “well-pleaded complaint may
proceed even if it strikes a savvy judge that actual proof of those facts is improbable and that a
recovery is very remote and unlikely.” Id. at 556 (internal quotation marks omitted).

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2.

Rule 56

“The court shall grant summary judgment if the movant 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). The burden is on the moving party to demonstrate the absence of any genuine dispute
of material fact. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). If sufficient evidence
exists for a reasonable jury to render a verdict for the party opposing the motion, then a genuine
dispute of material fact is presented and summary judgment should be denied. See Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Yet the “mere existence of a scintilla of evidence in
support of the [opposing party’s] position” cannot defeat a motion for summary judgment. Id. at
252.
The facts themselves, and the inferences to be drawn from those facts, must be viewed in
the light most favorable to the opposing party. Scott v. Harris, 550 U.S. 372, 378 (2007); Iko v.
Shreve, 535 F.3d 225, 230 (4th Cir. 2008). A party may not rest on the mere allegations or denials
of its pleading but must cite “particular parts of materials in the record” or “show[] that the
materials cited do not establish the absence or presence of a genuine dispute, or that an adverse
party cannot produce admissible evidence to support the fact.” Fed. R. Civ. P. 56(c)(1). Supporting
and opposing affidavits are to be made on personal knowledge, contain such facts as would be
admissible in evidence, and show affirmatively the competence of the affiant to testify to the
matters stated in the affidavit. Fed. R. Civ. P. 56(c)(4).
B.

Plaintiffs’ Allegation that Vicour is an “Employer”

Vicour argues that Plaintiffs’ claims against it must be dismissed because it is not an
“employer” under the FLSA, MWHL, or MWPCL. ECF No. 22-1 at 8-11. In determining whether
an entity qualifies as an employer for purposes of the FLSA and related Maryland statutes, “[t]he

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overarching concern is whether [the entity] possessed the power to control the workers in
question.”2 Prusin v. Canton’s Pearls, LLC, No. JKB-16-0605, 2017 WL 5126156, at *11 (D. Md.
Nov. 6, 2017). The Court looks to the “economic reality” test to determine the employer’s level of
control, considering factors such as “whether the alleged employer (1) had the power to hire and
fire employees, (2) supervised and controlled employee work schedules or conditions of
employment, (3) determined the rate and method of payment, and (4) maintained employment
records.” Id. “None of the four factors is dispositive; rather, a court should consider the totality of
circumstances,” including additional considerations such as “the person’s job description, his or
her financial interest in the enterprise, and whether or not the individual exercises control over the
employment relationship.” Id. (internal quotations omitted).
In support of its argument, Vicour notes that “as a single-member LLC that does not employ
any individuals,” it does not qualify as an employer under the “economic reality” test. Id. at 8. It
attaches to its Motion an affidavit signed by Mr. Seba and an Operating Agreement purporting to
govern the operations of Pavement Company. ECF Nos. 22-2 & 22-3. Because Vicour’s argument
relies on matters not alleged in or integral to the Complaint, the Court must consider whether to
treat its Motion as a motion for summary judgment.
Rule 12(d) provides that “[i]f, on a motion under Rule 12(b)(6) or 12(c), matters outside
the pleadings are presented to and not excluded by the court, the motion must be treated as one for
summary judgment under Rule 56.” But a Court has “complete discretion to determine whether or

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The FLSA defines “employer” as “any person acting directly or indirectly in the interest
of an employer in relation to an employee.” 29 U.S.C. § 203(d). An “employee” is defined as “any
individual employed by an employer,” id. § 203(e)(1), and “employ” means “to suffer or permit to
work.” Id. § 203(g). “The Supreme Court has instructed courts to construe the terms ‘employer’
and ‘employee’ expansively under the FLSA.” See Quinteros v. Sparkle Cleaning, Inc., 532 F.
Supp. 2d 762, 768 (D. Md. 2008) (citing Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 326
(1992); Rutherford Food Corp. v. McComb, 331 U.S. 722, 730 (1947)).
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not to accept the submission of any material beyond the pleadings that is offered in conjunction
with a Rule 12(b)(6) motion and rely on it, thereby converting the motion, or to reject it, or simply
not consider it.” Sager v. Hous. Comm’n of Anne Arundel Cnty., 855 F. Supp. 2d 524, 542 (D. Md.
2012). In determining whether to exercise its discretion to convert a motion to dismiss into one for
summary judgment, a court should exercise “great caution” and consider whether conversion “is
likely to facilitate the disposition of the action . . . [and] whether discovery prior to the utilization
of the summary judgment procedure is necessary.” Id. “This conversion is not appropriate when
the parties have not had an opportunity to conduct reasonable discovery.” Zak v. Chelsea
Therapeutics Int’l, Ltd., 780 F.3d 597, 606 (4th Cir. 2015).
The Court declines to consider the extrinsic evidence that Vicour has attached to its Motion,
and declines to treat the Motion as a motion for summary judgment. Vicour relies heavily on the
Court’s decision in Roman v. Guapos, III, Inc., 970 F. Supp. 2d 407, 414 (D. Md. 2013), but a
review of the docket in that case indicates that the parties were permitted to conduct discovery
before the Court ruled on the motion.3 See ECF Nos. 11 & 18 in Roman v. Guapos III, Inc., et al.,
No. DKC-12-2821. Plaintiffs have not yet conducted discovery. There are substantial
disagreements about the role that Vicour played in relation to Plaintiffs’ employment at Pavement
Company, the authenticity of the Operating Agreement for Pavement Company, and the veracity
of Mr. Seba’s affidavit. See ECF No. 33 at 7-10. The Court concludes that Plaintiffs must be
allowed an opportunity to take discovery before the Court considers whether summary judgment
is warranted.
And the Court rejects Vicour’s argument that Plaintiffs have failed to plead that it violated
the FLSA and related state statues. Vicour may disagree with Plaintiffs’ characterization of its

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There are also significant factual differences between this case and Roman.
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operation and role in Plaintiffs’ employment, but Plaintiffs have alleged that Vicour, along with
Mr. Seba, acquired, controlled, and operated Pavement Company. As Plaintiffs explain in their
response brief, “Defendant Seba could not have taken the actions he did absent Defendant Vicour
Holdings[’] ownership of Pavement Company, and Defendant Seba’s position as the founder and
general managing partner of Defendant Vicour Holdings.” ECF No. 33 at 5.
C.

Plaintiffs’ Breach of Contract Claim

Vicour argues that Plaintiffs’ claim for breach of contract must be dismissed because
“Plaintiffs do not attach a written contract or even describe the terms and conditions of an oral
contract” to the Complaint. ECF No. 22-1 at 11. Vicour cites Mr. Seba’s affidavit to maintain that
it that it “never entered into contracts with any of the employees of Pavement, including Mr.
Heimpel, Mr. Kercher and Mr. Polacios.” Id.
The Court rejects this argument. Plaintiffs have alleged that they signed employment
contracts with Defendants, ECF No. 1 ¶¶ 61, 72, 85, which Defendants breached by failing to pay
Plaintiffs the wages owed and commissions due. This is sufficient to state a breach of contract
claim. And, for the reasons stated above, the Court declines to consider evidence extrinsic to the
Complaint because Plaintiffs have not yet had an opportunity to engage in discovery.

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IV.

Conclusion
For these reasons, Vicour’s Motion to Dismiss (ECF No. 22) is DENIED. Vicour shall file

an answer to the Complaint within 14 days of the date of this Memorandum Opinion and
accompanying Order. Thereafter, the Court will enter a scheduling order so that the parties may
proceed with discovery. The Court will not entertain any motion for summary judgment until after
the close of discovery.

Date: February 7, 2024

/s/
Timothy J. Sullivan
Chief United States Magistrate Judge

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