Brown et al v. J&W Grading, Inc. et al

Filing 160

ORDER re 113 MOTION to Dismiss for Failure to State a Claim filed by J&W Grading, Inc., Ronnie Guthrie, 127 MOTION to Dismiss for Failure to State a Claim filed by Eco Iq LLC, 115 MOTION to Dismiss for Failure to Sta te a Claim as to Second Amended Complaint filed by Synergy, LLC, 135 MOTION to Dismiss for Failure to State a Claim filed by Migo IQ, Inc., Carol Leese, Radar_Apps, Inc., Jonathon Kotthoff, 118 MOTION to Dismiss for Fai lure to State a Claim filed by Ivelisse Estrada Rivero, 114 MOTION to Dismiss for Failure to State a Claim filed by Mojo Transport, LLC, Cloud IQ, LLC, Jason Neilitz. Signed by Judge William G. Young on 1/8/2019.(EES)

UNITED STATES DISTRICT COURT
DISTRICT OF PUERTO RICO
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Plaintiffs,
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v.
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J&W GRADING, INC., MIGO IQ, INC., )
RADAR_APPS, INC., ECO IQ LLC,
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CLOUD IQ, LLC, SYNERGY LLC,
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MOJO TRANSPORT, LLC,
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RONNIE GUTHRIE, JONATHON KOTTHOFF, )
CAROL LEESE, JASON NEILITZ,
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IVELISSE ESTRADA RIVERO, and
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DOES 1-100,
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Defendants.
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MICHAEL BROWN, JR., NATHAN COLE,
AARON FLOYD, BRANDON HORTON,
ERIC MOORE, GREGORY SEAL,
JOHN WILTERDING, MANNY RIVERA,
RICHARD PADILLA, DAN VISCHANSKY,
NEAL NIDA, KEVIN SHOFNER,
SHAUN STOCKTON, KYRAN ADAMS,
CODY PIPER, JOHN GABLE,
DONNA TURBVILLE, individually, on
behalf of themselves and all
others similarly situated,

YOUNG, D.J. 1

CIVIL ACTION
NO. 3:18-01263-WGY

January 8, 2019

ORDER
The Plaintiffs, individually and putatively on behalf of
all others similarly situated, have sued the Defendants seeking
recovery for violations of the Fair Labor Standards Act

1

Of the District of Massachusetts, sitting by designation.

(“FLSA”), 29 U.S.C. §§ 201 et seq., and similar Puerto Rico
labor statutes.
2, ECF No. 96.

Pls.’ Am. Collective Class Compl. (“Compl.”) 1The Plaintiffs also seek recovery under common

law theories of breach of contract, unjust enrichment,
fraudulent inducement, conversion, and negligent bailment.

Id.

at 2.
The Defendants -– J&W Grading, Inc. (“J&W Grading”) and
Ronnie Guthrie (“Guthrie”); Cloud IQ, LLC (“Cloud IQ”), MOJO
Transport, LLC (“MOJO”), and Jason Neilitz (“Neilitz”); Synergy
LLC (“Synergy”); Ivelisse Estrada Rivero (“Rivero”); ECO IQ, LLC
(“ECO IQ”); and Migo IQ, Inc. (“Migo IQ”), Radar_Apps, Inc.
(“Radar_Apps”), Jonathon Kotthoff (“Kotthoff”), and Carol Leese
(“Leese”) -- filed six motions to dismiss, respectively, and
accompanying memoranda.

Mot. Dismiss Third Am. Compl. 12(b)(6)

(“J&W Mot.”), ECF No. 113; Mot. Dismiss Third Am. Compl. Failing
State Claim (“Cloud Mot.”), ECF No. 114; Def. Synergy Mot.
Dismiss Second Am. Collective Action Compl. (“Synergy Mot.”),
ECF No. 115; Def. Rivero’s Mot. Dismiss Second Am. Compl.
(“Rivero Mot.”), ECF No. 118; Def. ECO Mot. Dismiss Am. Compl.
(“ECO Mot.”), ECF No. 127; 2 Mot. Dismiss Third Am. Compl.
12(b)(6) (“Migo Mot.”), ECF No. 135.

2

ECO IQ moved to dismiss only after answering the
Plaintiffs’ complaint. Answer Second Am. Compl., ECF No. 116.
Because Federal Rule of Civil Procedure 12(b) requires such a
motion be made “before pleading if a responsive pleading is
[2]

J&W Grading initiated bankruptcy proceedings on December
11, 2018, while the Defendants’ motions to dismiss were pending.
Voluntary Pet. Non-Individuals Filing Bankruptcy, ECF No. 149-2;
Electronic Clerk’s Notes, ECF No. 159.

As a result, all claims

against J&W Grading have been automatically stayed.
U.S.C. § 362(a)(1).

Id.; see 11

None of the Court’s rulings here, including

the disposition of motions brought by Guthrie, will affect the
rights of J&W Grading.
While the stay that issues when a party files for
bankruptcy under section 362 is broad, “it does not protect
separate legal entities, such as corporate directors, officers
or affiliates, partners in debtor partnerships or codefendants
in pending litigation.”

3 Collier on Bankruptcy ¶ 362.03

(Richard Levin & Henry J. Sommer, eds. 16th ed. 2018) (citing,
among others, Patton v. Bearden, 8 F.3d 343 (6th Cir.
1993); Williford v. Armstrong World Indus., Inc., 715 F.2d 124
(4th Cir. 1983); Wedgeworth v. Fibreboard Corp., 706 F.2d 541
(5th Cir. 1983)).

The stay of proceedings against J&W Grading

allowed,” this Court considers ECO IQ’s motion to dismiss as a
motion for judgment on the pleadings pursuant to Federal Rule of
Civil Procedure 12(c). At the December 20, 2018 hearing, the
Court erroneously stated that it would consider the Answer as a
motion for judgment on the pleadings.
[3]

thus does not extend to Guthrie, its alleged owner, Compl. ¶ 34,
or any of the other Defendants. 3
The Court held a hearing on December 20, 2018, where
counsel for all of the Defendants except J&W Grading and Guthrie
were present.

Electronic Clerk’s Notes, ECF No. 159.

After carefully reviewing all of the pleadings, this Court
DENIES in part and GRANTS in part the motions to dismiss brought
by Defendants J&W and Guthrie, ECF No. 113; Cloud IQ, MOJO, and
Neilitz, ECF No. 114; Synergy, ECF No. 115; Rivero, ECF No. 118;
ECO IQ, ECF No. 127; and Migo IQ, Radar_Apps, Kotthoff, and
Leese, ECF No. 135.
First, the Court holds that the Plaintiffs have alleged
sufficient facts to make out a plausible claim that Defendants
Guthrie, ECO IQ, Cloud IQ, Synergy, Radar_Apps, MOJO, Kotthoff,
Leese, Neilitz, and Rivero are employers under the FLSA.

The

Plaintiffs have plausibly alleged that at least some of the
named entities were -– along with J&W Grading and Guthrie -–
their joint employers.

See Falk v. Brennan, 414 U.S. 190, 195

(1973); see also Donovan v. Agnew, 712 F.2d 1509, 1511 (1st Cir.
1983) (“The overwhelming weight of authority is that a corporate
officer with operational control of a corporations covered

3

Accordingly, all subsequent references to “Defendants” in
this Order refer to all Defendants but J&W Grading unless
otherwise indicated.
[4]

enterprise is an employer along with the corporation, jointly
and severally liable under the FLSA for unpaid wages.”). 4
Further, the Complaint provides enough factual allegations
indicating that ECO IQ, Cloud IQ, Synergy, Radar_Apps, MOJO,
Kotthoff, Leese, Neilitz, and Rivero (“Technology Defendants”)
are liable under the FLSA pursuant to a single enterprise theory
to survive at this stage.

See Brennan v. Arnheim & Neely, Inc.,

410 U.S. 512, 520 (U.S.) (affirming the district court’s
distillation of the elements of the FLSA’s definition of an
“enterprise” as related activities, unified operation or common
control, and common business purpose); see also Engelhardt v.
S.P. Richards Co., 472 F.3d 1, 4 (1st Cir. 2006) (applying
“integrated enterprise” test to employers under the Family and
Medical Leave Act).
For this reason, the Defendants’ motions to dismiss Count I
and Count III, alleging violations of FLSA’s minimum wage and
retaliation provisions, are denied.
Count II, alleging violations of FLSA’s overtime
provisions, is dismissed as to Cloud IQ, MOJO, Neilitz, Synergy,
Guthrie, and Rivero on their Rule 12(b)(6) motions.

4

In reaching this conclusion, I note that the affidavits
submitted with the Plaintiffs’ Motions for Sanctions, see ECF
Nos. 132 and 137, amplify the Plaintiffs’ contention that at
least some of the Technology Defendants jointly employed them.
[5]

Count IV is dismissed as to all Defendants because, as ECO
IQ argued, ECO IQ Mot. 19, sections 173-78 of chapter 29 of the
Puerto Rico Laws impose requirements on employers but do not
authorize a private right of action.
Migo’s motion to dismiss Count IX, alleging breach of the
rental agreement, is granted, and Count IX is dismissed as to
all other Defendants as the Plaintiffs failed to allege that
they were parties to the Rental Agreement.
The Defendants’ motions to dismiss Counts V and VII,
alleging Puerto Rico minimum wage and retaliation claims, are
denied alongside those seeking dismissal of their federal
corollaries.

Count VI, alleging violations of Puerto Rico’s

overtime provisions, is dismissed as to Cloud IQ, MOJO, and
Synergy on their motions.
Guthrie’s motion to dismiss Count VIII, alleging breach of
the per diem agreement, Count X, alleging unjust enrichment,
Count XI, alleging fraudulent inducement, and Count XII,
alleging conversion, is denied.
ECO IQ’s motion to dismiss is denied as to Counts VIII and
X, but granted as to Count XI, alleging fraudulent inducement,
and Count XII, alleging conversion.
All other claims remain alive and discovery may commence
immediately.

An opinion explaining these rulings shall follow.

[6]

SO ORDERED.

/s/ William G. Young
WILLIAM G. YOUNG
DISTRICT JUDGE

[7]