Wieck v. Synrg.Royce LLC et al

Filing 52

REPORT AND RECOMMENDATIONS re 51 Motion for Default Judgment, filed by Michael Wieck. Signed by Judge Andrew W. Austin. (lt)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION
MICHAEL D. WIECK

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v.
SYNRG. ROYCE LLC d/b/a
GOGREENTX, LLC, et al.

A-17-CV-599 LY

REPORT AND RECOMMENDATION
OF THE UNITED STATES MAGISTRATE JUDGE
TO:

THE HONORABLE LEE YEAKEL
UNITED STATES DISTRICT JUDGE
Before the Court is Plaintiff’s Renewed Motion for Default Judgment against Synrg.Royce

LLC d/b/a GoGreenTX, LLC and Dennis Royce, Jr., filed on November 27, 2018 (Dkt. No. 51). The
Court submits this Report and Recommendation pursuant to U.S.C. § 636(b)(1)(B), Federal Rules
of Civil Procedure 72, and Rule 1(d) of Appendix C of the Local Court Rules.
I. BACKGROUND
A.

Factual Background
On June 28, 2017, Michael Wieck (“Wieck”) filed this lawsuit under the Fair Labor

Standards Act against his former employer, Synrg.Royce LLC d/b/a GoGreenTX, LLC (“GoGreen”),
and alleged part-owners of the company, Dennis Royce Jr., Nathan McKinney, and Eric Bauman.
Wieck worked as a production manager at GoGreen from December 2015 through March 2017. He
alleges that throughout his employment with GoGreen, he regularly worked in excess of 40 hours
per week and that Defendants failed to pay him overtime. Wieck also alleges that between late
October 2016 and February 2017, he worked approximately nine weeks for GoGreen without any
pay whatsoever, and that he has not been reimbursed for approximately $12,030.97 in expenses he

was forced to charge on his personal credit card, which he seeks to recover from GoGreen under
state law. In total, Wieck seeks $17,382.45 in unpaid wages and liquidated damages under the
FLSA, $12,030.97 in un-reimbursed work expenses under Texas law, and $38,384.41 in attorney’s
fees.
B.

Procedural Background
After Defendants GoGreen and Dennis Royce Jr. failed to respond to the Complaint, the

Clerk entered default against GoGreen and Royce on July 27, 2017. See Dkt. No. 12. On September
29, 2017, Wieck filed his first Motion for Default Judgment against GoGreen and Royce. See Dkt.
No. 22. On January 30, 2018, the undersigned issued a Report & Recommendation finding that
while Wieck “is entitled to a default judgment,” it recommended that the District Court deny the
Motion without prejudice since “it would be improper to enter judgment against GoGreen and Royce
at this time because there are other defendants that have filed answers, and Wieck is requesting that
the defendants be held jointly and severally liable.” Dkt. No. 28 at 2-3. On August 17, 2018, the
District Court adopted the Report and Recommendation. Dkt. No. 42.
Since the entry of these Orders, all claims have been resolved against the remaining
defendants in this case. Specifically, on August 17, 2018, the District Court granted this Court’s
Report and Recommendation and dismissed Eric Bauman from this lawsuit. Dkt. No. 43. On
October 9, 2018, Wieck dismissed all claims against Nathan McKinney. Dkt. No. 50. Accordingly,
the only remaining defendants in this case are GoGreen and Royce (“Defendants”) who have failed
to answer this lawsuit. Wieck has now filed a Renewed Motion for Default Judgment against the
Defendants.

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II. LEGAL STANDARD
Rule 55 of the Federal Rules of Civil Procedure authorizes the Court to enter a default
judgment against a defendant who has failed to plead or otherwise defend upon motion of the
plaintiff. Fed. R. Civ. P. 55(b). That being said, “[d]efault judgments are a drastic remedy, not
favored by the Federal Rules and resorted to by courts only in extreme situations.” Sun Bank of
Ocala v. Pelican Homestead & Sav. Ass'n, 874 F.2d 274, 276 (5th Cir. 1989). A default judgment,
thus, “must be ‘supported by well-pleaded allegations’ and must have ‘a sufficient basis in the
pleadings.’” Wooten v. McDonald Transit Assoc., Inc., 788 F.3d 490, 498 (5th Cir. 2015) (quoting
Nishimatsu Constr. Co. v. Hou. Nat’l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975) ). The well-pleaded
allegations in the complaint are assumed to be true, except regarding damages. Nishimatsu, 515 F.2d
at 1206; see also United States v. Shipco Gen., Inc., 814 F.2d 1011, 1014 (5th Cir. 1987). The entry
of a default judgment is reviewed for abuse of discretion. Id. at 1013.
III. ANALYSIS
Courts have developed a three-part test to determine whether a default judgment should be
entered. First, the court considers whether the entry of default judgment is procedurally warranted.
Nasufi v. King Cable Inc., 2017 WL 6497762, * 1 (N. D. Tex. 2017) (citing Lindsey v. Prive Corp.,
161 F.3d 886, 893 (5th Cir. 1998)). Second, the court assesses the substantive merits of the
plaintiff’s claims to determine whether there is a sufficient basis in the pleadings for the judgment.
Id. at * 2. Last, the court determines what relief, if any, the plaintiff should receive. Id.
A.

Is the Default Procedurally Warranted?
First, the Court considers whether the entry of default judgment is procedurally warranted.

Lindsey, 161 F.3d at 893. The factors relevant to this inquiry include: (1) whether material issues
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of fact are at issue; (2) whether there has been substantial prejudice; (3) whether the grounds for
default are clearly established; (4) whether the default was caused by a good faith mistake or
excusable neglect; (5) the harshness of a default judgment; and (6) whether the court would think
itself obliged to set aside the default on the defendant's motion. Id. The Court finds that all of these
factors have been met in this case.
Because Defendants have not filed an answer or any responsive pleadings in this case, there
are no material facts in dispute. See Nishimatsu Constr., 515 F.2d at 1206 (noting that “[t]he
defendant, by his default, admits the plaintiff's well-pleaded allegations of fact.”). Second,
Defendants’ “failure to respond threatens to bring the adversary process to a halt, effectively
prejudicing Plaintiff's interests.” Ins. Co. of the W. v. H & G Contractors, Inc., 2011 WL 4738197,
at *3 (S.D. Tex, Oct. 5, 2011). Third, the grounds for default are “clearly established,” as
Defendants have not responded to any of the proceedings in this case. See J.D. Holdings, LLC v. BD
Ventures, LLC, 766 F. Supp. 2d 109, 113 (D.D.C. 2011) (citations and quotations omitted). Fourth,
there is no evidence to indicate that Defendants’ silence is the result of a “good faith mistake or
excusable neglect.” Lindsey, 161 F.3d at 893. Fifth, Wieck seeks only the relief to which he is
entitled under the law, mitigating the harshness of a default judgment against Defendants. Finally,
the Court is not aware of any facts that would give rise to “good cause” to set aside the default if
challenged by Defendants. See id. Therefore, the Court concludes that default judgment is
procedurally warranted.
B.

Is there a Sufficient Basis for the Judgment?
Second, the Court must assess the substantive merits of Wieck’s claims and determine

whether there is a sufficient basis in the pleadings for the judgment. Nishimatsu, 515 F.2d at 1206.
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In doing so, courts are to assume that by its default, the defendant admits all well-pleaded facts in
the plaintiff's complaint. Id. However, a “defendant is not held to admit facts that are not-well
pleaded or to admit conclusions of law.” Section 207(a) of the FLSA provides that “no employer
shall employ any of his employees who in any workweek is engaged in commerce or in the
production of goods 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. The FLSA
defines an “employer” broadly to include “any person acting directly or indirectly in the interest of
an employer in relation to an employee.” Id. § 203(d). Under the Fifth Circuit’s economic reality
test, an “employer” includes a corporate officer if that officer exercises “managerial responsibilities
and substantial control of the terms and conditions of the employer’s work.” Donovan v. Grim Hotel
Co., 747 F.2d 966, 971-972 (5th Cir. 1984), cert. denied, 471 U.S. 1124 (1985); see also Williams
v. Henagan, 595 F.3d 610, 620 (5th Cir. 2010). Here, the complaint’s factual allegations—and the
evidence submitted in support of this motion—establish that Defendants are liable to Plaintiff for
unpaid overtime wages under the FLSA. In addition, the evidence demonstrates that Wieck incurred
$12,030.97 in damages after GoGreen breached its oral contract with Wieck to reimburse him for
the expenses charged to his personal credit card.
C.

Damages
Lastly, the Court must determine what form of relief, if any, Wieck is entitled to receive in

this case. Courts have found that if the amount of damages can be determined with mathematical
calculation by reference to the pleadings and supporting documents, a hearing is unnecessary to
determine damages. James v. Frame, 6 F.3d 307, 310 (5th Cir. 1993). Wieck has submitted
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sufficient documentation to support his request for damages in this case. Based on this undisputed
evidence, the Court finds that Defendants are jointly and severally liable to Wieck for the total sum
of $55,766.85. This total is comprised of the following amounts:
$8,691.22
$8,691.22
$38,384.41

unpaid overtime under 29 U.S.C. § 207(a),
liquidated damages under 29 U.S.C. § 216(b)
attorneys’ fees

In addition to this amount, the Court also finds that GoGreen (but not the other defendants) is liable
to Wieck for the additional sum of $12,030.97, as damages incurred by Wieck for the company’s
failure to reimburse him for business expenses charged on his credit card.
IV. RECOMMENDATION
In light of the foregoing, the undersigned RECOMMENDS that the District Court GRANT
Plaintiff’s Renewed Motion for Default Judgment against Synrg.Royce LLC d/b/a GoGreenTX, LLC
and Dennis Royce, Jr. (Dkt. No. 51), and ENTER JUDGMENT in favor of Wieck and against
Defendants Synrg.Royce LLC d/b/a GoGreenTX, LLC. and Dennis Royce, Jr., jointly and severally,
in the amount of for $55,766.85, and in favor of Wieck and against only Defendant Synrg.Royce
LLC d/b/a GoGreenTX, LLC. in the amount of $12,030.97.
Finally, the Clerk should remove this case from the undersigned’s docket and return it to the
docket of the District Judge.
V. WARNINGS
The parties may file objections to this Report and Recommendation. A party filing objections
must specifically identify those findings or recommendations to which objections are being made.
The District Court need not consider frivolous, conclusive, or general objections. See Battle v.
United States Parole Comm’n, 834 F.2d 419, 421 (5th Cir. 1987). A party’s failure to file written
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objections to the proposed findings and recommendations contained in this Report within fourteen
(14) days after the party is served with a copy of the Report shall bar that party from de novo review
by the District Court of the proposed findings and recommendations in the Report and, except upon
grounds of plain error, shall bar the party from appellate review of unobjected-to proposed factual
findings and legal conclusions accepted by the District Court. See 28 U.S.C. § 636(b)(1)(c); Thomas
v. Arn, 474 U.S. 140, 150-53 (1985); Douglass v. United Servs. Auto. Ass’n, 79 F.3d 1415, 1428-29
(5th Cir. 1996) (en banc).
SIGNED this 20th day of February, 2019.

_____________________________________
ANDREW W. AUSTIN
UNITED STATES MAGISTRATE JUDGE

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